Town Meeting may get an opportunity to scale back a controversial affordable housing project by spending $300,000 to purchase 12 of the developer's 34 acres to preserve as open space.

The Community Preservation Committee on Tuesday heard the Sippican Lands Trust’s request to use Community Preservation Act funds to purchase the land. In return for the conservation group’s purchase of the 12 acres, developer Baywatch Realty Trust has agreed to reduce the size of its proposed housing project on land abutting Route 105, just north of Route 6.

Under the agreement, the 168-unit development would be reduced to a four-building, 96-unit project. The acreage purchased by the lands trust would be left as open space, protecting wetlands and allowing a bike path easement. The new plans would also eliminate the need to widen Route 105 to accommodate increased traffic.

“I’ve been worrying about this piece of land for 10 years,” said Chris Bryant, president of the Sippican Lands Trust. “We think this is right for the town. I think we’re sitting on a good answer.”

The Lands Trust entered a contract with Baywatch last week to purchase five acres of upland and seven acres of wetlands in the woods behind the Wave Restaurant, according to Bryant.

The agreement with the Lands Trust comes after 10 years of negotiation and litigation over Baywatch’s housing development. Using the state law designed to encourage construction of “affordable housing,” commonly referred to as “Chapter 40B,” Baywatch can avoid the need to comply with a variety of local zoning regulations – most relevantly, restrictions on the density of development.

The effect that the 168 new housing units would have on the town’s character and the demand they would put on town services have drawn substantial opposition to Baywatch’s plans.

“This is a settlement with the developer and concerned citizens and abutters,” said David Croll, an attorney who has been working with the Lands Trust and residents.But it is not a done deal until the Lands Trust purchases the acreage and the smaller project gets permits to allow construction.

To obtain the public funds for the purchase, the Community Preservation Committee must agree to ask Town Meeting for the money, and Town Meeting must approve the expenditure.

If the Lands Trust does not get the $300,000 needed to buy the land, the contract with the developer is nullified, and work on the project will continue at the 168-unit level.

If funding is approved, even the scaled-down project still has to be reviewed by the Zoning Board of Appeals and Conservation Commission. Croll noted that any snag during that process would also nullify the land-purchase contract.

The state’s Community Preservation Act allows towns to adopt a real estate tax surcharge of up to three percent to fund open space, historic preservation, community housing and public recreation. The state matches no less than five percent and no more than 100 percent of the funds raised from the surcharge. Marion’s surcharge is set at two percent.

The Community Preservation Committee recommends to Town Meeting how the funds should be used.

Bryant said the Sippican Lands Trust did not have a fallback plan if the Community Preservation funds are not approved.  Croll said his group had approached the Open Space Acquisition Commission for help but was turned down.

Zoning Board of Appeals Chairman Bob Wedge said he was delighted with the apparent compromise.

“Density was always a problem,” he said. “You’re looking at 500 people added to the population. One of the concerns was infrastructure and services like police and fire, and the schools. Hopefully the mechanics of the money can be worked out because I think this is a great opportunity. I think it would be welcomed throughout the town.”

On Monday night, the Planning Board was briefed on the agreement. The board agreed to send a letter to the Community Preservation Committee expressing support for the Lands Trust purchase.

The easement for the bike path would also allow the town to receive $1.5 million in federal funding to complete a trail from Marion to Mattapoisett, according to Recreation Department Director Jody Dickerson.

After hearing from the Lands Trust and three other applicants for CPA money on Tuesday night, Schaefer said a meeting will be held next week to recommend which projects will be recommended for funding and at what level.