HAMPTON — Town Manager Fred Welch said the defeat of Article 39 at the March 10 election may force the town to do something it doesn't want to do — reclaim town-owned land currently being used by the Galley Hatch.

"What does that mean for the Galley Hatch property?" Welch told selectmen during Monday night's meeting. "Let me blunt. There is parking in front of the bank, a row of parking at the Galley Hatch and a sliver of the Galley Hatch building that is on the town highway. That has all got to go.

"I'm not particularly looking to do that, but at this point the town voted no, and, legally, they can't be on public property," the town manager said. "That is the bottom line."

Voters rejected the article that would have solved the problem by deeding town-owned land to Galley Hatch owner John Tinios in exchange for reconfiguration of the intersection of Route 1 and Winnacunnet Road.

Tinios offered to square off the intersection eliminating the spur road in order to improve what some residents have called one of the "most dangerous intersections in town".

In return, Tinios would have gained ownership of town land that his property currently encroaches on, as well as additional land for six more parking spots.

Reached on Wednesday, Welch backed down from the comments he made Monday night that all encroachments on town land would need to be removed.

"It's something we have to work through with the owner of the property," Welch said. "Right now, we don't have any authority to allow them to use town land."

While the encroachments have been there for years, officials said previous boards have done nothing about it.

Selectmen Chairman Rick Griffin said the board and Galley Hatch owners will have to come up with an equitable solution now that the issue is out there.

Griffin said he believes voters turned the article down because they didn't want to see a T-shaped intersection or a traffic light installed there.

"I don't think they voted against it because they wanted to hurt the Galley Hatch," Griffin said. "We need to find a solution, not cause a problem."

Selectman Bill Lally said he's hopeful something can be worked out to allow the Galley Hatch to continue using the land.

"What business in there right mind would want to come to a town that treats businesses like that?" Lally said. "We are not talking about a huge amount of land here, we are talking about miniscule parcels that would do the town no good if we took it over."

Lally said the town is the one who dropped the ball when it approved the construction of the Citizen's Bank, Galley Hatch and Hampton Cinema Six.

"People are not (purposely) building on town land," said Lally. "That should have been caught years and years ago. That was our mistake.

"Because the town made a mistake are we going to go in there now and take it back?" the selectman said. "The answer to me is no."

Welch said the town intends to work with Galley Hatch to resolve the issue.

"It's a problem we have to solve," Welch said. "Hopefully, we can solve it and everyone can walk away with good feelings at the other end."