Middleburg's Town Council gave residents an opportunity to respond to a potential agreement with the proposed Salamander Resort and Spa on the edge of town, and their reaction was mixed.

On Friday, about 50 people crowded into Middleburg's small town office for the special session.

"Don't look at me as a developer; look at me as a citizen of this community," Sheila Johnson, 56, co-founder of Black Entertainment Television, told the council. "I'm here to help. I'm here to give back to this community."

Johnson's company, Salamander Hospitality, seeks to build a 120-room hotel on a 340-acre site once owned by Pamela Harriman, the late socialite and U.S. ambassador to France. Last fall, Salamander received county approval for a 58-room hotel. Now the company wants the town to incorporate at least part of the site's 252 acres that lie outside Middleburg.

According to the agreement, Salamander would design and build a $4 million wastewater treatment plant to turn over to the town, along with booster stations and water and sewer lines for the resort. The town, in turn, would adjust its boundaries to incorporate at least 50 acres of Salamander within its limits. Salamander says it would prefer to bring the entire property into Middleburg. If Middleburg agreed to incorporate the property, Loudoun County also would have to agree to cede the land.

Town Administrator Mike Casey said the town's treatment plant is more than 20 years old and needs to be replaced anyway, at an estimated cost of about $3.6 million.

A number of speakers in favor of the proposal complained about the high price of water and sewer service in town and urged the council to consider the proposal as a way to bring down those costs.

Supporters of Salamander also argued that the resort would bring patrons to the historic town's shops and restaurants. Although some residents have welcomed the proposal and its potential to revitalize downtown Middleburg, others have expressed concerns about traffic and the environmental effects of a large hotel.

In addition, others have raised questions about Johnson's plans for the 88 acres she owns within the town limits. Under current zoning, she could build as many as 49 homes there.

At the meeting, council member Catherine Murdock was skeptical about the agreement. "I'm very concerned about the open space and how we can preserve what we have," she said. "It's not a slam dunk in my book by any means."

Prem Devadas, president of Salamander Hospitality, described the agreement as a "win-win situation" for the resort and the town. He said after the meeting that if Middleburg did not accept the agreement, the company would pursue county approval for building the 120-room resort outside the town, using its four wells for water and creating drain fields for sewer.

"It's really a question of whether the town wants to benefit from the resort being there," said Devadas, who estimated that the resort would bring Middleburg more than $500,000 in annual tax revenue and $300,000 annually in water and sewer fees. "If they don't, they don't. We'll build the resort."

According to the proposed agreement, Salamander would turn over at least two of its wells to the town.

Caroline Memery, the owner of A Little Something in Middleburg, said the town's water problems -- including frequent lack of pressure and discoloration -- had forced her to buy drinking water for the employees of her interior design gift shop. "Dr. Johnson is going to make a beautiful inn, in keeping with the beauty of the countryside," Memery said.

Devadas said the resort would occupy less than 20 acres. A wedding pavilion included in a previous plan would be replaced by a conference center attached to the main building. The latest design would also reduce the number of cottage-style lodgings from 15 to eight. The plan includes one restaurant instead of two, a horse barn with as many as 20 stalls, tennis courts, a greenhouse and an herb garden. Revisions also call for the spa -- with treatment rooms, a fitness center and areas for yoga and tai chi -- to be attached to the main building.

Valerie Kelly, who owns Hunt Country Yarns in Middleburg and lives about two miles outside town, said the changes had only increased her longstanding reservations about the proposal. "What started out as a small country inn is now a huge conference center," she said, asking the council not to focus only on the water and sewer issue.

Council members are expected to meet in closed session to discuss the matter further.

"I do believe we're on the right track," said council member Eura H. Lewis. "Everything's not peaches and cream, but we wouldn't do anything to destroy this unique town."

Mayor C.L. "Tim" Dimos said this week that the council could vote on the issue at a meeting July 14.