A $3 million deal to sell Centreville's antique carousel to Carmel, Indiana has been rejected by its city council.

"The Carmel City Council voted last night to remove the carousel from the list of projects funded by bonds," Sue Finkam, Carmel City Council President, said Tuesday.

Funding for those projects would have been backed by local income tax, something more than 1,500 petitioners opposed.

Sue Finkam, Carmel City Council President said they are encouraging Carmel's mayor to seek private funds to bring the antique carousel to the city. (Twitter)

Carmel council voted 5-2 against the carousel, which would have cost $5 million US from $101 million in bonds, according to Christine Pauley, Carmel's clerk treasurer. The money was also earmarked for the construction of a luxury hotel.

The vote effectively makes void a purchase and sale agreement that was signed by Centreville and Carmel earlier this summer — it was contingent on approval of funding by Carmel council.

That said, Finkam explained that the city remains "open to future proposals to bring the antique carousel to Carmel, and we encourage the Mayor to seek private funds."

The Centreville carousel, a 1907 Dentzel carousel has been a popular attraction on the Toronto island since 1966. (Centre Island )

Carmel resident Ed Shaughnessy said he would support private funds being used to buy the carousel. Last week, he told CBC Toronto that he has "no objection to bringing the carousel, but it's just a matter of using public funds."

Toronto councillor starts petition to save carousel

With the future of the carousel up in the air since mid-August, one Toronto city councillor has started her own petition to try to save the attraction.

Coun. Paula Fletcher (Ward 30, Toronto-Danforth) will put a motion before council in the first week of October when meetings resume for the first time since July.

Centreville's 1907 carousel is the only one of its kind in Canada, she said.

"Not everything is plastic, not everything is digital and it is such a unique experience and to have it in Toronto and to have it on the island, I'd hate to see that lost," she said.

Councillor Paula Fletcher is leading an effort to keep Centreville's vintage carousel from being sold. (CBC)

According to Shawnda Walker, Centreville's director of marketing, the amusement park needs the money to lessen the impact of flooding earlier this year.

Flooding caused $6 million worth of damage to the park and Centreville lost $8 million in revenue this summer.

"That's a huge amount of money to recoup for a small, privately-owned business that is seasonal," Walker said last week,.

She added that the park has had "nibbles" from other potential buyers that it could pursue if the deal does fall through.