Weatherly Borough Council on Monday took another step toward revitalization of the Schwab School.

Council designated the area of the former school as a blighted area to allow for tax abatement under the Local Economic Revitalization Tax Assistance Act Program.

The massive brick structure stands tall on Spring Street, a gift to the borough from steel magnate Charles M. Schwab in 1901, whose wife, Eurana, hailed from Weatherly.

The school closed in the early 1990s and is owned by the borough.

The borough is working with the Alliance for Building Communities Inc. of Allentown on a proposal to convert the former school into 30 apartments. The proposed $12 million project is dependent on securing funding.

The nonprofit organization, which has been in existence since 1975 serving six counties in northeastern Pennsylvania, applied to the state Housing Finance Authority for funding.

ABC has properties in Bethlehem, Slatington and Tamaqua, including the Tamaqua Hi-Rise, Liberty Place and the Hazle Street Apartments, and works under federal Department of Housing and Urban Development guidelines.

Part of the approval process is securing a 10-year tax abatement under LERTA from the taxing authorities, which include the borough, the Weatherly Area School District and Carbon County.

Council members questioned whether a property owner could take advantage of the tax abatement and not improve the property, potentially costing the borough money in lost tax revenue.

Solicitor James Nanovic said there is a chance that an area be declared blighted under the LERTA program and a property owner does nothing.

“However, you don’t lose anything,” he said. “The idea of this is any improvements they make are going to be exempt from taxes for a period of 10 years.

“They don’t’ make improvements,” Nanovic said. “There’s no exemption.”

Nanovic said council could designate any areas in the borough as blighted, the entire borough or very specific areas under LERTA. They could also come back at another time and include other areas.

No residents spoke up about the designation during the public hearing, and council chose to limit the blighted area designation to the area of the school.

Council did not yet advertise the LERTA ordinance. Nanovic suggested sending the draft ordinance to the organization looking to buy the school, in case changes are needed.

Council can move to advertise in July, he said, saying there was no hurry. ABC will also need the tax abatement from school district and the county.

“If they don’t’ get it from the school, I’m sure the project dies,” Nanovic said.

Carbon County Commissioner Michael Sofranko attended the meeting to learn more about the project and LERTA designation. The county would also have to approve the tax abatement.

In February, the borough applied for a $250,000 state grant to demolish the Schwab School Annex, which is adjacent to the old school and could provide parking for the housing project.