The $11.3 million project to redevelop the former C.M. Schwab School in Weatherly into apartments is on hold as the developer seeks new funding.

The project called for creating 12 two-bedroom apartments in the former school, tearing down the deteriorating gymnasium building and constructing a new addition with 18 one-bedroom apartments with a connected elevator.

The Lehigh Valley-based nonprofit, the Alliance for Building Communities, lined up more than $9 million in private investments and donations and secured more than $2 million in county and state funding and tax credits.

However, the project was dependent on a 10-year tax break through the Local Economic Revitalization Tax Assistance program, or LERTA, to show a positive cash flow, its executive director had said.

Weatherly Borough designated the area of the Schwab School, which has sat dormant for decades, as blighted under the LERTA program.

The borough also planned to donate the building, valued at $105,000, to ABC in addition to the LERTA incentive to move the project forward.

The project also had the support of state lawmakers who worked with ABC on other revitalizations projects in the region.

“For far too many years, the structure has sat vacant and deteriorating, despite the best efforts of many local individuals,” Sen. David Argall and Rep. Doyle Heffley wrote in a letter to the Weatherly Area School Board.

“The current effort represents years of work and is our highest local community revitalization priority,” the letter urging support of the LERTA tax abatement said. “Without your positive action, we fear the building will meeting its final demise.”

The Weatherly Area School Board listened to the proposal and took public comment in April, before rejecting the tax incentive at its next meeting in May.

Now, the project, which was set to get underway this year, sits dormant.

“The project is on hold while we try to get additional funding,” Melissa Keiser, vice president for ABC in Allentown, said in an email last week.

She did not have a new timetable for when the project could get back on track.

The Schwab School has sat idle since the 1990s, and the borough has estimated the cost to demolish the massive structure that dominates the skyline at $2 million.