Weatherly Borough Council on Monday applied for a $500,000 gaming grant to tear down the C.M. Schwab School annex building.

Borough Manager Harold Pudliner said that the Alliance for Building Communities is still involved in the project to transform the historic school into apartments.

“Because bidding came in extremely high on the project, (ABC) had to move it to next year,” he said. “They have to go through a lot of hoops with the Pennsylvania Housing Finance Agency to move the project another year forward.”

But the borough wants to ensure that it has enough money to tear down the annex building, which is now estimated to cost $750,000 due to the asbestos, he said.

The borough already secured a $250,000 grant to raze the annex building, which Pudliner said, “is getting pretty rough.”

The Lehigh Valley nonprofit along with local and state leaders announced the $11.3 million housing project for the Schwab School last summer.

ABC secured a mixture of private investments and donations along with $2 million in county and state funding and tax credits for the project.

The nonprofit also hoped to secure a 10-year tax break through the Local Economic Revitalization Tax Assistance program, or LERTA, to show a positive cash flow moving forward.

However, the Weatherly Area School District refused to grant the tax break. The borough had already approved LERTA, and designated the area of the school as blighted under the program.

The borough also plans to donate the school building, valued at $105,000, to ABC to revitalize the property. The building sits high up on Spring Street, dominating the borough’s skyline.

The project calls for converting the main school building into 12 two-bedroom apartments, and razing the annex to make way for a 16,000-square-foot addition with 18 one-bedroom apartments, according to ABC’s plans.

Earlier this month, Melissa Keiser, vice president for ABC in Allentown, said the project is on hold while they seek additional funding.

On Monday, Pudliner said that ABC is working to extend the tax credits on the project and find more funding.