Gainesville’s board of education likely will reconsider its participation in the city’s tax allocation district early next week, meaning stalled plans to redevelop blighted areas of Gainesville soon could get back on track.

The future of the tax allocation district, or TAD, has been in limbo since the school board backed out of an agreement to fund redevelopment projects in it four months ago.

The TAD, a 270-acre area comprising Gainesville’s downtown and Midtown, is an area city officials have targeted for redevelopment. To attract developers, city, county and city school officials agreed in 2006 to use a public funding tool called tax increment financing. The financing tool requires the local governments to forgo increases in property tax revenues in the district, and then use that money, the tax increment, to repay bonds they will issue to developers for improvements in the area.

At least two developers already have shown interest in pursuing TAD funding for Midtown projects, but haven’t yet applied.

In March, school board members, dealing with a deficit and cuts in state funding, were hesitant to forgo the tax revenue. As a result, they voted to back out of the original agreement they signed with the city in 2006. The decision resulted in a loss of nearly 65 percent of the potential funding for projects in the district, but left open the possibility of the school board’s future participation in the TAD.

In recent weeks, school board attorney Phil Hartley has been negotiating a revised TAD agreement with the city, according to Gainesville school Superintendent Merrianne Dyer.

The revisions give the school board more representation on the TAD’s nine-member advisory committee, which advises the City Council if and how much funding it should give to developers in the district, according to Gainesville’s Community Development Director Rusty Ligon. Another revision limits the amount of residential development allowed in the district and the development’s impact on schools, Ligon said.

"There were a couple of assurances in wording that ... Mr. Hartley advised us that we should address in the agreement that was proposed to us," Dyer said. "Upon receipt of that, then we will put it on the agenda."

The revisions mean there will be less representation of the private sector on the TAD advisory committee, but have made the idea of funding the district more palatable to school board members.

School board chairman David Syfan was the most vocal opponent of the previous agreement to fund redevelopment in the TAD, but now he says he is more comfortable with the idea.

"It’s not an easy issue, because of the fact that we’re in the budget situation that we’re in and you know, anytime that you’re having to cut salaries of staff it’s sort of difficult to give up revenue sources," Syfan said. "... The TAD, in the long run, in the big picture, makes a lot of sense, because basically what they’re trying to do is revitalize that Midtown area that’s been stagnant probably for the last 20 or so years. The TAD is just an attempt to kick-start development in that area."

And Syfan said he realizes that boosting development in the district means more money for the school board in the future.

"We may can short-term forgo a little bit of education money for a bigger return down the road that will only help us more down the road in meeting our budgets and keeping our millage rate as low as we can," Syfan said. "It’s one of those (issues) I kind of see both sides, but I’m getting more comfortable with the TAD."

Ken Bleakly, the city’s TAD consultant, said the school board’s participation could result in its receiving about $20 million more in property and sales tax revenues than it would receive if it did not participate.

"That’s why most school districts, counties and cities do these things," Bleakly said. "It’s a way to take something that might be growing at 3 percent or 4 percent a year and have it dramatically grow... and you’re going to get a lot more revenue."

Dyer expects the school board to discuss the TAD agreement at Monday’s regular work session.

If the school board re-enters the agreement with the city, an application for funding from a developer is sure to follow, Ligon said. Gainesville City Center, LLC, the developer of a high-rise hotel and office complex in Midtown, will likely submit an application for funding soon after the city and the school board reach an agreement, Ligon said. Another developer has also shown interest in using TAD financing, he said.

"They are going to wait until this TAD is in place and then officially submit this application," Ligon said. "...I think that it would be just a matter of a few weeks."