LAKE DALLAS — City leaders may use special taxing districts and tax abatements to bring a commuter rail stop and related mixed-use development to Lake Dallas.

City Attorney David Berman briefed the City Council on Thursday night on public funding tools that can be used to redevelop blighted areas. City leaders said they have identified not only about 60 acres along Interstate 35E that could be redeveloped, but also a reputable developer interested in the project.

“Our main thing is to get a [rail] stop here,” said council member B.W. Brooks.

Berman told the council he thought tax-increment finance district funds could be used to buy membership into the Denton County Transportation Authority.

In 2003, a countywide election established DCTA, funding it with a half-cent sales tax in the three cities that approved membership — Denton, Highland Village and Lewisville.

But most Denton County cities, including Lake Dallas, rejected membership and the sales tax requirement. When DCTA offered those cities a second chance at membership in 2006, only Shady Shores and Corinth talked seriously about buying in. Corinth was in line for a rail stop along the commuter line, and Shady Shores, bus service. But many in those two cities didn’t want to pay the sales tax, killing the talks in Shady Shores and a second-chance election in Corinth.

Currently, DCTA has no rail stops planned between Lewisville and Denton.

If Lake Dallas established a tax-increment finance district, new ad valorem taxes collected in the district could be used to pay for a number of public purposes, including DCTA membership, Berman said.

The next step was to find out the capital costs from DCTA’s new membership committee and whether Lake Dallas could still buy in, Brooks said.

“We expect that [information] after the first of the year,” Brooks said.

Berman told the council he believed it would take more than a tax-increment finance district to help the area redevelop. He recommended public improvement districts and tax abatement agreements, as well.

When a property owner — usually a developer — requests a public improvement district to assess fees on future property owners, the city could tie the developer to certain performance conditions with other agreements.

“You want to enable and facilitate the development as much as possible, but without putting you at risk,” Berman said.

He cautioned that many developers have “pie-in-the-sky” vision, but only a small percentage of them complete projects because few have the solvency — especially in the current economy — or the experience to pull it off.

Brooks said the council was buoyed by the fact that the developer, Paris Rutherford of Dallas-based Icon Partners, has experience with the kind of development the city is seeking around the potential rail stop.

Redevelopment could be boosted when the widening of Interstate 35E begins, particularly when commercial properties were being demolished on the west side, Brooks said. But he and several council members acknowledged the state’s changing timeline on that project made it difficult to plan.

Once the city has more financial information from DCTA, it can make the pitch to the Lake Dallas school district and Denton County for participation in the district.

Berman said the city would have to offer the same kind of analysis to those entities as it would do for itself.

“We’d ask, ‘What’s in it for us?’” Berman said. “And they need to know if it wouldn’t happen without them.”

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is pheinkel-wolfe@dentonrc.com .