City and school district officials are negotiating a space agreement that could move the district’s offices into the Middletown City Building at One Donham Plaza by next school year.

While discussions remain preliminary, Mayor Larry Mulligan said it’s a strong possibility a deal will be reached.

“There may be some road blocks that may be insurmountable,” he said. “But right now, I can’t think of anything that can be overcome for us doing it.”

A decision to move forward on the partnership could be made by Christmas, and if the project is a go school and city officials say a move could happen this summer.

Middletown schools Superintendent Greg Rasmussen said sharing the city building could provide “significant financial and operational advantages to both parties.”

The district has had offices at 1515 Girard Ave. for more than 50 years. Though the building is owned by the district, there are regular maintenance and utility costs. Parking is also a challenge, Rasmussen said.

About 40 school district employees would be impacted by a move, but Rasmussen said some employees would have offices relocated to other buildings in the district.

“We hope that it would provide us with a more productive working environment for our employees and a more effective place for our patrons to come when they come to visit the school district,” Rasmussen said.

The negotiations demonstrate the commitment the district and the city have to each other, Mulligan said.

“As the city goes, so does the schools, and as the schools go, so does the city,” he said.

Locating district offices to the city building would create a “one-stop shop” for many people who do business with both governmental entities, Rasmussen said.

“We think the location is a positive for the location as downtown Middletown begins to evolve,” he said.

City Manager Judy Gilleland called the scenario a “win-win” for the city and the school district.

Any move would require the approval of both the school board and city council, but Middletown school board president Marcia Andrew admits the board thinks “the concept of shared space has a lot of merit.”

Until a formal proposal is presented to both the governmental bodies, administrators will review space allocation, financial costs and savings, and other related details, Gilleland said.

An initial scenario shows the district occupying the fourth floor of the city building, she said.

It’s unknown at this time how many taxpayer dollars could be saved by the district, how much the city could financially benefit, and if the Middletown City Building would undergo a name change.