The question of what to do with the property, believed by officials to be the largest available for development in the borough, has roiled local politics since 2005, when Bancroft, which educates students suffering from developmental disabilities and brain injuries, announced that it was seeking buyers for the property.
At the time, the private school was in the midst of a financial crisis, following a costly lawsuit brought by the family of a boy living at Bancroft who died of a blood infection and an investigation by the New Jersey Office of the Child Advocate.
Two years ago, borough commissioners sparked controversy when they floated plans to turn the school into a senior housing and nursing facility. The proposal drew protests from residents who called for the land to be preserved as a park.
The deal announced Tuesday would make the land a public space, with the Haddonfield School District purchasing the property for $12.2 million - considerably less than the $20 million asking price in 2005. The borough, using state or county open-space funding, would then purchase an as-yet-undetermined piece of it to be turned into a park.
While details are still being worked out, Chris Maynes, a lifelong Haddonfield resident and leader in the movement to stop the commercial development of Bancroft, said Tuesday's announcement was encouraging.
"It's certainly better than the proposal they had two years ago we were all so worried about," he said. "It just came out of the blue."
Before the purchase can be completed, the school district will need to get the approval of voters for a bond issue of up to $16 million to pay for the purchase of the land, demolition of the school, and construction of new facilities.
Also, borough attorneys are in the process of determining whether their plans for the property would need to include low- and moderate-income housing, which Haddonfield is under state orders to increase.
Kevin Walsh, associate director of the Fair Share Housing Center, said Haddonfield would need to do so or face lawsuits arguing that it wasn't meeting its affordable-housing obligation.
"They should figure it out," he said. "This is a promise Haddonfield has made."
The borough is likely to become even more expensive after the Bancroft purchase.
Borden said the bond issue was expected to cause a property-tax increase, and he did not rule out the possibility that that could force out some of the town's less affluent residents.
"I certainly hope that's not the case. That would be a very sad state of affairs if this does that," he said.
Under the terms of the deal, Bancroft has up to four years to find a new location and move out.
School Board President Steven Weinstein said the district needs to determine its plans for the land, but they would likely include expanding parking at the high school.
"It's about trying to preserve options for us way into the future. Most of our school buildings are pretty much bursting at the seams," he said.
Officials and some residents were optimistic Tuesday that voters would approve the bond issue.
Bancroft chief executive officer Toni Pergolin said that if they did not, the school, which currently serves 235 day and residential students, would have to stay put and modernize its existing facilities.
"We will all know that we gave it our best shot," she said in a statement.
Contact James Osborne at 856-779-3876 or firstname.lastname@example.org or follow on Twitter @osborneja.
Inquirer staff writer Rita Giordano contributed to this article.