Haddonfield’s $3.25M settlement with rehab developer opens path to housing on Bancroft site

Haddonfield’s epic struggle to settle on an acceptable future for the former Bancroft NeuroHealth campus on Kings Highway may be entering a new phase.

The Camden County borough is paying a company associated with developer J. Brian O’Neill $3.25 million to avoid enmeshing the property in what could have been years of expensive litigation, Mayor Colleen Bianco Bezich said Monday.

The settlement of a lawsuit filed by O’Neill’s 2 Hopkins Lane LLC against the borough last December also will enable Haddonfield to pursue residential development — including 10 affordable units — on the 8.2-acre portion of the property for which the LLC has agreed to give up its option.

The lawsuit alleged that the borough had partnered with 2 Hopkins Lane in 2016 not to develop housing on the Bancroft site but instead to prevent construction of one of O’Neill’s Recovery Centers of America addiction treatment facilities on the property. The borough contended that its sustained and good-faith efforts to work with 2 Hopkins Lane were unsuccessful.

“None of us are thrilled, but we feel strongly about moving the ball forward,” Bezich said during a news conference with fellow borough commissioners Kevin Roche and Frank Troy. The three voted unanimously to approve the settlement in June.

In an email, Kevin H. Marino, the lawyer for 2 Hopkins, said his client “is very pleased with the settlement, which we feel is a fair and appropriate resolution of this long-running dispute.”

Haddonfield is obligated to provide 10 affordable housing units on the Bancroft site under terms of a legally binding agreement it signed with New Jersey’s Fair Share Housing Center in 2019.

In June, the New Jersey Superior Court judge overseeing the agreement directed the borough to issue requests for proposals from residential developers that would include the 10 affordable units. A number of proposals have been received ahead of Thursday’s deadline. The Bancroft project is part of a larger legal requirement to provide more affordable housing in the borough under the Fair Share agreement.

Haddonfield also has launched a program to buy existing homes to rent to income-eligible tenants. With the purchase of a Tanner Street duplex, the borough will have eight properties in its portfolio. Earlier this year, a solicitation by Triad Housing Programs, the company Haddonfield hired to attract and screen potential tenants, drew 1,169 inquiries.

Questions about the future of the Bancroft School property — named for Margaret Bancroft, who revolutionized special education in the late 1800s — have created conflicts and raised hopes for well more than a decade.

Some residents argued for expanding the adjacent Haddonfield Memorial High School campus onto the Bancroft property, while others sought to make the entire property a park. Some wanted to see construction of age-restricted housing, raising fierce objections from others seeking to minimize the number of townhouses or apartments built there. For still others, “affordable” was anathema.

The borough website’s “Bancroft Site — Redevelopment Plan” page currently has no content. The mayor and her fellow commissioners said five acres would be set aside as parkland.

A developer plans to convert a remaining building, Lullworth Hall at the corner of Kings Highway and Hopkins Lane, into four condos by rehabbing the mansion’s interior and adding a garage with a second-floor residential unit in the rear. And in a land swap with the borough last August, the Haddonfield Board of Education received 4.7 acres next to the high school.

In 2013, the Board of Education had proposed buying the entire property for $12.3 million, but a ballot question to authorize the purchase failed.

» READ MORE: OPINION As Bancroft leaves Haddonfield, the borough and the school look ahead

Enter O’Neill, who proposed constructing one of his addiction treatment chain’s first rehab centers on the property in 2015. Amid the resulting furor, the borough itself bought the Bancroft site for $12.9 million the following year.

O’Neill retained an option to buy back 8.2 of those 19.2 acres, and in 2019, he and the borough entered into an agreement in which his development firm dropped the rehab proposal and planned to build 80 market-rate townhouses as well as the 10 affordable townhouses there.

Although an estimate of what the borough has spent so far on the Bancroft site was not immediately available, Haddonfield paid about $1 million to demolish almost all of the buildings on the east side of Hopkins Lane, according to the mayor. The school board and the borough “are in conversation” about the estimated $1 million cost of demolishing the asbestos-laden Cooley Hall classroom building.

During the news conference, the three commissioners were cautiously optimistic about the opportunity the settlement represents. They said they are eager to review the proposals that were submitted and develop a plan that does justice to the site’s potential, as well as to the interests of borough taxpayers.

“I feel confident that the three of us and our administration, working together, can move things in a new direction — and ultimately salvage a priceless piece of Haddonfield’s history,” said Bezich.