School officials said they paid $4 million last week for the five-building property abutting the campus.

The deal resolves a controversy ignited in December 2006 when Moorestown Friends, which has 795 students in prekindergarten through the 12th grade, acquired the former Acme supermarket on Chester Avenue and announced a plan to create classrooms there.

The nonprofit school would not have had to pay taxes on the Acme property after it was put to educational use, provoking concerns from residents about the loss of a potential commercial facility, and valuable tax source, on the downtown lot. Others worried about the safety of having students cross a major intersection to get there from the school's main building.

Renovation of the Acme was still in the permit process when Greenleaf, a century-old, Quaker-run retirement community on four acres, closed June 30. The Greenleaf buildings are at 28, 32, 36 and 38 E. Main St. and 41 Prospect St.

"It was fortuitous timing," said Mike Schlotterbeck, director of marketing and communications at Moorestown Friends. "If Greenleaf had become available six months after the fact, it's very possible that construction would have begun on the Acme property."

The new space will faciliate the school's additions of an honors program, eight Advanced Placement courses, and a Chinese language and cultural program.

Moorestown Friends is seeking a commercial tenant for the former supermarket. Because it is not using the building, the school has been paying taxes on the property. The building would continue to be taxed if used for a commercial purpose.

Moorestown officials, who had encouraged the school to buy Greenleaf, praised the decision.

"I think it's great," Councilman Seth Broder said. "It appears that the Moorestown Friends School shared the town's vision."

Allowing a commercial venture on the Acme property gives Moorestown a tax benefit and "enhances the town, from either a shopping or dining perspective," he said.