One of the city's longest-running and most significant historic preservation battles - the effort to save and revitalize the historic U.S. Naval Home - came to a successful conclusion yesterday with the formal dedication of a massive luxury housing development by Toll Brothers.

"It's astonishing," said Gov. Rendell, standing at a podium set in front of the neo-Classical Biddle Hall, designed by William Strickland in the 1830s, home of the nation's first Naval Academy and site of a devastating five-alarm arson fire two years ago.

"This is an astonishing result for those of us who were true believers, and I was a true believer. . . . Did you ever think we'd get a restoration like this?"

Many in the audience - and even some on the podium with Rendell - had doubts over the more than two decades Toll has owned the site, largely letting it sit idle.

Toll optioned the site in 1981 and bought it outright in 1988 for $1.2 million.

Preservation Pennsylvania, a statewide nonprofit service organization, became so concerned about the 20-acre complex at 24th Street and Grays Ferry Avenue that the Naval Home was placed on the group's Pennsylvania at Risk list of endangered historic sites in 2001.

One building at the Naval Home complex, Laning Hall, was demolished in the early 1990s because it had deteriorated so badly. The city Department of Licenses and Inspections cited Toll for building violations in 1996 and for "demolition by neglect" in December 2002. After the October 2003 fire, the city sued Toll to compel the developer to make repairs to Biddle Hall.

For its part, Toll presented a number of development ideas over the years that failed to pass muster with the community or with various regulatory bodies. Since the Naval Home, vacated by the Navy in 1976, is both a local and national historic landmark, those regulatory bodies were legion.

Robert Toll, chairman and chief executive officer of the Horsham developer, known largely for its suburban housing, said yesterday that many times he lost patience with hassles over the site.

"I'd say, 'OK, sue these people! I don't care!' " Toll recounted from the podium. Yesterday, however, he said, "I can't stop smiling."

He said he stuck with the project at the urging of Toll executive Zvi Barzilay, and because, after all, "we were in it for profit."

When all is said and done, that's what the new development, dubbed Naval Square, is all about. It will eventually consist of about 1,000 townhouses and condos that will sell for up to $1 million. More than 200 units are already under construction, and by the fall all 345 units in the project's first phase will be under way, Barzilay said. About 90 units have already been sold.

Renovation of Biddle Hall, the enormous Greek Revival centerpiece of the site, has also begun. The roof, severely damaged in the fire, has been replaced, and interior renovation and construction work has commenced.

The whole project will cost Toll "several hundred million dollars," Barzilay said.

John Gallery, head of the Preservation Alliance of Greater Philadelphia, commended Toll for ultimately paying serious attention to preservation issues embedded in the site.

"I'd say five years ago, 10 years ago, everyone had written this off," Gallery said. But in the end, "Toll really reached out to involve the preservation community."

Neighborhood residents, often dubious, were also present at the dedication and said they, too, were amazed that the battle was finally ending.

"I have a file on this a foot thick," said Terry Gillen, who lives nearby.

Ann Hoskins-Brown, another resident, said she was "glad to see" the site under construction at last.

"It's really sparked a lot of development in the neighborhood," she said. "It's really been a catalyst."

Contact staff writer Stephan Salisbury at 215-854-5594 or