AFTER A five-year court battle with the city, the Boy Scouts of America's local chapter, the Cradle of Liberty Council, has agreed to vacate its city-owned building.

Also as part of the settlement announced yesterday, the city promised to pay $825,000 for improvements made to the building near the Benjamin Franklin Parkway on 22nd and Winter streets, which the Boy Scouts have occupied since 1928. Administrative offices must be empty by June 30 and the remaining operations are to leave by Oct. 31.

It is unclear what will become of the building. City Solicitor Shelley Smith said the city has not yet determined how the building will be used.

At the heart of the dispute was the Boy Scouts' national policy that banned openly gay members from joining the organization - a violation of Philadelphia's fair-practices law because the Scouts were using the building essentially for free. The city argued that an organization that discriminated against anyone based on sexual orientation could not reap city benefits.

The city tried to evict the Boy Scouts and the group subsequently sued the city in 2008.

A jury ruled in favor of the Boy Scouts in 2010 and the city was ordered to dish out $877,000 in the group's legal fees, which eventually increased to more than a $1 million as the case wore on. The administration then tried to sell the building for $500,000, but that arrangement flopped.

The city appealed and yesterday both parties were pleased an agreement had been reached.

"When a significant case can be resolved with both parties feeling satisfied with the result in whatever way they are satisfied, I think that's a good thing for all of the parties," Smith said.

Tom Harrington, Boy Scouts executive director and CEO, said the organization is still looking for an alternative location, adding that they have an office in Wayne.

"We're pleased that this is over," Harrington said. "The dispute has been going on for about 10 years. We felt it was best to resolve the dispute with the city and move on."

The Scouts' National Council will decide at a meeting in Texas later this month whether to lift a ban on openly gay youth, but a bar on gay adults will continue. The Cradle of Liberty Council had sought to reverse its policy in January for members and leaders here, but the national organization wouldn't allow it.