In a case that Downingtown officials say could have a significant effect on municipalities throughout Pennsylvania, a judge recently cleared the way for the borough to sell part of a park to developers who plan to use the site for 300 homes and a retail center.

The same judge ruled against the development in 2010. This time, critics and supporters of the Kardon Park proposal - which could flood Downingtown with new tax revenue and residents - agree that the case is headed to another round of appeals, with some saying it could end at the state's highest court.

Both sides believe that what happens in the Chester County borough could affect the powers of municipalities statewide to sell or redevelop their parks.

Late last month Chester County Court Judge Katherine Platt, who has been presiding over the case since 2009, ruled that at least part of the park could be developed because the legislature - which gave the money to buy those parcels 45 years ago - has since lifted the requirement that it remain open for public use.

The decision was encouraging to the borough manager, who said the 20-acre project would bring millions in tax revenue during its lifetime, and infuriating to the Friends of Kardon Park advocacy group, which said Platt's decision could set a dangerous precedent.

Both sides plan to appeal parts of the decision, a process that could take at least six months. They say the guidelines on when parks can be sold need to be clarified.

"Let's say you can't maintain the park anymore. It's cost-prohibitive. Let's say, like in Downingtown's case, there's evidence of contamination," the borough's attorney, Patrick McKenna, said. Municipalities, he added, "need to know what they can do."

Similar disputes have landed in courtrooms across the region.

In 2010 Fox Chase Cancer Center dropped a plan to expand on part of Burholme Park leased from the City of Philadelphia after a Commonwealth Court judge blocked the development. In a case with an opposite outcome, Delaware County Court ruled last year that the Agnes Irwin School could build a playing field and bleachers on a Radnor Township park.

In Downingtown, officials have been trying to develop Kardon Park - one of six parks in the borough and the second-largest - for more than 20 years.

The park encompasses about 40 acres, 14 of which are in neighboring East Caln Township.

Borough Manager Stephen Sullins said the proposal would maintain about 20 acres, or half the park, as parkland while improving trails and mitigating the contamination.

Sullins said the proposed project would have a lasting impact on the 8,000-resident community by increasing the tax base and spurring retail and residential growth.

He estimated the 2.2-square-mile borough, which operates on about a $9 million budget, would see at least $100,000 in real estate tax revenue annually, plus fees and other taxes.

"It's how you support businesses from the dry cleaners to the art gallery to the jewelry shop," Sullins said. "All the business owners are looking for a lot more people. That's what makes the downtown and the business district come alive."

County planning director Ronald Bailey, acknowledging the concern over building on a public park, said the project would represent the kind of urban-centered growth the county officials prefer to sprawl that laps into farmland.

Kardon Park, which is just north of the borough's business district, is a stretch of ponds, fields, and forests with a paved path that has long been used by the public. The park, which the borough bought in pieces during the '60s and '70s, also houses the Victims' Memorial of Chester County.

Tests have shown, however, that the site is contaminated with arsenic, iron, and mercury from when the Downingtown Paper Co. and Kardon Industries Inc. used it as a landfill in the 1960s, McKenna said.

Developers Jack Lowe and Sarah Peck, who entered a sale agreement with the borough in 2007, plan to cap the contaminated ground with new soil or concrete and build 300 townhouses and 20,000 square feet of retail with apartments above those shops.

Sullins said the proposal would maintain about 20 acres, or half the Downingtown portion of the park, while improving trails and mitigating the contamination.

While that development would bring revenue to the borough, Samuel Stretton, attorney for the Friends of Kardon Park, said protections should keep municipalities from cashing in on parks during tough financial times.

"For the short-term revenue, they're willing to lose something that cannot be replaced," he said.

Platt's recent ruling focused on how the plots were acquired - not how they are used - in deciding whether they could be sold.

She said two parcels the borough acquired with state funds can be developed now that the legislature has lifted restrictions. The judge ruled that a third parcel, part of which is in East Caln and which was purchased by Downingtown in 1962, can be used for utility projects needed for the development. The borough would still own that property.

The parties disagreed on their interpretations of how Platt ruled on the final two parcels, which were acquired through eminent domain.

"If this decision that Judge Platt gave became the law of the land, any parkland that was acquired by condemnation could be sold," said Borough Council member Ann Feldman, who filed the lawsuit against the development before joining the council in 2010.

But borough attorney McKenna said he believed the judge ruled that the eminent domain lots couldn't be sold. Nevertheless, he said that even a partial reversal of the original order was a win for the borough.

"When we initially went through this, we were told we can't do anything, petition to sell the property is denied," he said.

"Now we have the same judge two years later saying you can sell two of the properties."