The Oak Bluffs selectmen voted this week to complete a complicated, long-delayed land swap between the town and the Martha’s Vineyard Land Bank involving parcels in the Southern Woodlands.

The transaction will complete the land bank’s holdings in the woodlands and is expected to eventually lead to more affordable housing for the town.

There were three key aspects to the transaction. The land bank has agreed to pay back taxes on a 24-acre portion of property owed by the former owner when it was sold 14 years ago, and the town has agreed to waive interest and penalties on the taxes owed. The town has also agreed to clear the record about two unrelated parcels off County Road, which were listed as owned by the town in assessors records but are in fact owned by the land bank, in the opinion of town counsel.

“Those three issues represent all of the laundry that didn’t get completely washed when we had the whole original Southern Woodlands purchase,” said town administrator Bob Whritenour. “What this does is completes that, gets some closure and allows us all to move forward together.”

Issue dates back to 2004 when the land bank bought 190 acres from developer Corey Kupersmith. — Map by Graham Smith

The land swap agreement dates to October 2004, when the land bank bought 190 acres of the Southern Woodlands from developer Corey Kupersmith for $18.6 million. At the time it was the largest purchase ever made by the land bank.

The purchase ended years of bitter regulatory battles between Mr. Kupersmith, who wanted to build a golf resort on the property, the town and the Martha’s Vineyard Commission.

Among other things, the sale agreement spelled out a plan to swap a 24-acre landlocked parcel owned by the town for another 24-acre parcel owned by the land bank that would abut a separate town-owned lot of six acres adjacent to the Martha’s Vineyard Arena, with access to the Edgartown Vineyard Haven Road.

The town-owned landlocked parcel has long been dubbed the hole in the doughnut because it had no access from a public road and was surrounded by land bank property. The intent was to swap it for land that would have access to a major roadway, so it could be developed as affordable housing by the town.

But the landlocked parcel also had title problems that would need to be cleared. The legal work became delayed when the town, strapped for funds during a period of financial belt tightening, decided it could not pay for it. Now the title work has been completed. “The title insurance company has agreed to insure the title of the town,” Mr. Whritenour said. “The title is adequate.”

Negotaitions with the land bank over the back taxes followed.

Mr. Whritenour said at the time of the sale, the land bank, which is tax exempt, had been issued a municipal lien certificate indicating it did not owe any taxes on the transaction. But the land bank has since agreed to pay Mr. Kupersmith’s delinquent taxes if the town forgives the interest and penalties on past due bills.

Back taxes at the time of the sale amounted to $132,146, while the penalties that have accrued since 2004 amount to $422,082, Mr. Whritenour said.

The town sought special permission from the state on the tax matter.

“The Massachusetts Department of Revenue has approved the town’s right to waive penalties and interest,” Mr. Whritenour told the selectmen at their meeting this week. “The land bank is prepared to recommend payment of those original taxes.”

In a final step, the town must seek a home rule petition from the state legislature that will give legal authority to complete the transaction since it involves conservation land.

On Wednesday land bank executive director James Lengyel said he was happy to see the matter finally come to a close.

“We are pleased . . . and we look forward to finalizing everything,” Mr. Lengyel said.

He said the land swap will not affect use of the Southern Woodlands, a land bank nature preserve that includes open fields, rolling woodlands and a network of walking trails above the Lagoon Pond. The property once hosted the Webb’s Family Campground. A plan by the land bank to revive the camp ground on the property never materialized after bid were solicited but attracted no interest.

As for the 24 acres that are expected to become town land, Mr. Whritenour said a deliberate planning process will be held around possible use for the property. “It’s going to be subject to a lot of planning,” he said. “We are in the throes of getting our comprehensive plan put together. I don’t think there should be a rush to judgment in terms of the ultimate use of that parcel. We’re going to take it in stages . . . . It will be a fairly detailed public process . . . The town does not have immediate plans to rush in for any critical decisions.”