Honestly, would you want your small child going to school there and subject to fears and nightmares? It just isn't a right place for impressionable youngsters any more, or anyone else in the community who lived through the horror, news reports, distraught neighbors, etc.
There is no problem for the children if the adults do not bombard them with it. Did we raze Dallas after November 1963? Should we have?
Make it into a mosque.