PAVEMENT FOR PAYMENTS
Much of $100 mil. from sale of Holy Name lot to go to church sex-abuse debts
Anticipating getting $100 million or more from the sale of a parking lot at Holy Name Cathedral, the Archdiocese of Chicago expects to spend most of that windfall repaying money that was borrowed to cover the financial costs of clergy sex abuse claims.
That’s according to a Chicago SunTimes examination of the church’s most recent financial reports and interviews that show the archdiocese owes more than $200 million, mostly related to sex-abuse claims. And the church estimates it could end up with another $100 million in costs for pending and future claims.
In October 2017, church officials, discussing plans to sell the property across from Holy Name, the seat of the archdiocese, said, “We sought a developer who shared our vision of improving the neighborhood we have been proud to call home for nearly 175 years.”
And developers unveiled plans to put up two high-rise residential towers on what’s now largely a parking lot for the cathedral — prime real estate at Chicago and State.
They hope to finalize the sale of the Holy Name lot and begin construction work within the next month or two, according to developer Jim Letchinger, who’s overseeing the project with Sterling Bay.
The church is on a good path to improve its financial footing, one source familiar with the archdiocese’s operations says
— guided by an advisory finance council filled with accountants, bankers and other professionals in the business world.
But another knowledgeable source paints a more alarming picture, suggesting the church might eventually need to tap additional funding sources or have to make tough financial choices. Selling the Holy Name parking lot “would go a long way” toward attacking the sex-abuse debt, “but you’re still $200 million short,” that source told the Sun-Times. “It mitigates the problem but doesn’t solve it.”
In addition to the debts directly tied to sex abuse claims, the archdiocese is confronting a shortfall in its priests’ pension fund, which helps support retired clergy but is underfunded by millions of dollars. Church officials won’t say how bad that shortfall is, but internal church records obtained by the Sun-Times show the archdiocese is trying to find ways to deal with this.
The archdiocese, the Catholic Church’s arm for Cook and Lake counties, overseen by Cardinal Blase Cupich, has contemplated selling the Gold Coast “cardinal’s mansion,” the sprawling landmark building where Cupich’s predecessors lived.
The archdiocese also is in the process of closing and consolidating schools and churches, many of which have been hit by declining enrollment and Mass attendance. But Cupich has portrayed the closures and mergers as motivated less by finances and more as a “spiritual revitalization.”
Victims advocates have long maintained that some Catholic dioceses hit by litigation over clergy sex abuse have cried poor, in some cases even filing for bankruptcy, as a way to scare off more people from filing lawsuits and protect their assets.
In Chicago, the archdiocese has paid off claims but said little about the long-term financial implications.
Before Cupich was sent to Chicago by Pope Francis in 2014, the archdiocese had established a practice of not using money collected from the faithful in the pews to pay for sex-abuse costs. Instead, church officials said those costs would be covered by land sales and shortterm borrowing.
“We use the proceeds from asset sales and borrowings to pay abuse claims,” Cupich spokeswoman Paula Waters says. “We use interim borrowings to meet obligations in advance of receiving sale proceeds.”
But all of the church’s assets ultimately trace back to donations, experts in church finances say.
The archdiocese’s borrowing has added up because it hasn’t been able to make enough money fast enough from land sales to cover abuse claims.
Government records show numerous church-owned parcels in the Chicago area have been sold or leased in recent years, including vacant land and former churches and schools.
The church won’t say which ones went toward sex abuse costs and also notes that money from some property sales reverts to individual parishes.
Cupich wouldn’t agree to an interview.
And Betsy Bohlen, his $300,000-a-year chief operating officer, would answer only certain questions and do so only by email.
Asked about future tough choices to pay off sex abuse costs, Bohlen wrote: “The archdiocese has been transparent about the financial cost of misconduct. Paying for claims does require diverting assets that could otherwise been used for the ongoing mission of the church. The archdiocese continues to evaluate the sale of land and other assets in order to meet all required obligations.”