PAVE­MENT FOR PAY­MENTS

Much of $100 mil. from sale of Holy Name lot to go to church sex-abuse debts

Chicago Sun-Times - - FRONT PAGE - ROBERT HERGUTH RE­PORTS,

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.”

AN­NIE COSTABILE/SUN-TIMES

The Holy Name Cathe­dral park­ing lot at Chicago and State is be­ing sold by the Arch­dio­cese of Chicago to be turned into a high-rise de­vel­op­ment.

AN­NIE COSTABILE/SUN-TIMES

The Holy Name Cathe­dral park­ing lot at Chicago and State is be­ing sold by the Arch­dio­cese of Chicago. Plans call for it to be the site of two high-rises.

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