LA Church to sell headquarters to pay sex claims
By Paul Pringle
Los Angeles Times Staff Writer
May 16, 2007
The Los Angeles [Roman Catholic] Archdiocese will sell its administrative headquarters and perhaps other non-parish properties to help pay upcoming settlements of molestation claims against clergymen, Cardinal Roger M. Mahony said Tuesday.
Attorneys and other representatives for the alleged sexual abuse victims immediately dismissed Mahony's announcement as an attempt to generate sympathy for the archdiocese, which faces more than 500 molestation cases.
If recent payouts are a guide, the final settlement bill could be $500 million to $600 million, and the archdiocese and insurance companies are fighting over how much of the total the church should pay. Mahony has been under pressure to pay half the amount, as the Diocese of Orange did in a $100-million molestation settlement in 2004.
Settlement talks have dragged on more than four years.
"The cardinal has instructed his attorneys to pull out every weapon to try to deny victims a single nickel," said plaintiffs attorney John Manly. He said the church has enough insurance coverage and other assets to settle the cases without unloading real estate. "The notion that the cardinal would have to sell buildings to pay settlements is just laughable," Manly said.
A Mahony spokesman declined to answer any questions about the prospective sales, and an attorney for the archdiocese did not respond to an interview request.
The church has land holdings in Southern California worth an estimated $4 billion, a Times analysis has found.
The administrative headquarters in the Mid-Wilshire area could fetch $40 million or more in the red-hot office market, said Tom Bohlinger, a senior vice president for investment properties with commercial broker CB Richard Ellis.
"At the high end, I would maybe see $47 million," he said.
In his announcement, made on the archdiocese's website, Mahony said that the insurance companies should cover "the major share" of the settlements but that the church must be prepared to pay a portion.
He said the archdiocese has assembled a list of 50 properties it could sell, starting with the 12-story building at 3424 Wilshire Blvd., which the Thrifty Payless firm donated to the church in 1995.
The structure houses offices for the archdiocese's central administration, ministries and other services. Mahony said the archdiocese would either lease office space back from the buyer or find quarters elsewhere.
He did not identify the other properties being reviewed for a possible sale but said no parishes or schools would go on the block. Some of the properties have been held as sites for future parishes and schools, he said.
"Our preference would be to retain all of those properties," Mahony said. "But we have no other way to raise our share of money for coming settlements except through such sales."
Mahony said the archdiocese will also "reevaluate some of the services and ministries it provides to parishes," but he did not elaborate.
In December, after the archdiocese settled an initial group of 46 molestation cases, a Times analysis found that the church was the recorded owner of at least 1,600 properties in Southern California.
Most of them are used for religious purposes, such as churches and schools.
But the archdiocese also has invested in oil wells, farm parcels, commercial parking lots, a fashion district building and the land under an Alhambra car dealership, The Times found.
As of last year, the archdiocese had investment funds of about $660 million, although it said most of the money belongs to affiliated organizations and parishes, according to the church's newspaper, the Tidings.
Mahony said in his Web posting Tuesday that church leaders and others have been "working diligently" to settle the molestation claims, about 170 of which are set for trial by January.
"It is my daily prayer that this process will continue to intensify, and that in the near future these cases can be fairly settled," the cardinal said.
But the lead attorney for the plaintiffs, Raymond Boucher, said the two sides have "yet to have a single meaningful settlement discussion" since December.
Mary Grant, Western regional director of the Survivors Network of Those Abused by Priests, said Tuesday's announcement was "probably the first of several shrewd moves Mahony will make to claim poverty."
"We hope that Catholics don't buy into an another maneuver," said Grant, who has a lawsuit pending against the archdiocese.
* * *
This was how the Archdiocese of Los Angeles broke the news on May 15:
Cardinal Roger Mahony has released a statement addressing the process of funding future settlements in civil cases against the Archdiocese.
ARCHDIOCESE BEGINS PROCESS TO FUND
FUTURE SETTLEMENTS IN CIVIL CASES
By Cardinal Roger M. Mahony
Archbishop of Los Angeles
May 15, 2007
Last December, the Archdiocese of Los Angeles settled 46 civil cases in which clergy abuse had been alleged. The total settlement cost was $60 million, with the Archdiocese contributing approximately $40 million of the total amount. At the time of that settlement, I wrote:
Now that this settlement is finalized, our attention will focus on the resolution of all remaining cases. To reach a settlement in those cases will require the active participation of the many insurance companies who provided liability insurance during those past years when abuse occurred. It is my hope that these insurance companies will join all of us in moving steadily toward a final settlement of these cases as soon as possible.
Over the past several months, attorneys, judges and Church leaders have been working diligently to fashion a settlement that is fair and just. It is my daily prayer that this process will continue to intensify, and that in the near future these cases can be fairly settled.
Though it has always been the position of the Archdiocese that the insurance companies must honor their responsibility to fund a major share of future settlements, the Archdiocese must also be prepared to fund its share of these coming settlements.
As I also said last December, this will require the Archdiocese to begin to dispose of non-essential real estate properties in order to raise funds for coming settlements, and to re-evaluate some of the services and ministries it provides to parishes.
The Archdiocese does not invest in real estate as a goal; rather, properties were acquired over the years to establish new parishes, schools, various charitable institutions, convents, etc. Some properties are held for future parishes, future schools, and similar ministry purposes. Our preference would be to retain all of those properties. But we have no other way to raise our share of money for coming settlements except through such sales.
No parishes or parish schools will be closed to fund these settlements, nor will their essential ministries be affected by these sales. None of the properties being considered for sale are being used by the parishes of the Archdiocese.
I have established a special working group with membership from the Archdiocesan Finance Council, the Deans, the Council of Priests, and the College of Consultors to identify possible eligible properties and to rank them according to use and value. Some 50 properties have already been identified, and further appraisals are being sought on their fair market value. Other possible properties that could be sold are being studied.
With concurrence of our major consultative bodies, I have requested that the first major property to be sold will be the Archdiocesan Catholic Center, located on Wilshire Blvd., in the mid-Wilshire area of Los Angeles. It is only right that the Archdiocese begin this process by demonstrating our commitment to reach final settlement in these cases by selling our central administrative building. We would then either lease other lesser office space for our ministries and services, or possibly lease back some space in the existing building.
I once again renew my pledge and that of the Archdiocese to continue the important work of preventing sexual abuse and the potential for abuse through our abuse prevention training programs, screening procedures for all priests, employees and volunteers, and our age-appropriate safe environment programs for children in our parishes and schools.
I have often said over these past years that Gods grace is more powerful than the evil of sinful actions. Our Church has become more humble, more faithful, and more centered upon our primary mission: to evangelize all peoples in the name of Jesus Christ.
I am confident that we will be able to carry forward this mission with renewed energy and with a bold creativity.
Let us pray for the special intercession of Our Lady of the Angels that she will guide all of us in restoring wholeness to victims and integrity to the Church.