By Gothamist |

Outraged By Property Sales To Luxury Developers, Affordable Housing Group Takes On The Catholic Church: Gothamist

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In February 2018, Val Orselli secured a long-sought meeting with one of the most important decision makers in the Roman Catholic Archdiocese of New York—the head of the church's real estate division.

Orselli, a project director with Cooper Square Community Land Trust, a Lower East Side housing group that develops affordable housing for low-income New Yorkers, was interested in buying the Church of the Nativity, a church on Second Avenue in the East Village that had closed in 2015. In his eyes, it was a win-win proposition: Cooper Square Community Land Trust could expand its affordable housing portfolio and build roughly 123 units for low-income seniors and families, and in doing so would continue Nativity’s storied legacy of serving poor immigrant communities in New York.

The land trust proposed a price of $18.5 million. Of that amount, $5 million would be paid to the archdiocese upon closing. The rest, which would use money from federal tax credits for middle- to low-income housing, would be paid in installments over a 20-year period.

David Brown, the church’s executive director of real estate, told Orselli he would get back to him.

Several months later, Orselli returned to Brown's office. In a show of support, representatives of city councilmembers Carlina Rivera and Margaret Chin, as well as the Manhattan regional representative from Governor Andrew Cuomo’s office, accompanied him.

But Brown was unmoved. The offer was insufficient, he told them. Among the sticking points was the land trust’s inability to pay upfront.

“He told me, ‘A dollar today is worth more than a dollar tomorrow,'” Orselli recalled.

Orselli took the rejection as a sign that the church, a tax-exempt institution, was more interested in getting top dollar for its property, which has been estimated as being worth as much as $50 million.

“I was a bit naive,” he said. Referring to the land trust’s pitch to do something with the property that was aligned with papal doctrines, he added, “They couldn’t care less.”

Over the course of the last year and a half, Orselli, a veteran housing activist and community organizer, has launched a public crusade to pressure the archdiocese to stop selling its decommissioned churches to private developers.

He acknowledged that the archdiocese has done good for the community by building affordable housing in the city over the years. “But we feel that the church should be held to a higher standard than just doing good," he argued. "It also needs to avoid doing harm. Building luxury condominiums in a community of color that will result in the displacement of people is unjust.”

Accounting for all the parishes, schools and other properties that fall under its jurisdiction, the Archdiocese of New York City is believed to be Manhattan’s largest landowner. Amid the city’s real estate boom, the Catholic Church has over the years become a powerful player in the industry, cashing in on the sale of its properties to luxury housing developers and even hiring a lobbying firm to influence East Midtown’s rezoning, which unlocked an estimated 1.1 million square feet of air rights at St. Patrick’s Cathedral potentially worth hundreds of millions of dollars.

As part of his campaign, Orselli has reached out to elected officials, community leaders, former members of Nativity Church and those at the Church of the Most Holy Redeemer on East 3rd Street—which Nativity’s parish was merged into and whose parish council must vote on what do with the closed church. He has even set up a table on several Sundays outside Nativity and once at the Church of the Most Holy Redeemer, inviting parishioners to sign postcards in support of the land trust’s bid to be sent to the archdiocese. Last year, community activists and parishioners joined together in a prayer gathering followed by a march to call on the Archdiocese to let Cooper Square Community Land Trust redevelop Nativity. They capped off the protest by singing, "This Land Is Your Land." An intern at NYU's Civic Engagement Initiatives and Urban Democracy Lab turned it into a film.

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Last month, Community Board 3 passed a resolution urging the archdiocese to “declare a one-year moratorium on the disposition of Catholic Church and other religiously-owned properties"; a town hall meeting on the issue is also planned for May. Originally sponsored by the Cooper Square Community Land Trust, CB3 and elected officials, including Manhattan Borough President Gale Brewer, have since added their names to the event. It was the latest sign of mounting political pressure on an influential religious institution whose annual white-tie charity dinners have long drawn politicians, business leaders, and New York's elite.

The development machinations of Trinity Church, the Episcopal parish whose New York real estate assets are valued at $6 billion, are well-chronicled thanks to a 2013 lawsuit by parishioners that forced the church to make its financial records public. But unlike Trinity, the Catholic Church is not obligated to reveal its land holdings. At minimum, since 2012 there have been at least eight church sales or land leases totaling $145.7 million, according to research compiled by Jeremy Magno, a researcher at New York University.

Of the eight properties, six either have been redeveloped as luxury residential or are slated for that purpose. The priciest of those deals was the 2016 sale of three Chelsea properties for $50.4 million, including the Church of St. Vincent de Paul on West 23rd Street, to a hotel developer. St. Vincent’s parish had spent years fighting the sale, but ultimately lost an appeal at the Vatican’s highest court.

There are indications that the church may be headed for an even bigger sell-off. In June 2017, the archdiocese announced on its website the deconsecration of 18 churches, a move that paves the way for them to sold. Two canon lawyers told the New York Times it was the largest number of deconsecrations they had witnessed in a single day.

Rebecca Amato, the associate director of NYU's Civic Engagement Initiatives and Urban Democracy Lab, said her research suggests that the church has been acting like a private property developer, liquidating assets that are not performing well—in this case, churches with shrinking parishes—and selling off its holdings at peak market prices.

It is not clear why the church is looking to cash in, but according to Amato, speculation has focused on the church's payouts resulting from child sexual abuse lawsuits. Those costs should only increase given the February passage of the Child Victims Act, which allows prosecutors to bring criminal charges until a victim turns 28 and assault victims to file lawsuits until the age of 55. It also creates a one-year “look-back window” that allows survivors to revive cases where the statute of limitations has expired.

For Amato, one of the problems from the diocese’s rapid divestment in New York is that it winds up exacerbating gentrification by displacing the very people, many of them low-income Hispanics, who had been Catholic Church parishioners.

In November, Amato traveled to Rome for an international conference sponsored by the Vatican about the closing of churches and the growing crises around them. During the conference, Amato and housing activists seized on a statement from Pawel Malecha, a Vatican official, who at one point said, that “the canonical preference is to maintain possession [of church buildings] and only exceptionally reduce a building…to profane use and only for grave reasons.”

The quote was later reported in a story published in the Catholic Worker, the newspaper formed by the Catholic Church movement focused on social justice and spearheaded by New York activist and journalist Dorothy Day, who worshiped at Nativity until her death in 1980. In a December story in America magazine, a publication of the Jesuits of the United States, Day's memory was invoked by activists who oppose the sale of the church for luxury redevelopment.

Ultimately, according to church law, the decision to sell Nativity must first be voted on by the parish council of Holy Redeemer.

Now, however, more than one church property is at stake. The diocese has said it would seek to develop 100,000 square feet of affordable housing at another East Village shuttered property, the Church of St. Emeric, at 740 East 13th Street. Church officials last year invited the Cooper Square Community Land Trust to be the developer.

Orselli responded by securing a partner for the project, Jonathan Rose Companies, a prominent affordable housing developer. But rather than build 100,000 square feet of housing, Orselli has insisted that the church allocate the entire lot for 300,000 square feet of housing. Under the land trust, all of the apartments would be reserved for very low- to middle-income individuals.

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According to Orselli, the diocese’s response was, “No, thanks.”

Brown did not respond to a request for comment, instead referring questions to the archdiocese’s spokesperson, Joseph Zwilling. In an email, Zwilling said that the Church of St. Emeric and Nativity “belong to their respective parishes.”

He added, “The archdiocese does not ‘own’ either church. However, we are working with the leadership of each of the two parishes, as they consider how to proceed with the possible use, rental, or sale of the property.”

In the story for America magazine, Zwilling defended the church's "historic, extensive, and ongoing commitment to providing high quality affordable housing," saying that the church manages nearly 2,300 units of affordable housing in New York City.

According to Bernard Connaughton, a member of the parish council at Most Holy Redeemer who wrote the Catholic Worker story about the Vatican conference, feelings among parishioners are mixed.

“There are some people who want to sell at market rate, and some who prefer to let Cooper Square develop it,” he said, adding, “I can see both sides of this.”

Proceeds from a sale would be divided equally between the controlling parish and the archdiocese. But it is unclear how much Most Holy Redeemer would stand to gain from the sale. The church is required to pay back money it borrowed from the diocese, mostly for capital improvement expenses.

Father Sean McGillicuddy, of Most Holy Redeemer, declined to comment, referring any questions to the diocese.

Although officially, the decision to sell is up to the parish, the diocese has made its preference known to those at Most Holy Redeemer, telling parishioners who have a long history of working with the community, “You’ve done more than your share,” Connaughton said.

“I don’t think they are being selfish," said Connaughton. "I just think they think they can use that money other ways,” he said. “I think they are doing what most people would do.”

But another parish council member, Joanne Kennedy, said she was bothered by the decision-making process, which she said has been neither transparent nor clear-cut. Unlike parish council members at bigger and deeper-pocketed churches, those at Most Holy Redeemer are not elected, and the council's meetings are informal. According to Kennedy, the parish was told that a church sale must be signed off by five individuals: two trustees of the church, the pastor, the archdiocese’s real estate executive, and Cardinal Timothy Dolan.

But to date, no council vote has been scheduled. Kennedy said the church, whose parishioners include a large community of working-class Hispanics, has never before taken up such momentous issue. Up until now, votes on the council ranged from how to handle a leaking roof to deciding when to hold the parish dance.

“Now we are facing a $50 million decision,” Kennedy said. “It feels false to make an informal process bear the brunt of such an important decision.” She said she felt Nativity parishioners deserved a say, but many of those churchgoers have since scattered to other parishes.

A lot is riding on the deal. Once the property is sold, the parish will no longer have a stake. Back in 2012, Our Lady Help of Christians, a church on East 4th Street, was sold for $41 million. After initially proposing an 158-unit rental building with 22 affordable units, the developer changed his mind and built luxury condominiums instead. At the time, units ranged from $1.1 million for a one-bedroom to $11.25 million for a penthouse.

It is the very outcome Kennedy says she wants the church to avoid.

“That’s the irony,” she said. “Why is the church declining? It’s because of the rising rent and what that does to families.”