Diocese property deals net $90m

Since the summer of 2003, the Archdiocese of Boston has sold or reached agreements to sell more than $90 million in real estate, a Globe review has found. That sum is in addition to the $99 million sale of the cardinal's residence and surrounding property in Brighton last year.

With several dozen properties still expected to be sold as part of the sweeping parish consolidation, the tally suggests the archdiocese will generate significant revenue through its real estate sales, though church officials decline to speculate on the ultimate proceeds.

Although properties being sold as a result of the consolidation have generated most of the funds and attention, the archdiocese has also been selling off other unused land or abandoned buildings unrelated to those closures, the Globe found. In addition, individual parishes have separately sold $30 million worth of property during the same period by unloading unused parcels to help finance local construction projects or to pay off parish debts.

''There's very definitely a massive liquidation going on with regard to the archdiocese," said Secretary of State William F. Galvin, who has pushed for the archdiocese to publicly disclose more financial information.

The archdiocese, since announcing its intent to consolidate parishes in December 2003, has declined to say publicly how much money it would seek to raise from the sale of shuttered church properties.

Archbishop Sean P. O'Malley plans to detail the real estate transactions in the spring as part of a new comprehensive financial statement he has pledged to make annually. But in interviews this week, Archdiocesan officials downplayed the significance of the recent activity, saying the church has always tried to efficiently dispose of unused property.

While acknowledging the uptick in sales due to reconfiguration and a handful of other expensive properties that were sold after extensive marketing, they stressed that the church is primarily selling properties for the same reason it has in the past -- because it no longer needs them.

''It's not a liquidation of cash for capital," said David W. Smith, the chancellor of the archdiocese who oversees the real estate transfers. ''It's a liquidation for property that isn't used in ministry. What capital it generates is helpful. But it's not that the diocese is trying to raise money."

The Globe examined real estate sales by the archdiocese dating back to August 2003. O'Malley, who was installed as archbishop July 30, almost immediately began an aggressive effort to address the church's financial woes, announcing in September an $85 million settlement with more than 500 victims of abuse by Catholic clergy. In December 2003, the archbishop announced the chancery and seminary property in Brighton would be sold to pay for the settlement, and that he would close and merge parishes throughout the region due to declining numbers of clergy, changing Catholic demographics, and financial pressures.

The Globe found that the archdiocese has already raised more than $32 million in sales of property from 15 parishes closed last year. In addition, eight purchase and sale agreements worth $29 million are pending from the sale of property in additional parishes that have been closed or merged, said Terrence Donilon, a spokesman for the archdiocese. The sales from the closed parish properties are being used only to pay the direct costs and outstanding bills of closing churches and to support the operating budgets of remaining parishes, said Smith.

In addition to the properties being closed due to reconfiguration, the Globe examined nearly $30 million worth of additional sales by the archdiocese during the same period. Most of the proceeds for those sales go to the archdiocese's central fund. However, the proceeds for several sales were returned to funds for cemeteries or particular ministries for which for sale was made. As for the additional properties the archdiocese is selling, Smith suggested the pace of sales was routine. ''The properties were just sold because we didn't need them any more and we're better off investing the cash than holding onto real estate we don't need," he said.

While buyers of the church properties plan a variety of new uses, housing proposals dominate. Nine of the 15 parish properties sold under the consolidation began will be transformed into well more than 100 total housing units -- including at least 9 homes considered affordable for moderate-income families. The archdiocese's nonprofit agency is also planning to develop an affordable housing development at another former church property in Salem.

Among the largest sales of shuttered parishes were two sold in August: Blessed Sacrament parish complex in Cambridge, which raised $5.5 million and is being converted to condominiums.

Three other churches that closed as part of reconfiguration will be used for worship by Protestant denominations, and Catholic students will continue to participate in Catholic services at St. Ann's Church, which was bought by its neighbor, Northeastern University, for $4.8 million last month for use as a student community center. Tufts University bought Sacred Heart in Medford in May for still-to-be-determined institutional uses, and the city of Quincy and the South Shore YMCA will use the former St. Boniface property for a community center.

Though the closure of parishes was driven in part by declining church finances, the archdiocese has stressed that it did not select individual churches for closure based upon their potential real estate values. ''The sale or reconfiguration process has never been driven by money," Smith said.

Real estate brokers who have handled the sales for the archdiocese said church officials did not tell them how much they hoped to make on the individual properties. The brokers simply solicited bids, which they then submitted to the archdiocese.

''The only guidelines I get is, basically, they're trying to maximize their sales price while trying to keep an idea of what the use is, for the good of the neighborhood," said Jim O'Neill a broker with Nordlom Company in Burlington who has handled several of the sales. ''They're trying to get a good price but also they're concerned about the end use of the property."

While the archdiocese endeavors to improve its financial situation, individual parishes are separately making significant moves in their own neighborhoods. During the period examined by the Globe, parishes sold nearly $30 million worth of property, including vacant land, unused cemeteries, aging rectories, and an abandoned convent. In Wellesley, a dozen $1.5 million homes are rising from unused land beside a cemetery sold last year for $6.75 million -- the largest sale for any Catholic property since 2003. In Hudson, a development company associated with the Kraft family, which owns the New England Patriots, bought vacant cemetery land for $1 million in 2004; a 140-unit senior housing development is now being built there. Other parishes have embraced affordable housing -- one of the missions of the church. In Hyde Park, a vacant convent that had once housed 22 nuns was reopened this month as 40 apartments for low-income senior citizens.

''It wasn't a question of making money," said the Reverend Peter Nolan, the pastor of Most Precious Blood parish, who noted he could have sold to a more profitable venture. He said his parish has access to the proceeds from the sale, which will likely be used for church maintenance. ''We're reserving for the rainy days."

In the summer of 2003, the archdiocese warned parish priests that they had to begin paying their bills; many had debts to various parish funds and the trustees who oversee life insurance programs and other funds were concerned they would no longer be able to offer the services, said Smith. However, he said the volume of property sales by parishes should not suggest parishes are facing broad financial problems or dwindling support from the archdiocese. He said that some parishes are in stronger financial shape than they were years ago.

''Some of this money from parish properties does pay off old debt, that's true," said Smith. ''But fundamentally, the parish sales are more related to expansion, repair, remodeling, rehabilitation of parish facilities than they are to pay off debt."

All told, properties sold by the archdiocese and its parishes are slated to deliver more than 563 homes or condos -- 93 of them affordable -- to redeveloped church property across the archdiocese. Homeowners are even buying small rectories and parish education centers for use as single-family homes.

While many of the projects have won local support, the sweeping parish reconfiguration and real estate sell-off have ignited concern among church observers who want a clearer accounting of how the archdiocese is using its funds. The clergy abuse crisis and parish closings have tested the archdiocese's relationship with lay Catholics, and some say only a more open accounting by the church will restore public confidence.

State Senator Marian Walsh, a West Roxbury Democrat, has sponsored legislation that would make churches subject to the same financial disclosure requirements as other charities in Massachusetts. Walsh is not satisfied with O'Malley's plan to offer a financial report next spring, saying more current information is needed on real estate sales that have already taken place.

''There's a lot of concern for the fact that so many properties have already been liquidated, and wanting to know where is that money going, how is it being spent?" said Walsh.

Stephanie Ebbert can be reached at ebbert@globe.com.