Today is the fall meeting of the Presbyteral Council, and we pray that the Holy Spirit is present at the meeting and that our Open Letter can be the topic of a fruitful discussion. Tonight is also the Priests Appreciation Dinner in Boston, and we also pray for its success in raising money for an important cause—the Clergy Retirement Fund. You can still “shout out” appreciation for a priest here.
For the first time yesterday, in our updated Open Letter, we mentioned a $26 million loan made by the archdiocese to the Catholic Schools campaign that appears to be at some risk of not being repaid in its entirety. Today we go into a little more detail about that and invite your open dialogue about it.
The anonymous bloggers here at Boston Catholic Insider do not know much about raising money, so we have high respect for those who have been successful raising money. The Campaign for Catholic Schools, under the leadership of Jack Connors, embarked on an ambitious plan in 2005 to revitalize Catholic schools in Boston. Older parish schools would be closed or consolidated into new regional “academies.” The major fundraising part of the campaign was called the 2010 Initiative, and on March 7, 2008, they announced plans to raise $70 million for completed and new projects. About two years later, on May 12, 2010 they announced they had raised $48.5 million of the $70 million needed to complete the Pope John Paul II Academy in Dorchester, which consolidated seven parish schools into a regional academy. They also said the Campaign had secured almost $58.8 million of the nearly $85 million needed to finish all the projects it has planned, including school consolidation and revitalization in Brockton, Gloucester, and South Boston. Problem is that we are nearing the end of 2010, donors are tapped-out, and the campaign appears to still be about $20 million short of their goal. Where does the money come from?
The answer appears to be a loan made in the 2009 fiscal year. If you look at page 16 in the 2009 annual report, you will see an increase in loans receivable of $19.6 million to the campaign for construction and start-up expenses at Pope John Paul II Academy in Dorchester and Trinity Catholic in Brockton, and if you look at page 45, you will see $26 million loaned to the campaign, of which $1.5 million was already paid back by June 30, 2009. (Note: in our original post we interpreted this as a $20 million loan, but later realized it was $26 million).
We are told that Jack Connors promised Cardinal O’Malley that he would build a new, state of the art Catholic school in Boston. Cardinal O’Malley is on record as being an advocate for Catholic schools so it sounds like it could be a win/win. This was apparently a selling point to the Cardinal in allowing Connors on the Finance Council, plus there existed the glimmer of hope that he might help raise money to balance the books too. When the 2010 Initiative was announced in 2005, there was no reason to assume the powerbroker would not deliver. By coincidence, even then, conversations had begun about selling Caritas, and friends of Jack (Chair of Partners, who might have his eye on Caritas in the future as documented elsewhere in this blog) such as Fr. Bryan Hehir just might have coincidentally helped bend the ear of the Cardinal and pave the way for Jack to be back on board in good graces.
The first phase, the Brockton school consolidation, went forward before enough money could be raised. We are told that the original idea was to secure some or most of the funding by selling off the real estate of the closed schools. We wonder what kind of understandable resistance may have been raised from the pastors whose parishes “owned” the properties, since under canon law, under the theory of subsidiarity, the pastor has the right to determine the disposition of the patrimony allocated to his parish. If anyone knows what the canon lawyers said about this and the extent of their involvement and approval, drop us a dime, would you?
We will get to Dorchester and the construction work led by John Fish, CEO of Suffolk Construction in our next installment. Any one know if it was a open-bid process, or a no-bid sweetheart deal for the contracts on school reconstruction, new contruction, and demolition? What was the process that led to the loan of some $26 million, primarily to one Catholic school in Dorchester? Had the archdiocese discussed or decided a year prior to sell its campus to BC because it needed the cash? Where did the money come from to pay for that expensive construction up-front? Might Parish Reconfiguration funds have been used to finance this, on the expectation that the money raised by Kathleen Driscoll (former Hill Holliday executive with Jack) and the Catholic Schools Campaign would go toward repaying the costs of Dorchester and other locations? Has the construction expense already been incurred against the projected $70 million cost, thereby leaving a $22 million shortfall and thereby meaning the schools cannot repay some significant portion of the $26 million loan? What is the guarantee that the Archdiocese will be 100% paid back for this initiative? What happens if the money ends up never being raised? If you know the answers to any of these questions, feel free to post them in the comments. Stay tuned tomorrow for the next episode of Lending Money…