Issue Date: February 10, 2006
Financially strapped archdiocese subsidizes troubled center
By JOE FEUERHERD
A Washington Catholic cultural center is awash in red ink, and the Catholics of Detroit are financially responsible for it.
The John Paul II Cultural Center, a $75-million structure opened in March 2001, was built to be a tourist attraction and scholarly research facility. Five years later it is approximately $36 million in debt to the Detroit archdiocese. Whether the center will ever be able to repay those loans is uncertain.
Billed as a first-class museum, high-tech exhibit hall and Catholic think tank that would promote the church within the broader culture, the center today is a 100,000-square-foot-money pit. Expensive exhibits go largely unviewed, interactive displays mostly untouched, while annual foot traffic through the facility is less than one-tenth of the neighboring National Shrine of the Immaculate Conception.
There are no busy days at the center, said a former employee.
Constructed on a 12-acre site purchased from the neighboring Catholic University of America in Northeast Washington, the center was the inspiration of Detroit Cardinal Adam Maida, who, while serving as bishop of Green Bay, Wis., first proposed the idea to Pope John Paul II. But its the downsizing Detroit archdiocese, which has closed three dozen schools over the past three years and is considering consolidating or closing dozens of parishes, which might yet foot the bill for the financially struggling center.
The archdiocese has loaned or guaranteed loans totaling approximately $36 million to cover operating costs at the center, a source familiar with the centers finances told NCR. Ned McGrath, spokesman for the archdiocese, confirmed that the Detroit church has supported the center both monetarily and through in-kind contributions, but declined to put a dollar value on that aid. The cardinal thought it was a worthwhile project and still thinks so, said McGrath. But we just dont talk about our investments.
The centers executive director, Msgr. William Kerr, told NCR the $36 million figure is probably close to right though some of those funds, he said, went toward construction costs and not operating expenses. In addition, the center owes the Catholic University more than $2 million for the property on which the center sits. There is just no doubt that the archdiocese of Detroit was the real force behind the establishment [of the center] and therefore the guarantor of the centers survival, said Kerr.
Kerr, while confirming the approximately $36 million figure, said he did not have a precise amount. When asked if he could produce the precise amount, he instructed a reporter to contact Detroit. Spokesmen for the church in Detroit, however, while not denying the figure, refused to discuss the precise amount or to produce someone who could discuss the financial picture.
The centers June 2002 balance sheet, the most recent financial information provided by the center to NCR, shows total current assets of nearly $6 million (excluding the value of the property and long-term contributions receivable) and total liabilities of nearly $31 million.
When asked for additional financial information such as annual reports and audit reports, center staff referred a reporter to officials in the Detroit archdiocese. As an entity affiliated with the archdiocese, the center has a religious institution exemption from requirements to report its financial condition to the public.
Meanwhile, a Jan. 23 e-mail from Kerr to the centers staff casts doubt on whether the Detroit church will see any return on its investment. In conversation with members of the board of directors, we have begun a process for refocusing the purpose and goals of the John Paul II Cultural Center, wrote Kerr. On March 16th, the entire board of directors will meet to consider a thorough restructuring proposal of the mission, activities, personnel and administration of the center, Kerr wrote. Following that meeting, he continued, changes in all areas of the center may be implemented, affecting directors and other employees alike.
Warns the centers 2005-2009 five-year-plan: If we do not eliminate the debt, everything that has been developed to date will be destroyed.
Some Detroit Catholic activists have long thought the center a drain on church finances, but spokesman McGrath says that is not the case. Our involvement with the JP2CC goes back a decade, he said in an e-mail to NCR, a time when the archdiocese -- indeed the whole economy -- was more prosperous. Since that time, we can certainly say our support for our parishes and schools was never compromised by our investment in the JP2CC. The school closings were largely a result of declining enrollment, said McGrath, while shifting populations in southeast Michigan and the declining number of priests are the most significant factors in parish consolidations and closings.
Not everyone accepts that explanation.
The disgrace to me is that were closing churches in many instances because they cant pay back loans which dont even come close to what the diocese loaned the center, said Sister of St. Joseph Cathey DeSantis, executive director of the Detroit Catholic Pastoral Alliance. Weve been suspecting this for a very long time but we cant get the information [from the archdiocese] for obvious reasons, said DeSantis.
Detroits Maida was and is the prime mover behind the center. It wouldnt exist without him.
According to various accounts in the media (Maida did not respond to NCRs request for an interview), Maida first broached the subject of the center with John Paul II in 1989. It was to be a presidential library of sorts, though both the pope and the cardinal, as the project moved forward, emphasized that it was not to be a monument to John Paul II, but rather a cultural and intellectual mecca for the 21st-century church. John Paul II personally selected Washington as the site for the center.
Maida established the foundation responsible for raising the funds and ultimately managing the center (he continues to serve as its president). Contributions flowed, according to news accounts from the 1990s: $3 million from the Knights of Columbus; more than $1 million each from special collections in the Chicago archdiocese and the Peoria, Ill., diocese; and nearly $1 million from parishioners in the diocese of Gary, Ind. Many bishops throughout the United States stepped up to the plate and invited us into their dioceses, recalled Peter deKeratry, who in 1999-2001 worked for the company hired by the center to raise funds. Eventually, said deKeratry, more than 70,000 individual donors contributed and $67 million was raised, still $8 million short of the final construction costs.
As is true with many building projects, you often underestimate the real costs, which is what happened with the center, said deKeratry.
Some of the overruns resulted from the spare-no-expense philosophy embraced by Maida and those he charged with building the facility. The interactive exhibits were beautifully designed, but mind-bogglingly expensive, said a source familiar with the centers operations. Everything was custom designed and always first class and therefore terribly expensive to keep up, said the source.
This is a very expensive place to run, acknowledged Kerr, the centers executive director since April 2004. You turn the lights on in the morning and youve already spent a lot of money, he told NCR.
Establishing an endowment to fund operations, especially at the projects outset, was always part of the plan. But it didnt happen. The priority was to get the building up, said deKeratry. If we had raised another $30 million we would have had the place endowed, but the fact is we didnt.
Maida contributed the talents of his top Detroit staff to the project. In 1995 he appointed Msgr. Walter Hurley, now the bishop of Grand Rapids, Mich., as his delegate and project manager to oversee construction and start-up of the center. Before moving to Grand Rapids, Hurley served as Maidas point man on clergy sex abuse issues in Detroit. Another Detroit priest, Fr. G. Michael Bugarin, served as the centers first executive director, while the finance director for the Detroit archdiocese, Michael Gorman, was appointed to the centers five-member executive committee. The executive committee members, in addition to Maida, include Newark, N.J., Bishop John Myers; Pittsburgh Bishop Donald Wuerl; and Winona, Minn., Bishop Bernard Harrington, a Detroit priest who previously served as rector of the archdioceses seminary.
Gorman also serves as treasurer of the centers newly constituted board of directors. He did not respond to NCRs repeated requests for comment.
Im grateful that Pope John Paul II chose Washington as the site of this center, President Bush said at the March 22, 2001 dedication. It brings honor and it fills a need, said Bush.
Just what that need is has never been entirely clear.
The 9/11 attacks discouraged tourists from visiting Washington, as did the D.C. sniper killings a year later, said Kerr. And the centers relatively remote location -- its not easily accessible by subway -- has hindered tourist traffic. But there was a deeper problem, he said.
When the center was established, it was established with numerous tasks, said Kerr. We were involved in catechetical work, we were involved with interactive endeavors, we were involved with symposiums and dialogues. We were a unique kind of creation and we had not really spelled out [the mission] in our charters as clearly as perhaps it should have been spelled out.
Kerr was clear about the new vision in his Jan. 23 memo to the staff: The renewed mission of the center will concentrate on the Intercultural Forum [the centers think tank] and its educational and research support for the Catholic church in the United States. This approach was approved by the bishops on the centers executive committee and is supported by the largely lay board of directors, Kerr said.
Along with the new programmatic emphasis is a new approach to fundraising. In addition to the $1.3 million in annual direct mail fundraising, the center has established the Cardinals Council of 1,000, the goal of which is to generate three annual contributions of $10,000 from 1,000 donors. If successful, said Kerr, well be able to turn the lights on without worrying about them going out in the middle of the day.
And the debt owed to Detroit? Our long-term hope and plan is that we will begin to repay some of that liability, said Kerr. Maida, as required by church law, submitted his letter of resignation to the Vatican on his 75th birthday last March. He turns 76 March 18, two days after the centers board is to meet to redefine the direction of the facility.
It is one of his [Maidas] priorities to make sure that we are financially taken care of, said Kerr.
Joe Feuerherd is NCR Washington correspondent. His e-mail address is firstname.lastname@example.org.
National Catholic Reporter, February 10, 2006
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