Introduction to the NY Archdiocese Property Sale
The Archdiocese of New York has submitted paperwork to finalize the sale of one of its most significant real estate assets for $490 million, just days after announcing a plan to settle sex abuse claims. This move comes as the archdiocese aims to generate funds to compensate victims of sexual assault.
Background on the Sale and Its Purpose
Three days after announcing it would set up a $300 million fund to pay for a settlement it’s currently negotiating with 1,300 people who accused its priests and staff of sexual assault, the Archdiocese of New York took this significant step. A spokesperson for the archdiocese told amNewYork Law that the sale of its 455 Madison Ave. property to Lotte New York Palace, its long-term tenant, would “generate funds” to compensate victims, the majority of whom filed claims in 2020 when the state’s Child Victims Act opened up a temporary window extending the statute of limitations on sexual assault.
St. Patrick’s Cathedral in Midtown Manhattan, as viewed from the Lotte New York Palace hotel
Photo courtesy of Kristin Krall
Details of the Settlement and Sale
The archdiocese has been working with victim-survivors and their attorneys on a global settlement, a negotiated agreement to secure compensation for victim-survivors with the help of a neutral third-party mediator. Throughout, the goal has been to provide the maximum amount of compensation to the maximum number of victims, and the sale of this land is the latest effort to generate funds that can be used for that purpose. The archdiocese also sold its former headquarters at 1011 First Ave. for $103 million earlier this year to help fund payments related to sexual assault claims.
Use of Funds from the Sale
In addition to funding the global settlement for the 1,300 victims, the archdiocese is also in the process of repaying loans taken to fund previous sexual assault settlements under the Independent Reconciliation and Compensation Program, which was established in 2016. The church will split the funds from this sale between those loans and the new settlement fund.
Reaction to the Announcement
The archdiocese’s announcement that it was entering mediation with a group of attorneys representing 1,300 victims and was selling property, laying off staff and cutting its budget to create a $300 million fund for a yet-to-be-agreed-upon settlement was met with criticism from victim attorneys. They said the number was “insultingly low” and its announcement premature, as the two parties were just entering mediation and had not yet spoken about a dollar amount. Mallory Allen, a partner at Pfau Cochran Vertetis Amala, which represents 75 of the 1,300 accusers, said $300 million was nowhere near enough to compensate those with claims against the church. Jeff Anderson, an attorney representing 300 of the 1,300 victims, said he “doesn’t know” where the number came from.
Mediation Process
The two parties have just begun a 60-day, confidential mediation process to attempt to come to a global settlement for all 1,300 victims. If a satisfactory settlement isn’t reached, the victims can take their cases to trial.
Conclusion
The sale of the 455 Madison Ave. property for $490 million is a significant step by the Archdiocese of New York to generate funds for compensating victims of sexual assault. However, the amount allocated for the settlement has been criticized by victim attorneys as insufficient. The outcome of the mediation process will be crucial in determining the final settlement amount and the future of the claims against the archdiocese.
FAQs
- Q: How much is the Archdiocese of New York selling its 455 Madison Ave. property for?
A: $490 million. - Q: What is the purpose of the sale?
A: To generate funds to compensate victims of sexual assault. - Q: How many victims are involved in the settlement negotiations?
A: 1,300. - Q: What is the current allocated amount for the settlement?
A: $300 million, which has been criticized as insufficient by victim attorneys. - Q: What happens if a satisfactory settlement is not reached through mediation?
A: The victims can take their cases to trial.
