Archdiocese Sells Hotel Property for $490M as Rumors Swirl Dolan’s Stepping Down Soon

The Catholic Archdiocese of New York said it is selling the land that it owns under the Lotte New York Palace Hotel to the hotel owner for $490 million and will use the proceeds to finance a fund to pay victims of past sexual abuse by clergy and lay people associated with the archdiocese.

The New York Palace, owned by a Korean hospitality conglomerate, is one of the top rated hotels in the city. The Villard mansions at the base of the five star hotel were built originally in 1852.

A spokesperson for the the Archdiocese confirmed that it is selling the pricey real estate at 455 Madison Ave. to “our long-term tenant.”

The news also comes as rumors swirl that Pope Leo will officially accept the resignation of Cardinal Timothy Dolan, which he had submitted to Leo’s predecessor Pope Francis in Feb. upon reaching the church’s mandatory retirement age of 75. Settling the claims from the decades old sex abuse scandal could be a final housecleaning so a new prelate can assume office without that cloud still hanging over the archdiocese.

Before the sale can be finalized, it has to be approved by the New York State Attorney General since the archdiocese is a tax exempt religious organization and any such sale to a profit making entity must get prior approval from the state.

The development comes only days after Cardinal Timothy Dolan said the Archdiocese was setting up a fund to raise $300 million to pay approximately 1,300 claimants of past sexual abuse, stretching back decades. The archdiocese previously said it was selling its 20 story headquarters building at 1011 First Ave. at 56th St. to the developer Vanbarton Group, which plans to add six more stories to the tower and convert the office space into residential apartments. But that sale was only going to fetch about $103 million, leaving the Archdiocese short of its avowed aim to raise $300 million.

With the sale of the property at 455 Madison Ave, sources said the Archdiocese will have fully funded its goal of raising $300 million, setting aside some $200 million to go into the newly formed fund while another $290 million is expected to go to retire loans that the Archdiocese took out to settle past settlement that it made under the Reconciliation and Compensation package established in 2016.

How much the Archdiocese will ultimately have to pay to settle the nearly 1,300 claims still pending is not clear, however.

After meeting with lawyers for victims last month, both sides agreed to appoint retired California Judge Daniel Buckley as a neutral moderator to negotiate settlements. He previously supervised a settlement between the Archdiocese of Los Angeles and victims in which both sides agreed to settle for $880 million.

The sale of the land beneath 455 Madison is the most significant real estate asset owned by the church. The archdiocese also has quite a number of shuttered churches, many of which are in Manhattan.

One of the the shut down churchers was in Chelsea where the former St. Columba Church was housed at 335 and 345 W. 25th St. The site was sold to Timber Equities for $48.25 million earlier this year, which plans to build two 14 story residential towers on the former church grounds.

St. Elizabeth of Hungary at 211 E. 83rd St between Second and Third Ave was sold to a real estate developer Avenu, which recently began demolition work on the building with the plan to turn it into a luxury residential building. The developer, paid $11.8 million for the property.

That building traced its roots back to 1982 when it was a Lutheran church. It was sold to the Archdiocese in 1917 and renamed St. Elizabeth of Hungary as Hungarian and Slovak immigrants began moving to Yorkville from their former tenements on the Lower East Side. For awhile it was the Archdiocese home for deaf congregants with a pastor who was proficient in American sign language. But it has languished since the Archdiocese shut down the church and merged the parish into nearby St. Monica’s at 411 E. 79th St. back in 2016. Efforts by local preservationists to have the St. Elizabeth of Hungary site landmarked were to no avail.

The fate of St. Elizabeth of Hungary has raised concern among preservationist groups that other churches facing dwindling congregations could be sold off as well.

Currently, preservationishts are pushing for landmark status for the church of Most Holy Redeemer in the East Village and Our Lady of Guadaulupe in the West Village. Neither of the churches are for sale.

The Archdiocese sources did aknowledge that it is talks to sell off unused property in upstate New York though these are properties are not expected to generate significant revenue for the Archdiocese. And as with the sale of 455 Madison, any sale by a tax exempt not-for-profit has to first clear must with the New York State Attorney General.