Hello St. Paul’s,
I’ve been hearing a few questions about the masterplan, the proceeds of the 525 Olive deal, and the potential capital campaign, so I think it’s time for a refresher on the big picture of our cathedral resources.
When I arrived here in early 2014, Chapter was engaged in a major project to reorganize the cathedral finances. Thanks to the hard work and skill of several people, within a couple of years we had arrived at a position of knowing what we had and what we were spending. We came to terms with the fact that we were spending more than we had available, and we made an effort to “right-size” our budget. This meant that we moved forward with a smaller staff, eliminating the administrative assistant position, the stewardship and development lay position, and a clergy position that had been partially underwritten by the Bishop’s office. We were ultimately able to achieve a balanced budget and a clean audit, and we’ve maintained both in the years since.
As you know, almost all of our operating income comes from a combination of your pledges, income from the cathedral’s invested funds, and income from the invested funds of the LLC which owns our space in 525 Olive. Before 2019, when construction began, the LLC had the benefit of rent revenue from Parc Chateau to the tune of some $100,000: this was passed on to support the Cathedral’s operating budget. But since Parc Chateau was demolished we have not had that income, and the LLC has generously dipped more deeply into its funds to cover the gap.
The sale of the land to Greystar brought additional capital funds to the LLC. Some of those proceeds have been used to build out our office and program space in 525 Olive. The Grand Opening Week fundraiser helped defray some of the cost of furnishings and I am grateful for that. The remainder of the sale capital generates investment income, which is passed on for cathedral operating expenses; but we now have the added expense of running the new space and paying our share of the Common Area Maintenance fees and other costs of belonging to the 525 Olive Association – equivalent to an HOA. We are negotiating a lease with a commercial tenant for the Fifth Avenue space, but it will be at least another year before we start to see any rent revenue from that tenant.
You’ve recently heard from our treasurer Betsey about the multiple pressures on our 2023 operating budget, including the loss of a very significant pledge and the sharply increased cost of living, so I’m not going into details about that here. My purpose now is to address the question of why we are engaged in a feasibility study around a possibly future capital project. The question has been raised: “Why can’t we use the money from the sale to build out the masterplan?”
Once the dust settles, I believe we will be able to create a sustainable operating budget that supports the ministry we are currently offering. But that sustainability doesn’t allow for the use of capital funds to build something new, such as a music center or an outreach center. Any invasion of our invested funds will reduce the amount we receive as operating income. So that money isn’t available for capital projects.
We are a living church, and God calls us to dream big and seek ways to grow in ministry. In my time at St. Paul’s we have seen a lot of changes, all of them intended to better position us to be a community resource, a 21st century center of faith and community. Now that we have finally completed the 20-year 525 Olive project, God calls us to create new dreams and continue to stretch ourselves. The dream of God for humanity is that we will live in a world where generosity and love rule, where all people will know peace and have enough to live safely. God’s dream is an audacious dream, and our dreams should likewise be audacious. We should not be afraid to cast a bold vision: if we don’t reach beyond our comfort zone, we will never know what we can do with God’s help. We must not let our fear of falling short prevent us from testing our limits.
The masterplan that we have created over the last year or so is a bold vision, making the best possible use of underused spaces on our campus to pursue our mission and ministry in three dimensions: a center for children and adults to make music together; a space where our ministry with our unsheltered neighbors can grow; a welcoming center for all kinds of community events filled with light and love. Perhaps we will never achieve completion of this plan, but it provides a map for us as we move forward, guiding us towards significant future ministry. The feasibility study currently underway will provide data for Chapter to determine whether we can tackle any or all of this plan. Perhaps this isn’t the right time. Perhaps we don’t have the capacity among us to fund such an ambitious vision. But we will still have the plan, and I hope it will inspire us and those who come after us to dream big and continue moving forward, to love Christ, serve others, and welcome all in the years ahead.
See you on Sunday.
Your sister in Christ,