After what was described as 'a bruising two days' of heated discussion and debate, the Executive Council, meeting October 11-14 in Jackson Hole, Wyoming, voted to continue pursuing a joint project which would move the New York-based Episcopal Church Center from midtown Manhattan to the campus of the General Theological Seminary (GTS) in Chelsea Square.
The vote came despite a strong recommendation from the Standing Committee on Administration and Finance (A&F) and the management team of the Church Center that the project be abandoned because of differences with the GTS team, the budget circumstances of the national church, and the uncertainties of the U.S. economy.
The resolution, which passed by a vote of 27-6, authorizes 'the continuing pursuit of the DFMS/GTS project' as approved at the Executive Council meeting in Durham, New Hampshire in June. The council then voted to authorize the creation of a project development committee, whose first task would be to draft a binding agreement for action at its January meeting.
The committee includes council member Russ Palmore of the Diocese of Virginia; Dall Forsythe, chief administrative officer of the Diocese of New York; Andrew McMaster, partner, Deloitte & Touche LLP and member of the DFMS Audit Committee; DFMS treasurer Ralph O'Hara; and chief operating officer Pat Mordecai.
According to the Memorandum of Intent signed in February, neither DFMS nor GTS is legally bound to go forward with the project until both have signed a joint development agreement. That was originally not scheduled to happen until the end of the project's Phase II, but Mordecai says it now seems more appropriate to put such an agreement in place before hiring a project manager and architect.
The letter of agreement would bind both parties to the completion of the project, to an agreed timetable, and an 'exit strategy' should one of the parties decide not to go forward. It would also define under what conditions both parties might agree not to continue with the project--for example, if construction costs are much higher than the original estimates.
A different risk climate
In committee hearings and plenary sessions on Saturday and Sunday, council members heard concerns that the Domestic and Foreign Missionary Society (DFMS), the corporate name under which the Church Center operates, would be 'taking on a disproportionate amount of the risk' of the project compared to that of the seminary.
According to treasurer Ralph O'Hara, the uncertainties of the American economy, the trauma of last year's terrorist attacks and the threat of further wars, and the crisis in financial and other institutions have eroded confidence to the point where 'we're in a very different risk climate' from the period when the project first surfaced for consideration. According to O'Hara, the project would show no favorable cash flow for DFMS until 2016.
Mordecai told the council that a series of 'difficult conversations' with GTS had not resulted in a better balance between debt and risk for the DFMS side of the equation. Under the current plan, DFMS would assume 89 percent of the debt for the project and receive 83 percent of the asset value.
Analysis of the project by Staubach Financial Services showed that GTS would need to make substantial budget cuts in order to preserve its endowment income. DFMS would have to commit $70 million of its approximately $100 million unrestricted endowment as collateral for 30 years. The DFMS endowment has dropped approximately 30 percent since January 1, 2001.
Presiding Bishop Frank Griswold, who promised to support whatever decision the council made on the project, raised the question of 'what national church headquarters are going to look like in the future.' He asked whether a thirty-year commitment to 'bricks and mortar' would leave the church flexible enough to respond to changing management styles.
Called to the podium, GTS dean Ward Ewing called it 'an unfortunate process' and told the council he had a 'dramatically different understanding' of the conversations with the management team. 'This has been a bruising two days,' Ewing said.
Church of 'enormous abundance'
Council members reacted to the recommendation with concern about what some saw as its negative assumptions. 'We're forgetting that we are a church of enormous abundance,' remarked Judge Jim Bradberry of Southern Virginia. 'We can't afford to stop acting like Christians just because the market takes a dive and there are threats of war. Where's our courage?'
Others were concerned, however, that there had been a breakdown of the relationship between the DFMS and GTS teams which needed repair. That prompted the council to go into a closed session which lasted more than an hour on Sunday evening, and to agree to return for a vote the following morning. In a move unusual for the council, the vote was taken by written secret ballot.
Following the vote, Ewing thanked the council and expressed 'a strong conviction that this project was being guided by the Holy Spirit, however it turned out.' Later, he told reporters that while 'too many folks have been chewed up' for him to be exhilarated about the affirming vote, he was 'excited' that the project would go forward in a 'new beginning, with the Presiding Bishop and myself working more closely together.'
In a statement released later, Ewing said that he was 'very pleased by the action of the Executive Council and the support of the Presiding Bishop to move this project forward. I am excited by the promise of greater collaboration between the Dean of General Seminary and the Presiding Bishop.
'I believe we have taken a significant step what will provide a strong foundation for the work that must be done in the coming years,' he concluded.
'I am grateful that Executive Council engaged with care, candor, and in good spirit the next steps of the possible move of the Episcopal Church Center to the grounds of the General Theological Seminary,' said Griswold in a separate statement. 'I am confident that the Project Development Committee, as established by Council, will go about their work with due diligence as they prepare a binding agreement for Council deliberation in January, and I look forward to collaborating with Dean Ewing in support of their efforts.'