Bankruptcy judge approves chancery sale, new archdiocesan headquarters’ lease

| April 8, 2016 | 0 Comments

A bankruptcy court judge approved April 7 both the sale of the Archdiocese of St. Paul and Minneapolis’ chancery and adjoining archbishop’s residence, and the lease for the archdiocese’s new headquarters in St. Paul’s Dayton’s Bluff neighborhood.

The archdiocese received a $2.75 million stalking-horse bid for the chancery property from United Properties in November, and then, following a court-approved process, opened the bidding process through March 18 to maximize the sale price. The deadline was then extended to include two late offers. Three parties bid on the property in an April 4 auction; United Properties declined to increase its November offer. A limited liability company, 1777 Bunker Lake Blvd., placed the highest and best bid of $3,275,000.

“We believe the auction was successful,” said attorney Richard Anderson of Briggs and Morgan, who represents the archdiocese, during the April 7 hearing.

Judge Robert Kressel approved the chancery’s sale to 1777 Bunker Lake Blvd. at the court hearing. Under the terms of the sale, the archdiocese can continue to use the building through November.

The entity 1777 Bunker Lake Blvd. is owned by Donald Regan, founder and chairman of Maplewood-based Premier Banks, who is well known for philanthropy to civic and Catholic causes. Katie Regan Nath, Regan’s daughter and Premier Banks’ vice president for legal counsel, said in a April 7 statement that Regan “indicated that he is more sad and sentimental than smart when it comes to this investment.”

“He was fearful someone less friendly to the archdiocese would bid on and acquire the site,” she said.

Regan is a parishioner of St. Peter in North St. Paul. According to the statement, he has no immediate plans for the building and is exploring options and taking suggestions. The archdiocese will retain use of the property until Nov. 30.

The chancery and archbishop’s residence at 226 and 230 Summit Ave., St. Paul, across from the Cathedral of St. Paul, is the third of four buildings the archdiocese plans to sell as part of its Reorganization under Chapter 11 of the U.S. Bankruptcy Code. It sold the Ambrose Hayden Center, formerly the Cathedral school, to the Minnesota Historical Society for $4.5 million in November, and a residence near Northfield for $365,000 in February. Archdiocesan offices at 244 Dayton Ave., behind the Cathedral, remain for sale.

New headquarters confirmed

The judge also approved the archdiocese’s lease of 777 Forest Ave. in St. Paul, the former headquarters of the 3M Company.

Anderson said the building was well suited for the archdiocese’s current staff and would cost between $700,000-770,000 a year, less than the archdiocese’s current cost of $840,000 per year on the chancery properties it owns, plus anticipated costs of deferred maintenance. He said he expects the Dayton’s Bluff property to be ready for occupancy in October, with relocation costs around $450,000.

“It’s our belief that the archdiocese will be plenty ahead under the replacement lease,” Anderson said.

An attorney for the archdiocese’s creditors did not oppose the motion for the chancery sale or the lease.

The archdiocese entered Chapter 11 Reorganization in January 2015 in response to mounting claims of child sex abuse by clergy members. It plans to file a plan for reorganization with the court by the end of May.

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