ARTICLES

Unfair or Very Generous?

Diocese Land Sale Provokes Protest

BY BARTHOLOMEW JAMES

Is the Sacramento diocese sacrificing senior citizens to pay off sexual abuse claims? Though the claim has been made in the local press, the reality may be different.

On September 6, the Citrus Heights city council approved a $100,000 loan for the residents of the city's Lakeview Village mobile home park to enable them to submit an offer to purchase the property from the diocese of Sacramento. The diocese has had to sell the real estate in the Sacramento suburb to help pay a portion of its recently incurred multi-million dollar debt. In June, hours before the first trial was scheduled to begin, the diocese agreed to settle all of its alleged clergy sexual abuse cases -- stemming from incidents that were decades old -- in one lump sum. The diocese agreed to pay $35 million to resolve all the cases at once, compensating each of the 33 alleged victims in varying amounts ranging from $400,000 to $4.2 million each.

In a letter to the faithful, Bishop William Weigand outlined the ramifications of the agreement and what it would cost the diocese, including the fact that significantly less than 50 percent of the settlement costs would be paid by insurance. Weigand said that the diocese would raise its share of the settlement funds by reducing operating expenses by 15 percent, through loans, and from the sale of diocesan assets. Three Catholic religious orders will contribute to the settlement. Diocese spokesman Kevin Eckery explained that the diocese would tap reserve funds and sell off securities but would not sell any property used in ministry. "They're not selling existing or future church or school sites," said Eckery. "It was very important not to do anything that would hinder the core ministry of the church."

Adherence to those criteria left the diocese with severely limited options and resulted in the posting of a "For Sale" sign on its prime income real estate investment, the Lakeview Village mobile home park. Calling the property a mobile home park is, however, misleading. Adjacent to a golf course, the 130-acre, seniors-only facility resembles a Sun City-style retirement resort and features a lake with fountains, a massive manicured greenbelt that weaves through the property, community hall, pool, and numerous other amenities. In fact, the 531 dwellings are all manufactured housing with foundations, and many have two car garages -- there are no elevated, above-ground trailers with skirting as in a traditional mobile home park.

The residences sell from $200,000 to over $300,000 each, depending on size and condition, and the monthly space rent is about $400, which includes water, sewer, and garbage. The property, which the diocese owns free and clear, is estimated to be worth roughly $35 million. Eighty percent of the sale proceeds will go to the diocese, while 20 percent will go to a priest retirement fund that had invested in the property, according to Eckery. The diocese said it is accepting offers for the park and will select a buyer with the best, not necessarily the highest, offer. "The best offer may be the one that has either better financing, or takes care of the residents, or nets more to the diocese. We're not holding ourselves to just the highest cash offer," Eckery said.

The upscale character of Lakeview Village is worth noting because the sale of the property has generated considerable controversy and extensive media coverage by the Sacramento Bee. The newspaper has published five articles in one month about the sale, generally portraying the park's nearly 1,000 senior citizen residents as victims of the diocese. The Bee's articles have in turn generated several letters to the paper, some from park residents, which it dutifully published.

"For decades, the ostrich-like behavior of the Catholic Church protected pedophile priests as they damaged the lives of countless young people. Now, to pay for their sins, the Sacramento Diocese is going after the other most vulnerable segment of our society -- the elderly," wrote Linda Evans. "We residents are being asked to bail the church out. This is unfair, and the church should be ashamed to even consider such an action."

"These are senior residents, many in poor health, and this could put their health in further jeopardy," said Norma Laudenslager in her letter. Another writer, John Ayres, suggested that the Vatican be held responsible. "Is the Vatican not one of the world's wealthiest states? It, and every one of its leaders and the guilty priests are the ones who should be paying, not these innocent seniors and the local parishioners," he wrote.

The Lakeview Village residents are primarily concerned that a new park owner might raise their space rents or, in a worst case scenario, evict them and develop the land into condomin iums or a single-family home subdivision. But their anxiety may be exaggerated. The city of Citrus Heights has publicly expressed its intention to maintain the property's current use and has indicated it would, if necessary, pass an ordinance that would make conversion of the property to a different use less financially attractive, if not unfeasible. Since the diocese has provided the residents with slightly below market rents, it is possible that space rents could increase under a new owner. "The church has elected to keep the rents there very reasonable over a period of time, given the quality of that park, which is by far our best park. It is clearly a five-star park, and so the church has been very generous in that respect," said Citrus Heights community enhancement manager Jim Lynch.

The diocese has tried to alleviate resident fears by helping them explore other options, such as purchasing the park themselves, a relatively common process that has been used with other mobile home parks in the state. In mid-August, the diocese paid to have attorney L. Sue Loftin, a specialist in resident park purchase arrangements, speak to the residents at the Lakeview Village community hall.

"She was very helpful in exploring some initial concepts with the residents so that they would know various alternatives," said Lynch. Since the city wants the property to remain a seniors' park, they have agreed to help the residents purchase the property by providing them a loan for the deposit required to submit an offer and then assist with other possible financing scenarios to accommodate the full purchase. "The city is on the side of the residents buying it, the church has indicated a preference to try and make that work and so we're very hopeful," said Lynch. As it now stands, the residents have hired a consultant to help them with the logistics of purchasing the park, assuming their offer is accepted by the diocese. After the sale, the city will provide further assistance to low-income residents affected by increased space rent, according to Citrus Heights vice mayor Jeannie Bruins. Bruins said the city has had very good communication with the diocese. "I suspect that the diocese realizes that this is a very sensitive situation; certainly this is not something they wouldn't do if they didn't have to," she said.

But despite the diocese's efforts to work with the residents and the city, Sacramento Bee readers may have gotten an inaccurate or incomplete impression of the progress and potential impact of the property transfer. "Diocese sale hits seniors hardest" was the headline of the Bee's latest story on the park sale, published September 4, just two days before the city council approved the first loan for the residents' purchase offer. The Bee asserted that one married couple at the park who needed to sell their house so they could move into an assisted living center were unable to do so because of uncertainty about the future of the park. The Bee said that Lakeview Village resident Wayne Herring and his wife were in "limbo" because, since the diocese announced the sale, "most potential buyers stopped coming."

In addition, Janice Record, a real estate agent and resident of the park was doubly impacted, according to the Bee. Record was suffering personal hardship because not only was she a resident of the park, but she primarily made her living listing and selling Lakeview Village homes. Record told the Bee that people with homes she had listed were "getting a little panicked, because they have already made plans to go elsewhere." She also had two couples who wanted to move because of health reasons, "and I have not been able to sell their home," she said. Record herself faced an "uncertain future and depleted personal resources" due to the problem, according to the Bee. "My income basically stops," she told the paper.

While there may be a handful of residents at Lakeview Village that may be harmed by the diocese's need to sell the park, it is unlikely that Record is one of them -- despite the Bee's account.

I had an opportunity to ask Record about her personal adversity after she gave me a tour of Lakeview Village. As it turns out, Record has been a member of the "Masters Club" in her real estate office for the past two years (and is on track to make the club again this year). To achieve that status, she sold over $6 million worth of property each year. Representing either the buyer or seller on each sale, she made a three-percent commission, although sometimes "I double-end them," she said. In a double-ended transaction, she makes two commissions because she represents the same client when he sells his existing house and then buys a different one. In such a transaction, instead of being charged the full six percent by the real estate agent, the client gets a discounted rate of five percent. "I give them a break," she explained. She said she double-ends about 25 percent of her transactions. Taking into account her minimum total sales volume of $6 million, and the number of double-ended transactions, the math indicates that Record has generated over $210,000 in commission income in each of the past two years -- a portion of which goes to her broker. She concedes that she has made over $100,000 each of the last two years but won't give specifics beyond that. When she realized where my questions were headed, she emphasized that, in her ten years in the real estate business, there were times when she was barely able to make ends meet. "I've got to tell you I had years where I was lucky if I made $40,000 or $45,000," she said.

I asked Record about her Lakeview Village clients who were allegedly having problems selling their houses because of the pending sale of the park. Since it has been widely reported that Sacramento area home resales have slowed dramatically, I asked if that could be part of the problem. She agreed it could. "It's now a buyers' market, whereas the last couple of years it has been basically a sellers' market, and things have kind of leveled off, so we have a lot more inventory in here than we did a year ago," she said.

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