Published: June 2, 2011
Updated: 1:05 p.m.
Bidding to begin for Crystal Cathedral property
By DEEPA BHARATH
THE ORANGE COUNTY REGISTER
SANTA ANA – An open bidding process for potential buyers for the 30-
Marc Winthrop told Judge Robert Kwan that he would soon file a motion specifying the bidding procedures to help obtain the "highest and best bid for the church property."
Crystal Cathedral Ministries, founded by Robert H. Schuller and largely run by his family members, filed for Chapter 11 bankruptcy Oct. 18 following four years of financial turmoil, leadership changes and a familial disharmony.
Last week, the church filed a plan to come out of bankruptcy. The plan consisted of selling the cathedral and surrounding buildings to Greenlaw Partners LLC. and leasing back the cathedral to the ministry. After four years, the ministry would have the right to buy back the cathedral, parking lots and most other buildings for $30 million.
Greenlaw would build apartments on a portion of the church's property, according to the plan. Winthrop said the developer is contemplating calling the development Crystal Gardens. Greenlaw offered to buy the Family Life Center for $16 million and the cathedral and core church buildings for $30 million.
On Thursday, Kwan approved an extension for exclusivity requested by the church, which makes the church's plan the only one to proceed. The creditors committee has not submitted a plan so far.
Nanette Sanders, the attorney representing the creditors committee, said the committee is skeptical about the feasibility of the plan
"The (cathedral) is operating on substantial loss," she said.
According to an operating report filed for the month of April, the church lost $525,000 just that month.
The ministry is losing money as it stands, Sanders said. How, she asked, will they sustain a monthly lease payment in addition to paying their creditors?
"But the plan seems possible as opposed to feasible," he said noting that the plan would help pay off the secured creditors, the bank, as well the unsecured creditors who are owed about $7.5 million.
Winthrop said the bidding process will emphasize on the highest price and the best bid.
"For example, if a bid comes in for $100 million to use the property for a college, and another comes in at $95 million to use the cathedral as is, although $100 million is a higher bid, the second one is a better bid," he explained.
The best use, Winthrop said, is as the Crystal Cathedral campus.
Garden Grove officials have not yet been consulted about the possible use of the Crystal Cathedral campus for apartment units, said City Manager Matt Fertal.
"So far, they have not discussed anything with us or haven't even approached us," he said. "They should probably do that before they go ahead with the process."
Fertal said the property is currently zoned for use as a religious institution. Putting apartments there would require both General Plan and zoning amendments, he said.
According to papers filed in bankruptcy court, each apartment Greenlaw builds would knock $20,000 off the price the ministry pays to get back the cathedral and its core buildings. In an example cited in court papers, 400 apartments would reduce the repurchase price by $8 million.
Fertal said that would be "a lot of apartments to put on that property."
Winthrop said the initial bid process lacked marketing and was mostly word-
"The (cathedral) is prepared to market the entire property for sale," he said. "Our goal is to get the creditors paid and continue the ministry."
Kwan said he recognizes that the cathedral is still losing money and that "this cannot go on forever."
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