St. Charles Borromeo Seminary lost $2.6 million due to potential move and lawsuit's settlement

Years-long efforts by the Archdiocese of Philadelphia to decide on the future of St. Charles Borromeo Seminary hit the Wynnewood school's bottom line in the year ended June 30, according to financial statements released in mid-December.

St. Charles Borromeo recorded $2.2 million in expenses related both to a study of the feasibility of moving the seminary to a local Catholic university and to the settlement of a lawsuit over the proposed sale of a portion of the seminary's campus.

"With this matter settled, the seminary will now focus on continuing the process for the development of a sustainable model for the seminary, which would involve the sale of the Wynnewood campus and a potential affiliation with Neumann University," spokesman Ken Gavin said Wednesday.

In May, the archdiocese and Neumann announced their agreement to pursue a potential deal that would have the seminary, formally known at the Philadelphia Theological Seminary of St. Charles Borromeo, move to the university's campus or nearby. Those talks continue, a Neumann spokesman said.

The seminary, which Archbishop Charles J. Chaput once called "the heart of our church in Philadelphia," also recorded a $1.5 million write-down related to an earlier plan, announced in March 2013, to consolidate operations in older buildings on 30 acres at the back of the property at City and Lancaster Avenues.

Those expenses caused an overall $2.6 million loss in fiscal 2017, the seminary reported. Without them, the seminary's bottom line would have been $1.1 million in the black.

A lawsuit filed by Bill Burris, a developer of senior-care facilities, was settled in October. The lawsuit survived a bid for summary judgment in June.

Burris, part-owner of a senior-living firm in New Jersey, had eyed a portion of the seminary property for a mix of senior apartments, assisted-living units, and a nursing facility, potentially in partnership with Main Line Health, where people could get short-term medical care after surgery or an illness.

Main Line Health executives appeared to be on board with Burris, he said in legal filings, but in August 2015 the health system decided to make the purchase without Burris.

"I've got to believe we can craft a much more attractive offer … and then get the land and sit on it until we decide what we want to do. We can't lose this one," Lydia Hammer, Main Line Health's senior vice president of marketing and business development, wrote in an email in September 2015.

Burris filed his initial lawsuit against Main Line Health and St. Charles Borromeo in Montgomery County Court two years ago. In February 2016, he filed a second complaint in U.S. District Court for the Eastern District of Pennsylvania, where the settlement was reached.

Burris' lawyer, Paul R. Rosen of Spector Gadon & Rosen PC, did not respond to an emailed request for comment.

Main Line Health is still in talks on the possible purchase of the property, a spokeswoman said Wednesday. It had previously offered $28.5 million for the lower 40 acres, with a $15 million option on the seminary's 29-acre upper campus, court documents in Burris' lawsuit showed.

St. Charles Borromeo did not say how much it paid to settle the lawsuit, but its financial statement said it recorded a liability related to the settlement in "accounts payable and accrued expenses."

In fiscal 2017, that line of the seminary's cash-flow statement was $1.94 million, compared with  $23,695 the previous year and negative in earlier years.