Crystal Cathedral Put Up for Sale to End Debt Woes

Having been a member of this church for years and having been part of the cast of the Glory of Easter and Glory of Christmas pageants, as a family for approximately 15-years, as well as knowing the Schullers, at least somewhat, personally, it breaks my heart to hear this news of what could be the final stroke for that ministry. Having moved out of the area, I have followed the progress of this decline through the news through some Glory friends who are still members (see four articles immediately below). I had hoped through prayer, financial reorganization and a new found focus that this would have ended more positively!

We can only hope that the Crystal Cathedral’s plan to sell and lease back the landmark Cathedral, after having already sold “the Ranch”, which had been gifted to them, as well as other assets and buildings will work and give the family and management the opportunity to start again and realize that perhaps their financial concept was a little off the mark.

Dr. Schuller Sr always said that he felt that he received guidance from God and that this campus and ministry was not his, but the Lord’s, giving people a beautiful, inspiring and safe place to worship and find refuge. So, in the end it is God’s Cathedral and therefore it is in God’s hands! M~

Rifts, debt tear at Crystal Cathedral

TEARFUL SCHULLER PLEADS FOR DOLLARS FOR CRYSTAL CATHEDRAL

Rev. Schuller Retires as Lead Pastor, Takes New Crystal Cathedral Post

Pianist Roger Williams: Schuller kids spoiled Crystal Cathedral

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The Crystal Cathedral is being put on the market as the church seeks a way out of its crippling debt.

The Orange County church is hoping the sale of its imposing glass building will generate enough revenue to save it from Chapter 11 bankruptcy and make good with some 550 creditors.

It has been looking for an exit strategy from its financial woes ever since filing for Chapter 11 bankruptcy protection last October.

The reorganization plan includes the sale of the 40-acre campus to a real estate group with a guaranteed option of leasing it back for 15 years.

After four years, the church would have the option of buying back the Crystal Cathedral, the 13-story Tower of Hope, the welcome center and the cemetery.

Not part of the buy-back deal, however, is the Family Life Center, the campus’s four-story office building that is already up for sale.

Creditors and vendors are still waiting for a combined total of $7.5 million in overdue payments from the church, which it has promised to re-pay in the next 42 months.

No details have been given about potential buyers or the sale price. The Southern California megachurch, whose founder is Robert H. Schuller, is set to be considered at a June 1 hearing.

Church spokesman John Charles told the LA Times: “It’s great news. It gives us the opportunity to pay everybody off and start fresh.”

The Crystal Cathedral will still continue its ministry, which includes worship services, community outreach programs and the weekly Hour of Power broadcast, uninterrupted.

Sheila Schuller Coleman, senior pastor and daughter of the founder, expressed optimism in the new plan, noting that paying back the creditors has been a top priority and that this is the chance to finally do so.

“We are pleased that we are able to honor the debt that we have incurred and to honor the creditors who are due their payment,” she said in a statement.

“The Crystal Cathedral Ministries would like to thank our church members and friends around the world who have given from their hearts to help rebuild a solid foundation from which we can continue our ministry and launch the new vision for the Crystal Cathedral Ministries.”

The new vision includes stepping up community outreach efforts such as feeding the hungry and providing resources for job searches.

Crystal Cathedral, California’s Famous Multimillion-Dollar Megachurch, Is Up For Sale

Crystal Cathedral

New York — Crystal Cathedral, one of the nation’s first modern megachurches and one that had come to define the movement’s opulent strain with its towering glass structures, elaborate stage productions and far-reaching “Hour of Power” television ministry, is up for sale.

A spokesman for the Southern California church said the sale would allow the church to have “continued ministry while immediately eliminating both its mortgage entirely and the majority of its vendor debt.”

The struggling church filed for bankruptcy last year and has been fraught with conflict over church leadership and botched finances since its founder the Rev. Robert H. Schuller stepped down in 2006.

The financial reorganization plan, which could be submitted to court as early as Friday, would put the 40-acre church campus up for sale to an unnamed real estate investment group, in order to pay off a $36-million mortgage and pay back hundreds of creditors over the next 3-and-a-half years.

The church’s board would have the option of leasing back the property for 15 years. After four years, the church would also have the option to buy back its most prized buildings, such as its $18 million 10,664-window glass sanctuary that was designed by famed architect Philip Johnson, a 13-story structure called the “Tower of Hope,” its welcome center and its cemetery.

“Under this plan, the ministry of the Crystal Cathedral will continue its local worship services and community outreach programs,” church spokesman John Charles said in a statement.

Charles, who did not return a phone call and an email requesting comments, did not say in the statement how much money church leaders are aiming to sell the property for. It is worth at least tens of millions of dollars, according to estimates.

The sale, which would need to be approved at a June 1 bankruptcy court hearing, is the latest in a troubled history for a church that was once seen as the shining example of megachurch success in the United States.

Schuller, a minister in the Reformed Church of America, founded the church in 1955 in a converted drive-in movie theater in Garden Grove, a suburb south of Los Angeles. He was quickly able to grow membership with his popular sermons and upbeat, positive brand of Christianity. He largely stayed away from political and polarizing issues.

The church moved to a formal space in 1961 and in 1970, at the encouragement of the Rev. Billy Graham, Schuller began broadcasting his sermons as the “Hour of Power” on television. He quickly became a national figure, pulling in donations from millions of viewers as membership skyrocketed. By 1980, the church had opened its iconic multimillion-dollar glass worship hall, and it continued to finance elaborate construction, such as a 236-foot tall bell tower and spire a decade later. In the 1990s, membership topped 10,000.

But in more recent years, the church has run into trouble. After Schuller, 84, stepped down five years ago, he put his son, the Rev. Robert A. Schuller, in charge. The younger Schuller, an experienced 54-year-old preacher, used a more corporate management style and struck a relatively contemporary tone during worship. He inherited debt from various construction projects, and under his watch, membership dwindled to around 1,000.

Randall Balmer, a professor of American religious history at Columbia University and Barnard College, says troubles at Crystal Cathedral point to the larger challenges megachurches, which soared in popularity from the 1970s to the 1990s, now face.

“On one hand, it’s a leadership issue. You can’t simply pass along charismatic authority from one generation to the next. It never works,” Balmer said. “And there’s a moving away from big megachurches, a moving away from the big Billy Graham stadium crusades of mass appeal to more targeted approaches. You have all this niche marketing within Christian evangelism. I mean, you have Christian evangelical tattoos.”

To be sure, there are still dozens of popular and growing megachurches in the U.S, such as Rick Warren’s Saddleback Church, also in Southern California, and Joel Osteen’s Lakewood Church in Houston, Texas. Lakewood, with 40,000 members, is the biggest church in the country.

Scott Thumma, a professor at Hartford Seminary who studies megachurches, said troubles at Crystal Cathedral don’t necessarily “foreshadow doom and gloom for the megachurch phenomenon. Schuller and the Crystal Cathedral have always been outliers,” Thumma said, though “his ideas and innovations propelled several prominent mega-pastors.”

“This announcement ought to teach astute large church leadership teams [to] not to over-build, especially monuments to architectural and ministerial hubris … to make sure to have a reasonable plan of succession, and above all, to engage in wise fiscal policies,” Thumma added.

At Crystal Cathedral, the younger Schuller was removed within two years of his appointment as senior pastor after his father said on the “Hour of Power” that the two men had “a lack of shared vision.” Today, the elder Schuller’s daughter, Sheila Schuller Coleman, is senior pastor.

Under Coleman, the church has gone through layoffs and cancelled a popular Easter production. It also faced scrutiny after October bankruptcy filings showed that the church owned $50 million to investors and vendors, such as an organ player who is still waiting for a $1,500 payment. Creditors also objected to what they saw as over-the-top payouts and benefits to church employees and members of the Schuller family.

In March, Coleman also came under fire from some of her congregation for requesting that church choir members sign pledges that affirm the “model Biblical view” of “sexual intimacy is intended by God to only be within the bonds of marriage, between one man and one woman.” Members said the request was anti-gay. It was also a step away from the style of her father, who later said he didn’t approve of the pledge.

On Friday, a church statement said that the sale will allow Coleman to achieve a “bold new vision” to be a “hands-on outreach of hope for both the local and global community.”

“We are thankful to the vendors for their patience and we are so sorry for any pain that they have incurred,” Coleman said in the statement. “To pay them back 100% has always been a top priority and we are grateful to God for providing the resources to be able to do just that.”

Crystal Cathedral plan: Lease its way out of debt

In a bid to rescue itself from bankruptcy, the Crystal Cathedral plans to sell and lease back the landmark to an Irvine real estate partnership.

Crystal Cathedral Ministries filed a reorganization plan late Friday, seven months after it filed for protection from its creditors under Chapter 11 of the federal bankruptcy law.

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Greenlaw Partners would pay $46 million for the cathedral and surrounding buildings, leasing back the cathedral to the ministry. Most of the cash would go to creditors.

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 get the right to build apartments on some of the 30-acre property.

The plan is subject to approval by the cathedrals’ creditors.

They’ve been skeptical. Just days ago, a financial consultant to the creditors said in a statement filed in U.S. Bankruptcy Court that if the ministry hadn’t been protected by bankruptcy rules, it would have burned through $2 million in cash in the past six months.

The key to the plan is real estate development. Greenlaw wants to build apartments – potentially hundreds of apartments – on what are now parking lots, low-slung buildings and lawns near the corner of Lewis Street and Dawn Avenue.

The deal is critical to the ministry’s precarious financial health. 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.

The ministry appears ready to give up the Family Life Center, the four-story home of the “Hour of Power” on Chapman Avenue. While its deal with Greenlaw allows it to lease the cathedral and other core church buildings from Greenlaw for 15 years, the lease on the Family Life Center would run only two years – and Greenlaw could terminate that lease early if it finds new tenants.

Greenlaw plans to buy the Family Life Center for $16 million and the cathedral and core church buildings for $30 million.

The family of founding Rev. Robert H. Schuller would give up some of its financial power over the cathedral to an independent board. Although the elder Schuller and his wife, Arvella, would sit on that board, an executive board controlled by outsiders would set the ministry’s budget and would also appoint the chief financial officer.

In addition, the bankruptcy plan limits the salary of the ministry’s chief executive officer, Schuller’s daughter, Sheila Schuller Coleman, to $69,525 a year.

The church owes about $7.5 million to unsecured creditors including many longtime vendors who provided services for its annual Christmas and Easter pageants. Church administrators say the cathedral will continue its local worship services, community outreach programs and its weekly “Hour of Power” broadcasts. Also, the plan will immediately eliminate both the church’s mortgage and the majority of its vendor debt, they say. Any remaining vendor debt will be repaid over the next 42 months, officials say.

The Crystal Cathedral over the past three years has been torn apart by a family feud that saw the exit of the founder’s son, Robert A. Schuller. In the year leading up to its bankruptcy filing Oct. 18, the church sold many of its assets, cut about 150 of its staff members and slashed air time by 50 percent. Its congregation has shrunk to fewer than 5,000.

The cathedral’s court filings’ blame its financial troubles partly on “unsettled leadership” but mostly on the recession.

However, a financial statement filed Friday shows that the ministry’s losses predate the recession. The ministry lost $6.4 million in 2006, a prosperous year for most Orange County businesses and nonprofits, an additional $7 million in 2007, $11.5 million in 2008 and $8.6 million in 2009. It managed a $141,000 surplus in 2010.

By then, however, donations were falling faster than the church could cut expenses. Donations fell by 24 percent in 2009.

Court filing also showed that during this time, a total of $832,940 in housing allowances were handed out to the families of all five children of Robert H. Schuller and a few top executives. More than $2 million was paid to 23 insiders, mostly family members of the Schullers, over the 12 months leading to the bankruptcy filing.

The church owes money to about 550 creditors. Among the unsecured creditors are vendors who provided their services to the megachurch’s popular “Glory of Christmas” and “Glory of Easter” pageants – both of which have been suspended as a result of the church’s financial troubles. The cathedral lost $16.8 million over three years on total revenues of $70.8 million.

The mortgage includes the cost of two more buildings on campus – the Family Life Center and Welcoming Center – that were added in 1990 and 2003, respectively. The mortgage also covers the cost of other refurbishments on campus and a parking lot expansion, as well as funds to acquire neighboring properties.

h/t to the Christian Post, the Huffington Post and the OC Register – Contact the Register writer: 714-796-7909 or dbharath@ocregister.com