Archdiocese Sells Hotel Property for $490 Million Will Fund Sex Abuse Fund

The Catholic Archdiocese of New York said it is selling the land that it owns under the Lotte New York Palace Hotel to the hotel owner for $490 million and will use the proceeds to finance a fund to pay victims of past sexual abuse by clergy and lay people associated with the archdiocese.

The New York Palace, owned by a Korean hospitality conglomerate, is one of the top rated hotels in the city. The Villard mansions at the base of the five star hotel were built originally in 1852.

A spokesperson for the the Archdiocese confirmed that it is selling the pricey real estate at 455 Madison Ave. to “our long-term tenant.”

The news comes as Pope Leo XIV ended days of speculation and on Dec. 18 appointed Bishop Ronald Hicks as Archbishop of New York to replace Cardinal Timothy Dolan, who had served as the spircutual leader since 2009 and who had submitted a letter or resignation in Feb. to then Pope Francis when he reached the mandatory retirement age of 75. The resignation letter was accepted by Pope Leo this week.

Many saw the settlement of the sex abuse cases as a way to give Dolan’s successor a clean slate on a crisis that has plagued the church for over a decade.

The sale comes only days after Cardinal Dolan said the Archdiocese was setting up a fund to raise $300 million to pay approximately 1,300 claimants of past sexual abuse, stretching back decades. The archdiocese previously said it was selling its 20 story headquarters building at 1011 First Ave. at 56th St. to the developer Vanbarton Group, which plans to add six more stories to the tower and convert the office space into residential apartments. But that sale was only going to fetch about $103 million, leaving the Archdiocese short of its avowed aim to raise $300 million.

With the sale of the property at 455 Madison Ave, sources said the Archdiocese will have fully funded its goal of raising $300 million, setting aside some $200 million to go into the newly formed fund while another $290 million is expected to go to retire loans that the Archdiocese took out to settle past claims that it made under the Reconciliation and Compensation program established in 2016.

How much the Archdiocese will ultimately have to pay to settle the nearly 1,300 claims still pending is not clear, however.

After meeting with lawyers for victims last month, both sides agreed to appoint retired California Judge Daniel Buckley as a neutral moderator to negotiate settlements. He previously supervised a settlement between the Archdiocese of Los Angeles and victims in which both sides agreed to settle for $880 million.

The sale of the land beneath 455 Madison is the most significant real estate asset owned by the church. The archdiocese also has quite a number of shuttered churches, many of which are in Manhattan. Earlier this year, the Archdioces sold the shuttered St. Columba parich as 335 and 345 W. 25th St. to Timber Equities for $48.5 million. The developer unveiled plans to erect two 14-story residential towers on the former church grounds.

Uptown, demoliition work is underway at the former St. Elizabeth of Hungary at 211 E. 83rd St between Second and Third Ave which was was sold for $11.8 million earlier this year to a real estate developer, Avenu. The developer plans to erect a luxury seven story condo on the site. That building traced its roots back to 1982 when it was a Lutheran church. It was sold to the Archdiocese in 1917 and renamed St. Elizabeth of Hungary as Hungarian and Slovak immigrants began moving to Yorkville from their former tenements on the Lower East Side. For awhile it was the Archdiocese home for deaf congregants with a pastor who was proficient in American sign language. But the Archdiocese shut down the church and merged the parish into nearby St. Monica’s at 411 E. 79th St. back in 2016. Efforts by local preservationists to have the St. Elizabeth of Hungary site landmarked were to no avail.