The Catholic Archdiocese of New York has agreed to sell the land it currently owns beneath the historic Lotte New York Palace Hotel, New York’s first five-star hotel, for a staggering $490 million to help pay survivors of clergy sex abuse.
The agreement comes a week after Cardinal Timothy Dolan announced plans to sell real estate to pay child sex abuse survivors in the archdiocese.
Lotte Hotel & Resorts, the hotel arm of South Korea’s fifth-largest conglomerate Lotte Group, which has owned the New York Palace Hotel since 2015, announced the agreement in a statement on Tuesday.
“LOTTE Hotel & Resorts, which operates LOTTE New York Palace, has secured a foundation for stable long-term investment and operations by acquiring not only the hotel building but also the underlying land,” the statement said.
When it purchased the building in 2015 for $805 million from the New York City-based Northwood Investors, the company had to rent the land from the archdiocese through renewable 25-year leases.
“Considering long-term brand value enhancement and future assets, LOTTE has pursued the acquisition of the land, and the transaction was finalized after lengthy negotiations with the Archdiocese of New York,” the company said. “As land prices have risen significantly compared to 25 years ago, a substantial increase in lease fees was expected at the time of renewal, so this acquisition eliminated such uncertainty.”
In a letter to the faithful on Dec. 8, Cardinal Dolan announced that the archdiocese would seek to raise more than $300 million through the sale of “significant real estate assets” to pay more than 1,000 sex abuse survivors in a “global settlement” because their insurer, Chubb Insurance Companies, had refused to indemnify them from sexual misconduct claims.
“We are also working to finalize the sale of significant real estate assets, including the sale of the former archdiocesan headquarters on First Avenue in Manhattan earlier this year. When completed, we are hoping these transactions will net a total of more than $300 million — funds that can be set aside to provide compensation to survivors of sexual abuse,” Dolan said.
About $200 million of the proceeds from the land sale at 455 Madison Avenue in Manhattan will go towards the archdiocese’s Independent Reconciliation and Compensation Program started by Dolan. The remaining $290 million will go toward repaying loans the church took out for previous settlements under the IRCP and the Child Victims Act.
“As the weather gets colder and the daylight grows shorter, the coming of Our Savior brings hope and light into a world too often plunged into darkness. This darkness has cast a shadow even on our Church,” Dolan said in his statement.
“As we have repeatedly acknowledged, the sexual abuse of minors long ago has brought shame upon our Church. I once again ask forgiveness for the failing of those who betrayed the trust placed in them by failing to provide for the safety of our young people.”
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