Christian Science church may sell, lease properties Would consolidate underused spaces

Boston Globe/October 13, 2005
By Andrea Estes and Thomas C. Palmer Jr.

The First Church of Christ, Scientist, attempting to streamline its operations amid recent financial problems, is considering leasing or selling its underutilized properties in Boston, a top city official said yesterday.

Mark Maloney, director of the Boston Redevelopment Authority, told the Globe that church officials informed BRA staff members this week that they were in the preliminary stages of developing a plan that could involve sale or lease of some of the church's vast holdings in the Fenway.

''They are having internal conversations about the fact that they have some empty space they should think about consolidating," said Maloney, who described some of the property as underutilized.

He added that church officials assured BRA officials that the Christian Science church would remain in Boston, its headquarters for more than a century. ''They are going to be located here forever," Maloney said.

Last week, the church distributed a memo to employees announcing that a top financial official, Harley Gates, was being reassigned to oversee the church's real estate holdings. The memo described the change as ''critical to next steps in the church's important real estate planning process."

Two church employees and a third person familiar with its operations, all of whom had seen the memo or were read its contents, said they interpreted the memo as a sign that the church is moving to consolidate its real estate holdings, with an eye toward improving its financial position.

One employee said there are two buildings on the church's 14-acre site that are not fully occupied and could bring in millions of dollars if leased or sold -- the church's 28-floor administration building on Huntington Avenue and the Colonnade, a 525-foot building that abuts the church's huge reflecting pool on Huntington Avenue. There is also vacant space atop the Mary Baker Eddy Library that could be used by staff members displaced from other buildings, employees said.

In all, the church owns nine properties, including the MidTown Hotel, which are valued at nearly $103 million, according to city assessing records. The church pays taxes on four properties: an office building at 247 Huntington Ave., an office building at 204-216 Massachusetts Ave., the hotel at 200-220 Huntington Ave, and a condo parking space at 425 Newbury St., according to city records.

The Mother Church was built on the site in 1894; the neoclassical library was built between 1932 and 1934.

''They've already cut staff," said one employee, who asked not to be identified because of the person's loyalty to the church. ''The primary thing they're looking at is what to do with these empty buildings. I don't know if the plan is to lease some of the places or sell them. Unless they're really in trouble, I don't think they would be selling them."

Philip G. Davis, a top church official, acknowledged that the church is looking at its real estate assets and considering consolidating operations into fewer buildings to save money. Davis said the church is not facing financial problems and said the discussions are in the early stages. ''This is something that's not even off the drawing board," said Davis, manager of the church's Committees on Publication, its legal and public affairs arm. ''The Board of Directors has been talking to people by invitation. They're aware of running things more efficiently, with more of a sense of balance and fiscal responsibility."

A group of three employees are ''looking over a lot of possibilities and will present lots of options to the board," Davis said. ''We're talking about more effective ways to spend the money members donate to the church. This is right at the beginning stages."

Davis said that at this stage in the planning he was unable to describe specific options the group is considering or how long their review might take.

The administration and Colonnade buildings, he said, have not been fully used for many years. Vacancy increased, he said, after staff reductions last year.

''I'd say the financial situation right now is excellent," Davis added. ''It's a matter of bringing balance and efficiency and making proper use of what we have."

The church is also looking at other cost-cutting measures. Officials have been talking to a real estate services firm about trimming the cost of managing their real estate, according to a real estate consultant familiar with the church's holdings. The consultant said the church's reflecting pool has been leaking into an underground garage.

In spring 2004, the church cut 125 jobs, nearly a quarter of its staff, and trimmed the page count and news budget of the Christian Science Monitor. The church also installed a new financial chief after an expensive building campaign, including a $50 million library intended to draw new followers and the $55 million renovation of the church grounds on Huntington Avenue.

The church posted a financial loss in fiscal 2003, its first in a decade, as expenses exceeded revenues by nearly $8 million. That compares to a $27.7 million surplus the previous fiscal year, which ended April 30, 2002.

The church also faced significant financial difficulties in the early 1990s, after an effort to build a television and radio empire. The church lost $327 million on its cable television venture alone, resulting in a large number of layoffs and the resignation of its chairman, Harvey W. Wood.

The church is controlled by five directors, in a structure laid out by its founder, Mary Baker Eddy. The Church of Christ, Scientist, emphasizes healing through prayer rather than medical care.

Donovan Slack and Cristina Silva of the Globe staff contributed to this report.