Crystal Cathedral to file bankruptcy exit plan

[May 28, 2011]  GARDEN GROVE, Calif. (AP) -- The Southern California megachurch founded by one of the nation's pioneering televangelists, the Rev. Robert H. Schuller, on Friday filed a bankruptcy plan that would pull the Crystal Cathedral out of crushing debt by selling its sprawling campus and famous, glass-spired sanctuary to a local real estate investment group for $47 million.

The church would lease back most of its core buildings under the plan, which must be approved by a bankruptcy judge, so worshippers and visitors won't notice any changes in services or outreach. The church's popular, decades-old televangelist program "Hour of Power" broadcasts would also continue, the church said.

The plan would allow the ministry to lease the church buildings back for a guaranteed 15-year period, with the additional option of buying the core campus back at a fixed price within four years, said Marc Winthrop, the church's bankruptcy attorney.

The deal would erase the cathedral's $36 million mortgage and wipe out almost all of the $10 million in unsecured debt -- including $7.5 million owed to vendors -- that has plagued the Crystal Cathedral for several years after a disastrous leadership transition and a devastating slump in donations.

The ministry must be out of the Family Life Center, which houses administrative offices and a private school, within two years, the attorney said.

"The ministry is going to continue in the same place, in the same buildings," said Winthrop said. "It's just that we had to go through a financing transition to get rid of the debt."

A court hearing is set for July 13.

The plan specifies that the ministry will sell the property to the Orange County-based real estate investment firm Greenlaw Partners LLC, according to disclosures filed with the bankruptcy court. The property will be divided into up to five parcels and multi-family housing will be built on two parcels, with a parking lot on a third parcel.

The buyer has agreed to pay $46 million with an additional $900,000 set aside in escrow, according to court papers.

The charismatic Schuller got his start in Southern California preaching about the "power of positive thinking" from the roof of a concession stand at a drive-in theater as the car culture began to boom in the post-World War II era. He was considered a theological radical at the time, but people were soon driving from all over the Los Angeles area to sit in their cars and listen to Schuller preach through the movie loudspeakers that hooked to their windows.

Schuller, now 84, soon turned his humble pulpit into one of the nation's first megachurches, beaming his weekly Sunday service into 1 million homes worldwide through the "Hour of Power" TV show, which went on the air in 1970. Schuller became a familiar presence on television, a smiling figure in flowing robes, with snowy white hair and wire-rimmed aviator glasses.

In 1980, he opened the Crystal Cathedral, a 2,900-seat see-through church made of 10,664 panes of glass. A $20 million architectural marvel designed by the acclaimed Philip Johnson, it became a major Southern California landmark and a tourist attraction that drew people from all over the world. Schuller soon added a K-12 school and a tourist center.

But his religious empire began to collapse after a disastrous attempt in 2006 to hand over the leadership to his son, Robert A. Schuller.

The much-heralded changeover alienated older "Hour of Power" viewers and ended in a bitter and very public family spat, with the younger Schuller disappearing from the broadcasts and abruptly leaving the church altogether in 2008, less than three years after he assumed his father's mantle. The elder Schuller's daughter, Sheila Schuller Coleman, was eventually named senior pastor, a position she continues to hold.

A plummeting economy also took its toll, and viewer donations declined by as much as 24 percent in 2009, the year before the church declared bankruptcy. Its local congregation now stands at fewer than 5,000 people, although new Spanish-language and Arabic-language services draw about 2,000 and 400 worshippers respectively.

The church laid off 250 of its roughly 450 employees, sold its beloved retreat center, cut salaries and canceled contracts with more than 100 TV stations nationwide. It also canceled its world-famous Christmas and Easter pageants and racked up unpaid bills to 550 creditors, including vendors who provided live animals, costumes and other props and services for the epic holiday shows.

A week after declaring bankruptcy, the elder Schuller went on the "Hour of Power" with an emotional plea to viewers to donate more to help his ministry survive.

"If you are a tither, become a double-tither. If you are not a tither, become a tither," he said at the time. "This ministry has earned your trust. This ministry has earned your help."

Schuller Coleman said in a statement posted on the church's website that the church had picked this restructuring plan from among several because it allowed vendors to be repaid immediately and put the church on solid financial footing to pursue a new vision, including global outreach to the poor.

"We need to rise up and be the hands of Christ to help a hurting world one neighborhood at a time. Reaching future generations with the positive message of Jesus Christ requires an outreach of love," she said in the statement. "I'm excited about what God is doing now and will be doing in the future through the Crystal Cathedral

On Friday, worshippers and tourists at the church's Garden Grove campus said they were cautiously optimistic and continued to support the cathedral and its new vision.

"It sounds to me like it's a good thing," said Mike Amaneck, who has attended church at the cathedral every Sunday for 13 years. "It's a wonderful positive place and I was really inspired by the news ... because it's better for the church to go through this to be in a position where they'll come out stronger -- and they will come out stronger, there's no doubt about it.

As Amaneck spoke, tourists from as far away as Germany wandered the 40-acre grounds in the sunshine, snapping pictures and lingering outside the sanctuary, where a private funeral was being held.

"I think the news today is an opportunity of hope," said Amaneck's wife, Sarah. "There are times in life when things look kind of dark and gloomy, but God will have the last word."

[Associated Press; By GILLIAN FLACCUS]

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