May 20, 2010
By Mary Frances Schjonberg

General Theological Seminary's Board of Trustees has agreed on a series of steps that they say will assure that the Manhattan-based school will continue "for the next several years."

The trustees said in a news release that they agreed May 18 to create a $10 million operating reserve fund that could be built in part by selling as many as four residential apartments in the seminary building known as "Chelsea." The fund will also be built by what the release called "special philanthropic efforts, which have already resulted in $1.5 million in firm commitments."

The apartments, which according to the release have an estimated value of $8 – 10 million, have been rented to outside tenants for the last six years and have never been used for seminary purposes. The trustees approved the steps needed to turn the property into condominiums for possible sale.

The trustees also called for an effort to renegotiate part of the seminary's debt "to reduce interest payments and permit more manageable cash flow," according to the release.

The trustees committed themselves "to pursue all productive avenues for conversations with other seminaries and institutions of the Episcopal Church to consider creative collaborations and common programs," the release said, adding that "such conversations have already begun." No details of those conversations have been released.

The school will also hire an interim dean and president later this summer to succeed the Very Rev. Ward Ewing, who had announced in December 2009 his plan to retirement when a successor was chosen.

"The church should know that with the realization of this plan, the continuance of Seminary operations is assured for the next several years, during which time longer-range financial planning can be put in place," the Rev. Canon Denis O'Pray, board chair, said after the meeting.

The plans came in the form of a resolution passed during a meeting attended by Presiding Bishop Katharine Jefferts Schori, who gave the effort what the release said was her "support and blessing." The trustees had earlier asked Jefferts Schori, an ex officio member of the GTS board, to convene a small group of advisors outside of General to address the seminary's financial concerns.

"I am most gratified by the board's decisive action as well as the participation of our Presiding Bishop in the discussion," Ewing said. "The plan represents a very positive way forward. I am delighted that it was received with unanimous approval."

The details of the plan appear to match predictions O'Pray had made in April and followed a more general warning about the school's financial future issued by the entire board after a March 29 meeting when it said it needed cash to service its debt and pay for the 2010-2011 school year. O'Pray told faculty, students and administrative staff that day that the seminary needed between $2 million and $4 million, seminary spokesman Bruce Parker said at the time.

Earlier in March a consultant for the search process told the trustees' executive committee that the seminary faced a projected shortfall in operating funds.

After the March meeting, Parker told ENS that General had the money to cover operating expenses for the near future, but will require an influx of revenue to cover the 2010-2011 school year.

Ewing told ENS at that time that General's financial situation did not come as a complete surprise to him and the trustees. "We have been aware and even have had a special task group working on the reality that our income for a variety of reasons will not presently cover our operating costs and the costs on our loan payments," he said.

The seminary earns income from its annual and capital fund raising, endowment, tuition, housing, food service and other fees and pre-school payments as well as from the Desmond Tutu Center, which recently opened on campus, according to Ewing and Parker.

Ewing cited unexpected delays in opening the Tutu Center as a major factor in the changing forecast. General lost $1 million in anticipated revenue from the center last year because it did not open as predicted, he said. The school expects to make $400,000 from the center this year and to net $2.5 million annually within three to four years, according to Ewing.

Episcopal News Service
The Rev. Mary Frances Schjonberg is a national correspondent for the Episcopal News Service and Episcopal News Monthly editor.