NY Archdiocese to sell Madison Ave property for $490M days after unveiling plan to settle sex abuse claims

Three days after announcing it would set up a $300 million fund to pay for a settlement it’s currently negotiating with 1,300 people who accused its priests and staff of sexual assault, the Archdiocese of New York submitted paperwork to finalize the sale of one of its most significant real estate assets for $490 million, Thursday court filings show.

A spokesperson for the archdiocese told amNewYork Law that the sale of its 455 Madison Ave. property to Lotte New York Palace, its long-term tenant, would “generate funds” to compensate victims, the majority of whom filed claims in 2020 when the state’s Child Victims Act opened up a temporary window extending the statute of limitations on sexual assault.

“[T]he Archdiocese of New York has been working with victim-survivors and their attorneys on a global settlement, a negotiated agreement to secure compensation for victim-survivors with the help of a neutral third-party mediator,” the spokesperson said in a statement. “Throughout, our goal has been to provide the maximum amount of compensation to the maximum number of victims, and the sale of this land is our latest effort to generate funds that can be used for that purpose.”

The archdiocese also sold its former headquarters at 1011 First Ave. for $103 million earlier this year to help fund payments related to sexual assault claims.

In addition to funding the global settlement, it’s currently working to negotiate for 1,300 victims, the archdiocese is also in the process of repaying loans taken to fund previous sexual assault settlements under the Independent Reconciliation and Compensation Program, which was established in 2016. The church will split the funds from this sale between those loans and the new settlement fund.

The archdiocese’s Monday announcement that it was entering mediation with a group of attorneys representing 1,300 victims and was selling property, laying off staff and cutting its budget to create a $300 million fund for a yet-to-be-agreed-upon settlement was met with criticism from victim attorneys, who said called the number “insultingly low” and its announcement premature, as the two parties were just entering mediation and had not yet spoken about a dollar amount.

Mallory Allen, a partner at Pfau Cochran Vertetis Amala, which represents 75 of the 1,300 accusers, said $300 million was nowhere near enough to compensate those with claims against the church, and Jeff Anderson, an attorney representing 300 of the 1,300 victims, said he “doesn’t know” where the number came from.

“There’s never been any discussion about that number or anything close to it,” Anderson told amNewYork Law on Tuesday. “I don’t think it’s appropriate to put it out there.”

The two parties have just begun a 60-day, confidential mediation process to attempt to come to a global settlement for all 1,300 victims. If a satisfactory settlement isn’t reached, the victims can take their cases to trial.