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	Church Selling Land Meant for High School By Scott Marshall North County Times December 18, 2007 http://www.nctimes.com/articles/2007/12/19/news/top_stories/1_03_4612_18_07.txt NORTH COUNTY -- The Diocese of San Diego is selling Oceanside land once set aside for a long-awaited Catholic high school in North County. The millions of dollars to be raised by that sale, plus millions more that the diocese expects to reap from selling two now-shuttered schools, won't go to a fundraising effort for the North County campus, as had once been promised. Instead, the proceeds will help pay a $198 million settlement to victims of sexual abuse in the church, a Catholic diocese official said Tuesday. No timeline had been developed for the construction of the envisioned high school, which was to be named Pax Christi, but "it now looks like it will take much longer to realize than many may have originally hoped," diocese Chancellor Rodrigo Valdivia said in a Dec. 11 e-mail responding to a reporter's questions. Stephen Smith, 38, whose four children attend Catholic school at the Old Mission Montessori School in Oceanside, said the sexual abuse victims should "get what they can get from the diocese," but that the diocese "is now punishing the kids of today" by not moving forward with the North County campus. "I just think they've been jerking around North County for too long," Smith said. In September, the Catholic Diocese of San Diego reached a settlement with 144 abuse victims that brought an end to lawsuits that had prompted the diocese to file for bankruptcy. The settlement calls for the San Diego diocese to pay $153 million to settle 111 cases involving its own clergy and $30 million for 22 cases involving members of Catholic orders. The San Bernardino Diocese, which used to be part of the San Diego Diocese, also will pay $15 million toward the settlement. The first of two installments of the settlement is to be distributed to victims in January. The second installment is due in September. The victims are to receive, on average, about $1.4 million each. Insurance and a fundraising campaign called "Embracing Our Mission" are intended to provide most of the money for the settlement, but the diocese also plans to sell property to raise money. The land to be sold includes about 38 acres in Oceanside that once was envisioned as a site for a Catholic high school in North County. That diocese-owned property sits just east of Mission San Luis Rey. A document on the diocese's Web site, however, identifies the Oceanside property as "rejected for a North County high school site." Valdivia said in an e-mail that a committee of parish pastors and other leaders decided in 2005 that the Oceanside site was too far west and that another site was needed for the planned North County school. In a telephone interview, Valdivia said the diocese had planned to use the Oceanside property in a trade for land elsewhere for the planned school, but that is no longer possible because of the settlement. The North County high school was one of three campuses planned as part of the diocese's Secondary Education Initiative. The other two, Cathedral Catholic High School in Carmel Valley and Mater Dei Catholic High School in Chula Vista, already have been built and are open. Two former Catholic high schools, University of San Diego High School and Marian High School, have closed and are slated to be sold. Proceeds from the sale of those schools were to have been divided among the planned North County campus and the Cathedral and Mater Dei schools, but the North County project stands to lose its share, the diocese said. "Each of the three schools was to receive $25 million from the sale of the properties to offset the entire cost of land purchase, construction and furnishings," Valdivia said in an e-mail to the North County Times on Tuesday. "Having to make the settlement payments does not allow us to do that now." The sale of the Oceanside land and the closed high schools is expected to generate $90 million, but just $40 million will be applied to the sex abuse settlement, a document on the diocese's Web site states. That is because the diocese intends to "follow through with its commitment" of $25 million each to the Cathedral and Mater Dei high schools, Valdivia said in his Dec. 11 e-mail. Smith said he believed the diocese moved land for Cathedral and Mater Dei high schools into a corporate subsidiary so they were protected from being used in the settlement, but that the Oceanside land was not. Valdivia disputed this. He said in the Tuesday e-mail that "the assertion that any properties were transferred to somehow protect them is totally inaccurate." County property records show the site of Cathedral Catholic High School is owned by the Catholic Secondary Education -- Diocese of San Diego Inc., a nonprofit corporation. The diocese is listed as the owner of the Mater Dei Catholic High School site and the Oceanside parcels of land at issue, county property records show. The issue of whether the diocese was transferring property to protect its assets also arose in 2004 during litigation of the sexual abuse cases. Andrea Leavitt, an attorney for some of the abuse victims, alleged then that the diocese created a "straw corporation" to secure a loan to build three high schools and transferred assets to the corporation. An attorney for the diocese argued then that there was no indication of fraud and that the church was only trying to build a school. Los Angeles Superior Court Judge Haley Fromholz, who oversaw the sexual abuse lawsuits, rejected Leavitt's request to reverse the property transfers and freeze diocesan assets. The judge ruled, in part, that transferring property to a wholly owned subsidiary is "not necessarily fraudulent" and that Leavitt had not shown that she was likely to win her case. The diocese still envisions adding a North County campus in the future, but "addressing the settlement payments is, however, a more pressing matter," Valdivia said in an e-mail Tuesday. "Everyone would like to get a high school in North County up and running tomorrow, but it does not look like we can do that," Valdivia said in the e-mail. "The documents posted on our Web site clearly indicate that all available assets are being liquidated and used for the (settlement) payments. The only remaining properties are ones that are essential to the mission of the Church and will, if at all possible, not be sold." Smith said the diocese has been talking about a North County campus since he was in high school. "Probably when my kids are adults, there might be a hope," Smith said. Contact staff writer Scott Marshall at smarshall@nctimes.com or (760) 631-6623.
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