In Milwaukee Archdiocese Bankruptcy, Messmer Loses $3.4 Million
By Annysa Johnson
In every bankruptcy, there are winners and losers. Parties made whole and those who are paid a fraction of what they are owed by the debtor. The Archdiocese of Milwaukee bankruptcy is no different. Among the losers that emerged in the archdiocese's reorganization plan filed this month is St. Rose and St. Leo Catholic Urban Academy, one of the most impoverished schools in the state, which the archdiocese had promised to support when Messmer High School took it over in 2007. Under the terms of the deal signed at the time, the archdiocese agreed to pay Messmer $5 million over 15 years — $2 million for capital improvements and $200,000 a year for operating expenses. Those payments stopped when the archdiocese filed for bankruptcy in January 2011, and under its reorganization plan, it would pay just $5,000 of the $3.4 million it still owes. Messmer President Jim Piatt said the three-school system has been operating at a deficit since the money dried up. He said it has delayed needed repairs and improvements at the St. Rose and St. Leo building at 514 N. 31st St., and slowed academic initiatives that were planned there. But he said Messmer already is looking for alternative sources of funding. "It is truly a part of the tragedy," Piatt said, referring to the sexual abuse crisis that has rocked the Catholic Church and pushed several of its dioceses into bankruptcy since 2004. "But this is not going to deter us," Piatt said. "We're going to continue to make our best appeal to anyone within or outside of the Catholic community that believes in what we're doing at St. Rose." A spokesman for Milwaukee Archbishop Jerome Listecki called it "disappointing" that the archdiocese could not fulfill its obligation to the struggling school, but he said the church remains committed to educating Milwaukee's poorest children. "The Catholic school commission is constantly looking at how to provide education to those in the most need," said Jerry Topczewski, the archbishop's chief of staff. The Archdiocese of Milwaukee filed for Chapter 11 bankruptcy protection in January 2011 to address its mounting sexual abuse claims. Under the reorganization plan — the archdiocese's proposed road map for exiting bankruptcy — 128 men and women who were sexually abused as children by diocesan priests would share between $3 million and $4 million, with an opportunity to seek more through insurance litigation. And before it's over, it said, the archdiocese expects to pay an estimated $18 million in legal fees. Under the plan, Messmer appears among a list of 229 vendors that will receive a maximum $5,000 of what they are owed. Because most are owed less than $5,000, they will be made whole. But 18 are owed more, including We Energies and the Milwaukee Water Works, the public relations firm that marketed the archdiocese's multimillion-dollar capital campaign, the U.S. Conference of Catholic Bishops and others. At $3.4 million owed, Messmer will take by far the biggest hit. Students and teachers appeared oblivious to any financial crisis at St. Rose and St. Leo on Thursday. Students in blue jumpers and sweaters emblazoned with the Messmer logo played basketball and zoomed around on scooters in the gymnasium. Associate Principal Carrie Starr counseled two little boys — so small their heads barely peeked above her office table — for their minor tiff on the morning school bus. And the entire student body, with enrollment around 450, gathered for a Black History Month program in the afternoon. "We're kind of known as the have-not school, but our teachers don't focus on that," Starr said. "If anything, it makes us pull together more." Piatt said Messmer has put off replacing the school's roof (at a cost of $300,000), updating the antiquated heating system, and replacing the gym floor, part of which had buckled as a result of flooding. He said the school lost out on a health screening program because it was unable to install a proposed elevator; and that plans to add an engineering program and language and literacy services for a growing Burmese population have been slowed. St. Rose and St. Leo, which draws students from a 15-mile radius, has one of the poorest student bodies in the state. About 92% of the students qualify for free lunch; and 9 in 10 attend the school on state-funded tuition vouchers. Messmer High School, at 742 W. Capitol Drive in Milwaukee, also operates a second preparatory school in the nearby Riverwest neighborhood. The high school, with about 700 students, has its own complicated history with the archdiocese. Founded as the area's first Catholic high school in 1926, Messmer was operated by the archdiocese until it closed due to declining enrollment in 1984. A group of parents and alumni reopened Messmer the following year as an independent Catholic school, but it would not be officially recognized again by the archdiocese until 1998. The high school created Messmer Prep at the former St. Mary Czestochowa Parish school a year later, and took over St. Rose and St. Leo at the request of the archdiocese in 2007. All of those decisions, Piatt said, reflect Messmer's commitment to providing a Catholic education in Milwaukee's urban — and often that means poor and minority — neighborhoods. "These kids really are precious," said Piatt, who taught at Messmer High in the 1990s and served at Dominican High School and the Franklin and Brown Deer school districts before returning to lead the Messmer system six months ago. "I know it's corny, but I take it very seriously," he said. "We have an obligation to give them the very best we can."
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