LRP Finance FAQs

Here are the most frequently asked questions regarding Finances that were raised at the parish-wide LRP presentations.   All the questions are listed first, then the questions with answers follow.

  1. Why and how did the parish enter into agreements with the Sisters for the St. Joseph convent and Chesterton Academy for the St. Joseph School Building?
  2. How much money was lost when Agamim left the St. John school building in mid-lease?
  3. What is happening with the parish’s capital campaign?
  4. What happened with the sale of land on the St. Joseph campus? 
  5. What is the current financial status of St Gabriel’s parish?
  6. Couldn’t the parish just re-lease the St. John campus school building in order to stay on two campuses?
  7. Why is the parish facing this financial issue now?
  8. So, how will moving to the St. Joseph Campus improve the parish’s financial picture?
  9. What will happen to the proceeds from the sale of the St. John’s campus?
  10. How can parishioners be made aware earlier of the financial problems of the parish?
  11. Can the parish sell off portions of the St. John’s campus?


1.  Why and how did the parish enter into agreements with the Sisters for the St. Joseph convent and Chesterton Academy for the St. Joseph School Building?

Both decisions had several components, both financial and ministry-based.

The convent was in a critical state of disrepair, and the parish’s options were to repair it or to demolish it. Demolition alone would have cost at least $400,000-$500,000 (almost as much as renovation) due to factors such as asbestos abatement, and it would also have required reconfiguring the entire campus’s heating system at great expense (the boilers for the entire campus are located in the basement of the convent). Of course, this would have also eliminated any possibility of repurposing/using the convent. Another important factor was that when the opportunity to host the Handmaids came up, it was discerned by parish leadership (parish council, finance council, business administrator and pastor) that the value of having Sisters at our parish justified the investment. At that time, our financial situation seemed much better due to the revenue from renting the St. John campus school to Agamim. (See question 2 for more information).

Likewise, when School for the Arts left the St. Joseph campus school, the parish could have re-leased the building to another charter school and continued its dependence on outside income to fund parish operations. However, the decision was made in both cases to pursue ministry partners that would not only use the vacant spaces but would also add value to the ministry outreach of St Gabriel’s parish. The opportunity cost to the parish in terms of increased dollars theoretically available from other potential tenants was counterbalanced by the opportunity to partner with Chesterton Academy. Likewise, the partnership with the Sisters was formed to increase the Catholic ministry bandwidth in our area. Indeed, both groups are already helping to attract new families and strengthen our ministries while reducing our dependence on lease income to fund operations.

It should be noted that about 27% of the renovation costs for the convent are being offset by contributions from Holy Family Catholic Church, which also benefits from the Sisters’ presence in their parish. These contributions are being received in $50,000 installments over 5 years; we received the first installment in June 2021. Thus, taking into account what demolition was likely to cost (not including reconfiguring the heating system!), as well as the contributions we are receiving from Holy Family, the convent renovations represent an investment of $150,000 - $260,000 beyond what we would have had to spend in any case.

2.  How much money was lost when Agamim left the St. John school building in mid-lease? 

Agamim signed a 10-year lease with a provision stating the lease could be broken at any time provided we were given 3 years’ notice. Agamim did not give us the full 3 years of notice and we ended up losing about $326,000. 

Another way of looking at this is to ask how much more rental income we would have received if Agamim had stayed for the full 10 years. The answer is that we would have received another $2,000,000 in rent over the remaining years.

3.  What is happening with the parish’s capital campaign?

The campaign has raised over $1,591,813 (as of September 30, 2021) from donations which are designated for a series of capital improvements at both campuses, and we continue to collect money for the campaign. However, at the beginning of the LRP process last fall, parish leadership decided to halt less-urgent improvements (e.g. flooring at the St. Joseph campus church) until such time as the future of both campuses becomes clear.

The available capital campaign proceeds of $2,316,081 represent the net contributions to the campaign as well as $926,958 of available proceeds from the land sale (see question 4). Estimates are used for the projects that were identified in the capital campaign but have not started. For more information on the capital campaign proceeds and project expenditures to date, please read our Annual Financial Report.

4.    What happened with the sale of land on the St. Joseph campus? 

In January 2021, $1,523,003 was received (after closing costs & original land value) from Beacon Interfaith Housing Collaborative for a piece of property on the St. Joseph campus. This site will become the home of supportive housing, which is much needed in this part of the Metro area. It is hoped that St. Gabriel’s can serve the future residents of this facility with volunteers and programming to aid our neighbors in need.

Part of the proceeds from the sale were used to pay off the balance due on a $600,000 revolving line of credit taken out to finance the remaining convent renovation costs on behalf of the Sisters, and to pay the assessment for the neighborhood street improvement project at the St. John campus. The remaining $926,958 has been earmarked for capital improvement needs that were previously identified but not funded by the donations raised through the capital campaign.

5.   What is the current financial status of St Gabriel’s parish?

The “Parish Financial Position” chart (see below) reports the assets and liabilities of the parish, including the available capital campaign proceeds as of June 30, 2021. The estimated sale valuation of the parish properties are the broker opinion of Cushman & Wakefield and represent the most conservative value for the buildings and lots.  

The parish continues to pay off debt in an orderly fashion, including the loan for the St. Joseph campus school renovation, which is being financed by lease payments from Chesterton Academy. The parish paid off the $600,000 revolving line of credit that was taken out to aid in the renovation of the convent after Agamim terminated their lease early and rental proceeds were no longer available to finance it.

Parish offertory has largely recovered from an early COVID dip, thanks to households who stepped up with electronic giving. The parish has also benefited from COVID-related money under the Federal CARES Act that was given to the parish to help sustain operations. Overall, the parish continues to utilize its long-term investments to support day to day operations of the parish.

For additional information on the current state of St. Gabriel’s finances, please read our Annual Financial Report.

6.   Couldn’t the parish just re-lease the St. John campus school building in order to stay on two campuses?

Since Agamim vacated the building, the parish has been approached by a few potential tenants, but none of them were financially viable opportunities. Many potential lessees required extensive lessor-financed renovations that would have involved taking on more debt, and thus, more risk. This did not seem prudent at a time when our parish is already struggling financially. Finding the right tenant for our relatively small building that aligns with our Christian values and that can make a long-term commitment is difficult, and can lead to a short-lived lease, as we experienced with Agamim. When Agamim left and no viable lease opportunities arose, the time seemed right to reevaluate the parish’s long-term strategy. Indeed, several factors make re-leasing the St. John campus school in order to stay on two campuses less desirable, especially considering the parish’s long-term financial heath:

First, the parish would continue to use extraordinary income to fund ordinary operations. Fiscal best practice suggests that extraordinary income such as lease revenue be used primarily for extraordinary needs such as capital improvements. This practice avoids the pitfall which the parish actually faced when Agamim left in mid-lease: namely, losing a major source of income upon which we were relying to fund ordinary operations. It seems best for the parish to begin using only ordinary revenue such as offertory for everyday operations and to reserve extraordinary revenue, such as lease income, for funding extraordinary needs such as capital improvements.

Second, because of the relatively small size of the building, the parish would likely continue to be able to attract only start-up charter schools. This opens up the risk of needing to seek new tenants frequently, as indeed happened with both the St. John and St. Joseph school buildings in the last four years.

7.   Why is the parish facing this financial issue now?

In addition to the lease issues mentioned above, several other factors are at work. Since merging into one parish, both household membership and offertory have been slowly but gradually declining. The parish numbers now slightly more than 1000 households. At the same time, parish operating costs have continued to increase every year due to inflation, as is to be expected. Lease income has historically helped cover those increasing costs, but the recent lease issue has revealed the danger of relying on that income.

At the present time, with 1000 households and an average per household giving rate of between $700 and $800 a year, this yields around $800K in annual income to cover parish operating expenses. As a side note, this level of giving per household (not per giver) is clearly within the average Archdiocesan range. So, the issue is not due to lack of giving.

With $800K in recurring revenue available to fund all parish operations, maintaining two campuses at a facility cost of around $200K each annually ($400K total) takes up half of the parish’s recurring annual income. This significantly limits our ability to invest in ministries, staff, and parish life.

8.  So, how will moving to the St. Joseph Campus improve the parish’s financial picture?

The LRP Group studied financial models of all three options — staying on two campuses, consolidating to the St. Joseph campus, and consolidating to the St. John campus — in order to discern which would be best for the parish in terms of finance only. Consolidating to either the St. Joseph or St. John campus yielded essentially similar financial results: shedding over $200K per year in current operating costs.

Below are the results for staying on two campuses or consolidating to one campus. Note that both of these charts focus on funds available for operations only. No extraordinary income or expenditures are included, such as capital campaign funds or capital expenses.

Both scenarios use similar standard assumptions for increase/ decrease in operating income and expenses. Both assume a continued slight decline in offertory in future years, with a larger drop in the consolidation scenario to account for disruption due to the consolidation process.

What happens if the parish continues on two campuses?

First, as has been happening in recent years, the parish continues tapping into long-term investments (the black line) in order to keep operations balanced. By the end of fiscal year 2029, those long-term funds are depleted and the parish begins using the last of its cash and investments to sustain operations (green line). This operating cash is depleted before the end of fiscal year 2030. 

What happens if the parish consolidates to one campus—in this case, specifically the St. Joseph campus?

The parish continues to use long-term investments (black line) to support parish operations until FY 2026 at which point the St. John’s campus is sold. Subsequently, those investments remain stable at close to $700,000 until early in the 2030’s. As a result of the decrease in operating costs from the consolidation, the parish is able to begin balancing the budget without the use of long-term investments, potentially saving those funds for other uses such as much-needed capital improvements. Likewise, because of the decline in operating expenses, the parish’s cash reserves and investments gradually increase, providing an additional degree of financial stability. 

Note that the consolidation by itself does not permanently solve the parish’s financial issues. There is still a drift downward in the annual surpluses due to the continued decline in giving and increase in costs.

This scenario also assumes a drop in contributions from supporters of the St. John campus following the move, and also assumes no overall increase in offertory at all during to the consolidation to one campus. However, it is hoped that many parishioners will see the wisdom of consolidation and the renewal in parish life that it makes possible, and will decide to increase their giving. This will provide a long-term solution to the financial issues we have been facing.

It should be noted that, if all parish income and expenses are taken into account rather than only operating income and expenses, consolidating to the St. John campus yields a better result than consolidating to the St. Joseph campus on a purely financial level, because

  •          We could get more money selling St. Joseph’s that we could St. John’s
  •          The cost of remodeling St. Joseph’s is higher than at St. John’s
  •          St. John’s still has a school that could be rented

However, the LRP task force concluded that the non-financial factors favored consolidating to the St. Joseph campus rather than the St. John campus. On balance, the task force found that these non-financial factors outweighed the financial ones. See the (forthcoming) LRP-related FAQ for an answer to the question “Why consolidate to the St. Joseph campus rather than the St. John campus?”

9.   What will happen to the proceeds from the sale of the St. John’s campus? 

Should the discernment of consolidation to St. Joseph’s be confirmed, it is expected that some of the sale proceeds, as well as some of St Gabriel’s remaining long-term investments, will be used to make the St. Joseph campus more accessible, welcoming, and up-to-date. This would include building new facilities for offices, a gathering space, and possibly a new daily Mass/Adoration chapel.

No decisions have yet been made. However, a small study group is exploring options and cost, and will share its insights prior to the final discernment determination early next year.

10.    How can parishioners be made aware earlier of the financial problems of the parish?  

The article in the weekly parish bulletin, which shows the results of Sunday collections, will be expanded to convey this information more clearly. The Finance Council is working on the design. Expect to see the change in early 2022.

11.   Can the parish sell off portions of the St. John’s campus?  

This was discussed but it did not seem practical. The school and church of the St. John campus cannot easily be split. The rectory could be sold separately but, due to the outstanding mortgage on it, our net profit on the sale would only be about $250,000, which is not enough to make a significant difference for our situation.