GTS financial plan announced

The Board of Trustees of the General Theological Seminary unanimously approved a plan to bridge the financial plan to continue day-to-day operations. The plan fills the gap between their current cash position and operation needs and the anticipated revenue that should come from the construction of a seven-story condominium projects as well as the Tutu Conference Center.

Earlier this spring, the Seminary reduced operating expenses over 16% but were concerned that without a way to create an operating reserve, the Seminary would run out of cash in November 2010.

The plan includes the creation of a $10 million operating reserve fund through a donation of $1.5 million combined with the proceeds of the sale of four apartment units within the building known as Chelsea 2, 3 and 4, which is estimated to yield between $8 and $10 million dollars.

The Seminary will also renegotiate their current loan package to reduce interest payments and improve the institution’s cash flow.

Following the meeting the Rev. Canon Denis O’Pray, chair of the Board of Trustees, said in a news release, “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 Trustees also decided to commence with the selection and calling of an interim Dean and President to replace The Very Rev. Ward B. Ewing, who is retiring from that position to take effect this summer.

Finally, 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. Such conversations have already begun.”

In a letter to the Bishops of the Episcopal Church, Dean Ewing detailed the plan:

Central to the plan is the creation of a $10 million Operating Reserve – a pool of capital to bridge the gap between the present inadequate cash flow and the future when revenue streams are projected to cover the cost of loans and operations. This operating reserve will be built through philanthropic contributions combined with income derived from selling residential apartments owned by the Seminary. These apartments have been rented to outside tenants since they were developed as part of the agreement with the Church Center to move to General Seminary. Since they have never been used by the Seminary, selling them will not affect the Seminary’s mission or program. An additional component of the plan includes refinancing one of the Seminary’s loans to obtain a lower interest rate. The Seminary will continue to pursue collaborative actions with other institutions of the Episcopal Church to reduce costs and develop programs.

The above-mentioned plan to move the Church Center to Chelsea Square never materialized. Before their renovation, the apartment units in 2, 3, and 4 Chelsea were faculty and student apartments. Neither the motion by the Trustees nor the news release describing the plan detail which of the units in the building will be sold or if the whole building is included in the plan. In a letter to alumni, the Seminary said it would retain the right of first refusal on the future resale of these four residential units.

The letter to the Bishops cited the Anglican Studies distance education program created in partnership with Colgate Rochester Crozier Divinity School and the Diocese of Rochester as one example of the sorts of collaboration the Seminary is seeking to develop. In April, the Trustees assigned a group to pursue conversations with “representatives from other seminaries and church entities in conversations that might include consideration of financial cooperation, program collaboration, merger, or other mutually beneficial relationships.”

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