Archdiocese Sells Ground Lease to Fund Abuse Settlements

12 December 2025

The Archdiocese of New York is cashing in one of its crown-jewel sites as it scrambles to cover mounting payouts to survivors of clergy sexual abuse.

Cardinal Timothy Dolan told parishioners this week that the Church would keep liquidating real estate to fill a widening financial hole tied to settlements, according to the Commercial Observer. The latest move is a big one: selling the ground lease under the Lotte New York Palace for $490 million to the luxury hotel operator.

Lotte already owns the building but has long leased the ground.

Roughly $200 million of the proceeds will go toward the next disbursement under the Church’s Independent Reconciliation and Compensation Program, launched in 2016. The remaining $290 million is earmarked to repay loans the Archdiocese took out to fund earlier IRCP agreements and claims filed under the state’s Child Victims Act.

A spokesperson said the deal is part of a broader global settlement effort brokered with the help of a mediator.

For Lotte, the transaction is a chance to lock up full control of one of Manhattan’s highest-profile hospitality assets. The Korean conglomerate bought the 55-story Palace in 2015.

A spokesperson called the land buy a “pivotal milestone” for the brand, which still needs sign-off from the New York State Supreme Court before closing.

The sale is the latest in a two-year sell-down of the Church’s Manhattan holdings.

In July, it unloaded its longtime headquarters at 1011 First Avenue to Vanbarton Group for $103 million; Vanbarton plans to convert the office tower to residential. An Archdiocese spokesperson said the 1011 First Avenue proceeds could also be routed toward the global settlement as the Church continues to mine its portfolio to meet obligations.

Earlier this year, the Archdiocese sold three buildings on West 25th Street in Chelsea for $48 million and in 2024, it shed a vacant East Village lot for up to $68 million to a team planning 570 units of housing.

Those deals followed a late-2023 air-rights transaction in which Ken Griffin, Vornado and Rudin agreed to pay as much as $164 million for 525,000 square feet above St. Patrick’s Cathedral.

— Holden Walter-Warner