Tube City Almanac

July 30, 2007

Development Opportunity on Beacon Street

Category: History || By

The fate of one of the city's oldest surviving places of worship is in the hands of an Italian "playboy millionaire" best known for squiring actress Anne Hathaway around Hollywood --- and for being sued by Penguins owner Ron Burkle.

The former St. Stephen's Roman Catholic Magyar Church on Beacon Street was purchased in January by a limited-liability corporation controlled by Raffaello Follieri, whose family's close ties with the Vatican have enabled him to purchase hundreds of closed churches across the United States.

St. Stephen's Parish merged with St. Pius V Parish in 1994; the church was permanently closed five years ago this month after the death of longtime pastor Rev. Stephen Kato. (Additional photos are available in Tube City Online's photo gallery.)

St. Stephen's was one of 10 closed churches that companies with ties to Follieri purchased from the Roman Catholic Diocese of Pittsburgh in 2007. Another was St. Nicholas along Route 28 in Pittsburgh, the nation's first Croatian Catholic church. The St. Nicholas acquisition may make it difficult or impossible for former parishioners to preserve the structure for use as a national Croatian-American heritage center.

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Church Sales Nationwide: The Follieri Group is buying properties from dioceses to "renovate them" and "convert them to new uses" including housing or commercial businesses, according to a 2006 article in the National Catholic Reporter. The St. Stephen's property includes the sanctuary, erected in 1899; the neighboring school, built in 1931; a single-family house that served as the rectory; and three smaller out-buildings.

The exact value of the sale isn't clear from county real-estate records available online. The county's website lists only a "multi-parcel sale" to Follieri by the Diocese for $60,000.

It's not evident if Follieri paid $60,000 for each of the six parcels, or in total, but RealSTATs, the Pittsburgh-based company that tracks real-estate sales in Allegheny County, lists only one sale on Beacon Street to Follieri's company.

If Follieri paid only $60,000 for the entire complex, it was a bargain. Tax records assess the property's value at $237,600, including $194,600 for the church. (1, 2, 3, 4, 5, 6)

Church purchases by Follieri have helped some declining inner-city areas. In Atlantic City, N.J., Follieri's purchase of a church and school that were vacant for 20 years have cleared the way for the property to be redeveloped as housing for casino workers, according to NCR. .

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Controversy: But Follieri's redevelopment plans for local churches have also been controversial. In Philadelphia, the former Transfiguration Church was supposed to be renovated for use as an arts and cultural center, while housing was slated for neighboring land.

It hasn't materialized, and according to a June 12, 2006 article in the Philadelphia Daily News (not online) neighbors say the Follieri Group is letting the property fall into disrepair.

Follieri's business methods are also attracting scrutiny. One of his early American backers in the church redevelopment was Burkle, a Los Angeles billionaire who invested $105 million in the venture in 2005, and who also owns the Penguins along with Mario Lemieux.

In April, one of Burkle's companies sued Follieri in Delaware, accusing the Follieri group of "willfully and systemically misappropriating" $1.3 million for his own use, according to the Wall Street Journal.

Gossip columnists have tittered over allegations that Follieri spent the money to finance his own lifestyle, including a penthouse apartment in Manhattan and five-star hotels and restaurants for himself and Hathaway, who had star roles in the movies The Princess Diaries and The Devil Wears Prada.

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Influence Peddling?: More than a few critics also question whether the Follieri Group has used undue influence on the Vatican to purchase properties below market value. Andrea Sodano is a vice president of the Follieri Group; according to NCR, he's also the nephew of Cardinal Angelo Sodano, Vatican Secretary of State from 1991 to 2006, and dean of the College of Cardinals.

As one commenter noted on a blog maintained by Domenico Bettinelli, editor of Catholic World Report, "If this business endeavor involved Donald Trump and not Princes of the Church, words like influence peddling, arm-twisting and kick-backs would be bandied about." Follieri has denied that, saying that the younger Sodano is a merely an engineer who works on the technical side of the company.

It's not just Follieri's church redevelopment scheme that's raised eyebrows. According to the New York Post, a non-profit foundation controlled by Follieri is marketing a discount prescription plan.

Instead of distributing 5 million cards last year as it promised, it passed out only 300,000. The Follieri Foundation also promised to make grants for Catholic education, senior housing and day care. The Post says the Foundation had not made a single grant in those areas as of June 2007.

And one of Follieri's companies is marketing a special Visa credit card that's supposed to contribute 1 percent of the user's purchases to a Church missionary society. No money has yet been donated, the Post says.

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Buyer Wanted: Where does all of this leave St. Stephen's? Pittsburgh commercial real-estate broker Grubb & Ellis is listing the complex for $225,000. An ad on the company's website says it would be ideally suited for "group living, personal care, institution, school or day care." (PDF)

Though zoned for residential use, the property adjoins a commercial district along Evans Avenue and is only a half-block from the campus of UPMC McKeesport Hospital. Presumably it could be rezoned.

Churches in the City of Pittsburgh have been reused for restaurants and bed-and-breakfast style inns; McKeesport's location along the Youghiogheny River Trail would seem to make a bed-and-breakfast for hikers and bikers feasible, and the nearby hospital would also provide some customers.

Unfortunately, no one has shown any interest in doing something like that in McKeesport.

It also seems that the school could be reused as a personal care facility or day care facility, but the church building is problematic without extensive renovations. Most developers would be happier to tear it down.

In the meantime, according to the signs there's a "development opportunity" on Beacon Street, adjacent to a major hospital, next to public transportation, near the McKees' Point Marina and the Yough River Trail.

Maybe someone will buy it and make the city (and Anne Hathaway's boyfriend) very happy.

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(Tip o' the Tube City hard hat to Alert Reader John M., who first informed me that St. Stephen's had been sold.)

Your Comments are Welcome!

RE: Raffaello Follieri

If the Catholic church sold this property to the Follieri Group for only $60,000 could there have been a behind-the-scenes deal with regard to the possibility of Raffaello Follieri ever having been a sexual abuse victim of the Catholic church?

Mr. Follieri is an amazingly good looking young man. Actually, to me, he appears to resemble actor Richard Gere. Could they be related?
Justice - April 27, 2009

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