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St. Andrew’s
Cathedral pays off
$4 million debt
on failed project

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Mary Adamski
Star-Bulletin

After six years of fiscal belt-tightening, the Episcopal Church in Hawaii is free of a $4 million debt that was the residue of the failed Hale O Malia retirement community development.

Bishop Richard S.O. Chang reported to the annual convention of the Episcopal diocese that the last payment on the loan was made Oct. 13. The two-day meeting of 300 clergy and lay delegates at St. Andrew's Cathedral Tenney Theatre was to conclude this afternoon.

Putting the debt to rest led to cutbacks in church programs and termination of a few jobs.

The Hale O Malia project, a planned $150 million Kahala development combining independent living apartments and a skilled nursing facility, was put together in the late 1980s. The project was stalled by financial problems, and the developer reported more than $16 million in debts in its 1998 bankruptcy filing.

The diocesan finance committee guaranteed the developer's $4 million loan, and when the project failed, the church was forced to assume the loan. Chang's predecessor, Bishop Donald Hart, resigned in 1994 in the midst of recriminations about the project.

Chang said this week that there have been some positive results from the belt-tightening. "The situation helped us re-examine how we were doing things.

"Some exciting things happened. People assessed how they did ministries and identified new resources," Chang said. Congregations made an effort to avoid duplication of efforts and to pool resources. An example is the three Big Island churches, which pooled financial resources to hire a full-time youth ministry worker to serve all three parishes, he said.

Another initiative was to join a national education program for clergy and lay people. Hawaii is one of 12 dioceses in the program funded by Eli Lilly Co.

"We have had people deciding to talk to the church next door and create a working relationship. I'm thankful and proud of people for their faithfulness in making it work."