Chapman University sweetens offer for Crystal Cathedral campus

Chapman University sweetened its offer for the Crystal Cathedral campus Monday, prompting a bankruptcy court judge to delay a final decision on the fate of the renowned Orange County ministry.

Chapman has been in a bidding war for the Garden Grove property with the Roman Catholic Diocese of Orange, which wants to use the modernist landmark as its cathedral. Chapman would like to use it as a satellite site for its main campus in nearby Orange, which is hemmed in from further growth.

After the diocese upped the ante over the weekend with a $57.1-million bid, $2.1 million more than its previous offer, Chapman came into court Monday and crafted a plan to allow the Crystal Cathedral Ministries to rent back the core buildings of its campus for a token $1 a month.

“That saves the ministry $1.8 million,” said Jeffrey Broker, an attorney with Chapman. Previously, Chapman had offered a $51.5-million deal that would allow the ministry to lease back its core buildings for $150,000 per month.

After a daylong hearing to hash out the latest offers, U.S. Bankruptcy Court Judge Robert Kwan said he would give the Crystal Cathedral board two days to discuss the Chapman proposal. A hearing is set for Thursday afternoon, when Kwan is expected to rule on a plan.

The Crystal Cathedral’s board last week said either bidder would be acceptable, but that now could change.

The Chapman offer includes a $2-million reserve fund to pay church founder the Rev. Robert H. Schuller, 85, his wife Arvella, their daughter Carol Schuller Milner and her husband, Timothy Milner, for various claims. Schuller had previously arranged to be paid $350,000 in living expenses per year for the rest of his life.

He and other family members have sought some or all of that money from the bankruptcy court in unspecified “insider” claims, including copyright infringement for using his name and sermons. Carl Grumer, the attorney for the family members, said that $2 million would not be enough to pay the claims.

The newest offer from the Catholic diocese was increased to take those claims into account, diocesan attorney Alan Martin said.

“Everything else is the same,” Martin said.

The Crystal Cathedral, designed by architect Philip Johnson, was the earthly embodiment of Schuller’s “possibility thinking” and the backdrop for his once-popular “Hour of Power” television program. However, the ministry has been struggling in recent years as Schuller aged, his family squabbled and spending exceeded dwindling contributions. The ministry filed for Chapter 11 protection in October 2010.

Under Chapman’s latest proposal, the ministry would be allowed a 15-year lease for the core buildings, including the iconic cathedral. In addition, the ministry could rent the Family Life Center, which houses the church’s school, for $65,000 a month for two years; after that, the building would be turned over to the university, possibly to be used as part of a health sciences center.

If the university were to sell the 40-acre property, the ministry would have the right of first refusal with six months’ notice.

Unlike Chapman, the Catholic diocese wants to use the core buildings and has proposed that Crystal Cathedral Ministries could remain at the current site for only three years and then be offered a nearby Catholic church as a replacement.

The Rev. James Richards, a pastor at the Crystal Cathedral for about 10 years, was among those favoring the Chapman plan.

“We believe Chapman is the only possible solution,” he said. “We’re praying that will happen.”

But a longtime congregant, Bruce Fox, 56, of Westminster, said he was wary of the Chapman proposal.

“That would be great if I was really confident the church could recover,” he said. “They have made some really bad decisions.”

Fox also said the Chapman proposal may be delaying the inevitable.

“Yes, this is hard for the Schuller family, watching their dreams go down,” he said, adding that it’s also hard for those who have supported the church for decades. “We know hundreds of people who are hurting. And most of whom have left.”

nicole.santacruz@latimes.com

mitchell.landsberg@latimes.com