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Bishop defends his uncompleted plan to sell St. James church site

Bishop J. Jon Bruno did commit to selling St. James the Great Episcopal Church in Newport Beach.

But it simply never happened.

That is one of Bruno's key defenses as a panel of fellow Episcopal Church officials conducts a disciplinary hearing to determine whether he was deceptive and unbecoming of a clergyman when he tried to sell the church site at 3209 Via Lido to a developer, locked congregants out and then kept the gates closed even after the sale fell through.

Bruno took the stand Wednesday on the second day of his hearing at a Pasadena hotel. The five-member panel potentially could determine whether he is suspended or defrocked.

As bishop of the Episcopal Diocese of Los Angeles, Bruno leads a sprawling jurisdiction of about 135 churches, 44 schools and 18 other organizations that stretch over six counties, from San Clemente to the south and Santa Maria to the north, the Pacific coast to the west and the Arizona and Nevada borders to the east.

Though the diocese is property-rich, Bruno testified Wednesday, it is cash-poor.

Still, the diocese did not actively market the St. James church after it transitioned back to an Episcopal parish in 2013 following a social-theological schism at the national level that led more-conservative Anglicans to break away from the Episcopalians.

Bruno said he rejected a couple of propositions before a broker told him about a $15-million cash offer from Legacy Partners, a developer that sought to build multimillion-dollar townhomes on the site.

"I said, 'I have to pray about it and I have to speak with my advisors,'" he said.

He accepted the offer a few days later and in April 2015 signed a purchase agreement.

He said it was the best use of money for the ministry and that he acted on information he had at the time, which he said showed that St. James was struggling financially.

When Bruno announced the sale to the church congregation in May 2015, he said $6.3 million would go toward the poor and needy, $1 million would go to the displaced St. James the Great members to make a community "without walls," and the rest would go toward diocese-wide missions.

During cross-examination, congregation lawyer Jerry Coughlan displayed a handwritten note from one of Bruno's advisors titled "NPB — use of funds." Out of the expected $15 million, the aide wrote "6.3 Anaheim."

In other words, $6.3 million would go toward a real estate purchase the diocese wanted to complete in Anaheim. The commercial property, long partially owned by the diocese as a bequest, could belong to it completely.

Bruno said he was not familiar with the note, though he readily acknowledged that the diocese had long wanted to complete its interest in the Anaheim property. Proceeds from the St. James the Great sale constituted just one possible funding option, he said.

The diocese took out a loan instead.

Dedicating funds to the poor and needy also was a plan if the church property sold, Bruno said.

But Legacy's investment partner in the deal, AIG Global Real Estate, decided not to proceed, and Legacy also dropped out.

"The fact of life is, the sale never took place, the money was never received from Legacy, the loan from First Republic Bank was obtained and we are servicing that loan today and we own 100% of the Anaheim property," Bruno said.

Newport Beach City Councilwoman Diane Dixon, whose district includes the Lido Isle area, testified to her early support of keeping the St. James property as a church.

When developers showed her their townhouse concept, as a council member she was neutral, she said. But she described being taken aback, especially since a nearby Christian Science church had just been demolished for a separate townhome development.

Dixon, who at the time was mayor pro tem, said she suggested talking to the community first. The community was speaking to her; at one of her town hall meetings, church supporters in red shirts packed the chamber.

Coughlan played a video of a June 2015 City Council meeting where Dixon said churches make the community special and zoning rules give people a sense of security about the land use in their neighborhoods.

Then-Councilman Keith Curry said he was concerned about availability of land for new churches and wanted to preserve what they had. On a personal note, he said the way Bruno dealt with the St. James congregation was "deplorable."

The audience at Wednesday's hearing stirred, and diocese attorney Julie Dean Larsen objected to the clip, calling it irrelevant.

Coughlan said it speaks to the community's involvement and interest and to Bruno's reputation for his conduct.

The Right Rev. Herman Hollerith, the panel chairman and bishop of the Episcopal Diocese of Southern Virginia, overruled the objection.

The hearing is scheduled to conclude Thursday.

hillary.davis@latimes.com

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