Hard-to-Unload ‘Jesus Saves’ Church Changes Ownership Twice in One Day

Los Angeles’ landmark “Jesus Saves” church, focus of a rancorous feud involving preachers and preservationists, was sold Wednesday--not once, but twice--and is now in the hands of a demolition-minded developer.

In a complicated, unexpected deal executed under a deadline imposed by a federal bankruptcy judge, the Glendora-based Church of the Open Door consummated the $20-million sale of the Hope Street building to the bankrupt Ninth and Grand Partnership Inc., which in turn sold the property for $21 million to a private trust.

“We’re cashed out. We’re through with downtown, and we’re through with City Hall,” said Dale O. Wolery, associate pastor of the Church of the Open Door. “We are absolutely elated. The Church of the Open Door couldn’t be happier.”

Legal Action Pending

However, the Church of the Open Door is not yet through with the Rev. Gene Scott, the colorful television preacher crusading to preserve the 72-year-old building known for its rooftop “Jesus Saves” signs. Scott, whose attempted purchase of the church in 1986 ended in foreclosure, has legal action pending against the Church of the Open Door.

Also uncertain is the ultimate fate of the building. The City Council last August declared the church a historic monument, providing a six-month demolition moratorium. However, the moratorium has since expired.

Attorney Frank Stiefel, representing the new owner, the S. Lee Ross Trust, said plans call for a high-rise development on the prime downtown real estate.

Developer John (Corky) Severson, member of a prominent Long Beach family, is the primary beneficiary of the S. Lee Ross Trust and uses it as a vehicle for a wide range of real estate interests, Stiefel said. Severson has been involved in several major building projects, including the new Home Savings Tower in downtown Los Angeles, he said.

Tuesday’s transactions came as a surprise because Ninth and Grand Partnership, after an initial “good-faith” payment of $500,000 in December, had gone into involuntary bankruptcy Jan. 8, leaving the sale in limbo.

Additionally, Church of the Open Door officials openly questioned the integrity of Ninth and Grand General Manager James L. Lucero, who had spent 21 months in federal prison following a 1979 fraud conviction. Lucero had boasted in news accounts that the church would be quickly resold to an East Coast buyer for $34 million.

In a January bankruptcy hearing, federal Judge Robert L. Eisen granted Ninth and Grand until 5 p.m. Tuesday of this week to deposit $19.5 million into escrow to close the deal or forfeit its $500,000 investment. Ninth and Grand deposited the money half an hour before the deadline after sealing the $21-million deal with the Ross Trust.

“I think my client surprised everybody by getting the deal done,” said Jim Blackstock, attorney for Ninth and Grand. “The sale will clean up their debts and leave a little profit.”

The transactions, which became official Wednesday when registered at the county recorder’s office, mean the end of a frustrating 4 1/2-year effort by the Church of the Open Door to sell the property. The church had been based in the landmark building for 50 years before a dwindling congregation prompted it to move to Glendora.

Church officials on Wednesday afternoon presented Azusa Pacific University with a check for $4.1 million to satisfy a balloon payment on the 40-acre site purchased for the new church. The sale will enable the church to proceed with construction plans; during the past year, services have been conducted in a gymnasium.

The sale also preserves for the Church of the Open Door its new Glendora home. “Jesus saved the Church of the Open Door property in Glendora,” senior pastor Michael Cocoris said in an interview.

Despite the continuing legal troubles, the protracted sale of the church has produced a windfall for the Church of the Open Door and its equal partner in the Hope Street property, Biola Hotels. In all, Wolery said, the church and Biola will split about $27.5 million in the sale, which also includes Scott’s so far non-returnable $6.5-million down payment in 1986 and about $1 million in option fees from Lincoln Properties, a development company that ultimately dropped out of its purchase effort.

Legal battles with Scott continue. In a Superior Court hearing Wednesday morning, a lawyer for Scott’s Wescott Christian Center argued that the Church of the Open Door had discriminated against Scott on the basis of religious differences when it refused to reopen negotiations with him after their initial deal collapsed.

Church of the Open Door attorney Joel Klevens said the assertion is absurd. The church refused to deal with Scott, Klevens said, “because he proved himself to be an unreliable, dishonest, defaulting purchaser. If religion was a problem, we wouldn’t have dealt with him to start with.”