Archdiocese’s Mortuary Deal Raises Eyebrows
Set boldly in the sensitive soil where religion and commerce meet, the first of nine for-profit mortuaries to be operated in cemeteries owned by the Archdiocese of Los Angeles will open for business in the coming weeks.
The first-of-its-kind partnership between the nation’s largest Catholic archdiocese and Stewart Enterprises Inc., the world’s third-largest funeral chain, is churning up controversy even before the dedication ceremony.
Archdiocese officials say the new mortuaries will draw Catholics back into the church’s final embrace, reversing a 20-year trend in which parishioners increasingly have chosen not to be buried in Catholic cemeteries.
Consumer groups and competing funeral homes--who stand to lose a bundle of Catholic business--say parishioners may not understand who they are doing business with, and may pay more for services from Stewart.
Stewart’s 13 other full-service funeral homes in Los Angeles and Orange counties charge between 10% and 70% more, on average, for common services than independently owned mortuaries, a Los Angeles Times survey shows. Grief-stricken consumers may not question Stewart’s rates, particularly if they think their money is going to the archdiocese, consumer advocates say.
“Catholics may be vulnerable to that,” said Ruth Harmer-Carew, president of the Los Angeles Funeral Society, which helps its members negotiate more affordable services. “I was alarmed at [the archdiocese’s] willingness to risk it.”
Watched Closely by Industry, Church
The groundbreaking deal could have a massive effect on the estimated $450-million Southland funeral market and beyond. If the arrangement works, other archdioceses and nonprofit cemetery owners may soon follow suit.
“The entire industry is watching,” said Joshua Rosen, an analyst with Credit Suisse First Boston. After the Los Angeles deal was announced, Houston-based Service Corp. International, the world’s largest funeral company, formed a subsidiary to seek out similar partnerships. “By and large, [mortuary and cemetery] combo operations are quite successful. If this takes off, I see them all taking a look at it.”
The archdiocese’s immensity--it serves more than 4 million Catholics in Los Angeles, Ventura and Santa Barbara counties--makes it ideal for trying out the formula.
The first six cemeteries slated to add mortuaries--Calvary Cemetery in East Los Angeles first among them in December--handle 10,000 to 12,000 interments a year.
Stewart Chief Executive Joseph Henican said that within three to five years, he expects his company’s mortuaries to handle 50% of the funerals that precede those burials. Funerals typically cost between $2,000 and $5,000 apiece--at those rates, the six locations could generate at least $10 million in revenue a year.
That’s not much compared to the $648 million that Stewart took in last year performing more than 111,000 funerals at 575 mortuaries worldwide, but the deal gives the chain an invaluable entree into the Los Angeles market.
The archdiocese will collect an undisclosed amount of rent from Stewart for the land under the new mortuaries, but not a cut of the funeral fees. The church’s real payoff may come from providing convenient, one-stop shopping for funeral and cemetery arrangements. Indeed, the first six mortuaries could increase interments by 2,000 to 4,000 a year, adding millions to the archdiocese’s annual collections, Henican projected.
Archdiocese officials say they have steadily lost burial business to private funeral providers that operate combination mortuaries and cemeteries. The proportion of Catholic burials handled by archdiocesan cemeteries declined from 85% to 35% between 1965 and 1985, reducing one of the church’s biggest revenue streams.
But the archdiocese says its concern was more than financial.
“The connection to the church does not end with death,” said Father Gregory Coiro, spokesman for the archdiocese. “If Catholics are scattered all over, we are not tending to that part of our ministry.”
Burial in a Catholic cemetery is not necessary under the teachings of the church, theologians say.
“But the [cemetery] ground is blessed and it can provide a context for the bereaved, helping them feel like their loved ones are part of the communion of saints,” said Cathleen Kaveny, an associate professor at Notre Dame Law School and an expert on religious ethics regarding death and dying.
Archdiocese Study Fuels Arrangement
The archdiocese conducted a feasibility study, in part to determine how to bring its flock back into the fold--permanently, as it were. Among the conclusions: People want to make all their arrangements in one place. The Stewart deal lets the archdiocese give constituents what they want without sinking church capital into funeral homes or forcing clergy to become mortuary-business experts, Coiro said.
Stewart plans to complete mortuaries at Holy Cross Cemetery in Culver City, All Souls Cemetery in Long Beach and Queen of Heaven Cemetery in Rowland Heights by next summer. By the end of next year, Stewart plans to start construction at San Fernando Mission Cemetery in Mission Hills and Resurrection Cemetery in Montebello. No schedule has been set yet for mortuaries to be built at Holy Cross Cemetery in Pomona and at cemeteries in Oxnard and Simi Valley.
Church officials deny that the extra cash from the deal will be used to help pay for the $163-million cathedral being built in downtown Los Angeles. But the money could provide a boost to other programs, such as Catholic schools and the archdiocese’s Asian and Latino ministries, they say.
“No one will be compelled to use these mortuaries,” Coiro said.
Some parishioners say the on-site funeral homes will provide them with a valuable option.
“Those mortuaries may be more in tune with the needs of Catholic families and Catholic funerals,” said Betty Vanek, who attends Our Lady of Grace in Encino and whose family members are buried in San Fernando Mission Cemetery. “It just has to be stated clearly that Stewart is a business of its own and that’s were the money is going.”
Ads for the mortuaries, which have run for months in Tidings and Vida Nueva, Catholic publications, spell out Stewart’s relationship with the archdiocese. But critics say the company’s other marketing and sales tactics are not as explicit.
Competitors argue that the mortuaries’ mere presence on archdiocese land amounts to a tacit endorsement.
“We’ve been supporting our parishes for years, but now Stewart’s in the driver’s seat,” said Manuel Bagues, owner of Bagues & Sons Mortuary in Los Angeles, whose business involves Catholic services almost exclusively.
Stewart has created a Santa Fe Springs subsidiary, Catholic Mortuary Services, to manage the new mortuaries, all of which will take their names from the archdiocesan cemeteries on which they will sit. The subsidiary already has begun using lists provided by church officials to solicit families with relatives buried in the cemeteries, offering them prepaid funeral plans.
Walter Kuiland said his mother-in-law bought a prearranged funeral at Calvary Mortuary for about $4,200, working with a Catholic Mortuary Services representative at a table outside her Montebello church. Nothing in her contract mentioned Stewart. The salesman’s card read “Providing Catholic family services for the Archdiocese of Los Angeles,” Kuiland said.
“She made the logical assumption that this was being marketed by the church,” said Kuiland, whose mother-in-law died in September. Calvary Mortuary was not yet complete, so the family opted to use a different funeral home. “The church shouldn’t be involved in things like this. They certainly aren’t informing parishioners well enough, and the fees aren’t any cheaper.”
Stewart officials say their sales pitch and materials are clear.
“We don’t make a public disclaimer that we are not the archdiocese, but we don’t hide our relationship with Stewart Enterprises,” said Randy Stricklin, president of Catholic Mortuary Services and chief operating officer of Stewart’s California division.
Henican brushed aside complaints that Los Angeles-area parishioners would overpay at the Stewart mortuaries, saying their rates are generally “in the middle.”
General service fees average $1,502 at Stewart mortuaries, 71% more than the $879 charged, on average, by area independents, a Times survey of 180 Southland funeral homes shows. Stewart’s prices are between 11% and 24% higher than independents for common services such as the most basic cremations, simplest burials and receiving or forwarding bodies.
Archdiocese officials say that they will have input on prices and have asked that they not exceed national norms, but that Stewart will have the final say. Henican said rates would differ from property to property, tailored to the communities they serve.
