April 2, 2002
Dear Reader,
Many articles have been written in the public press concerning Bishop Timlin’s Society of St. John and their development project in Shohola, Pennsylvania. What has been disturbing is the avalanche of misrepresentations, falsehoods, and self-serving manipulations of what transpired. I am the developer referred to in these articles and as such I have first-hand knowledge of the events that took place. The purpose of my letter, then, is to set the record straight.
It is important to establish the reasons and scope of my involvement in the project. Allow me to quote directly from the Society of St. John’s own Special Report which was written by Rev. Carlos Urrutigoity and sent to every supporter of the Society: “Convinced that the village offers him a strong hope to raise his family in a truly healthy environment, Mr. Cioci has decided to direct his talents and capital to hasten this development.” As stated in the Special Report, my wife Kathy and I felt that the development of this neighborhood would be an ideal Catholic environment in which to raise our six children.
We also felt humbled that we were chosen to take on this project, especially after we stated to the Society on many occasions that if they had another developer in mind, we would be happy to step aside and simply move into the village when it was ready. This was not to be and at the encouragement of Rev. Urrutigoity, I established St. Joseph’s Enterprise, LLC, a for profit company organized for the expressed purpose of building a “Catholic Village” in Shohola, Pennsylvania according to the vision outlined by Bishop Timlin and his Society of St. John. I further drafted an agreement, which was signed by Rev Urrutigoity and myself, witnessed by Mary Schwerdt, the Society’s administrative assistant. Let me again quote from the Special Report: “With the agreement signed with St. Joseph’s Enterprise, LLC the village project is taken to a new level.”
The agreement essentially stated that St. Joseph’s Enterprise would fund a Market Demand and Financial Feasibility Study to analyze the feasibility of developing the Shohola property. In return St. Joseph’s Enterprise would have the right to first refusal on the project.
To this end, through St. Joseph’s Enterprise, I expended thousands of hours of time and tens of thousands of dollars hiring experts to analyze the feasibility of developing the Society’s proposed project. I traveled, at my own expense, around the country and Canada to meet with nationally recognized developers, planners, architects, engineers and bankers. I feel I exhausted every avenue in seeking to make this project work. We completed both a Market Demand Study and Financial Feasibility Study as promised.
The unfortunate conclusion was that the property purchased by the Society is overpriced for this type of development and possesses serious practical obstacles to development. Given the nature of the land (it is on the side of a mountain), an elaborate and expensive sewage treatment facility would have to be built. In addition, the property has no public access and, in order to obtain access, more land would have to be purchased and/or a bridge built, not to mention the construction of long roads. Our estimates are that the infrastructure costs alone would amount to between $12 and $15 million.
This of course does not include the cost of the land and financing. According to our experts, the land is worth between $1.5 and $1.8 million. However, based on my meetings with the Society before the study, they were interested in, at a minimum, covering: (1) their debt of a half million dollars; (2) some $100,000 they received from people who placed deposits on land (which I was informed they had spent on other things); and (3) the outstanding mortgage at the time of $1.9 million. This would bring the total to a minimum of $2.5 million. Given the severity of these numbers, I concluded that it would be impossible for me to go forward with the project.
What is disturbing and hurtful to me and to my family is the way that Bishop Timlin and his Society have sought to represent our work and the future of the project after the negative conclusions of our studies.
First, let’s consider Rev. Daniel Fullerton’s comments of 2/7/02 in the Times Leader. “The developer’s ideas – houses sprawled out with an acre or two of land apiece – did not fit the Society’s more modest plans for a cluster of homes, and he withdrew from the project.” Rev. Fullerton’s comments would lead one to believe that I somehow came up with a plan contrary to that of the Society, and that if their plan had been adhered to then the project would have been financially feasible.
Our consultants concluded that the enormous infrastructure costs were not the result of the nature of the development being proposed, but were rather due to the difficult nature of the land and this property specifically. Essentially, it didn’t matter significantly whether the housing was spread out or clustered. Either way, the need for access, long roads, and extensive sewage treatment would result in costs totaling $12 to $15 million. Further, we never had any preferences toward cluster or single detached housing. It was always understood that we would have a combination.
In terms of the “modest” plans of the Society, I should like to remind Rev. Fullerton that for over a year Bishop Timlin and his Society fundraised on the building of a “City” on top of the mountain, before someone came to the realization that it was financially impossible to accomplish. Further, the Society’s own consultants told me that the project as outlined by the Society was cost prohibitive and unrealistic given the enormous scope of the Society’s plans. Some of their consultants estimated that it would cost billions of dollars to construct Bishop Timlin’s and the Society’s original proposal. Rev. Urrutigoity admitted this to me at a dinner meeting with some of the Society’s members.
In an effort to bring realism to the project, St. Joseph’s Enterprise introduced the idea of a “neighborhood” rather than a “City” as the proper terminology and scope in describing what we thought might be feasible on the Shohola property. Through the Market Demand Study we asked the Society’s supporters and interested parties what they were willing to buy. The result was a development proposal of less than 100 units. Certainly this proposal is more modest than building “Tuscany” on the side of a mountain, which is still being touted by the Society as of the writing of this letter.
Next, let’s consider the comment made by Rev. Dominic O’Connor in defending the feasibility of the development to reporter Tom Kane of the River Reporter: “The Market Demand Study completed by St. Joseph’s Enterprise was positive.” In this statement, Rev. O’Connor deliberately took the results of the Market Demand Study out of context when explaining it to the reporter and others who have contacted the Society concerning the project. For the record, the Market Demand Study concluded that approximately 120 families had some significant level of interest in moving to the proposed neighborhood. Our estimations were that perhaps 80 or so families would eventually be seriously interested in purchasing homes at a price of $150,000 to $225,000.
This, in and of itself, is a positive result. However, in order, to reach the financial expectations of the Society and the infrastructure costs stated earlier in this letter, the cost per home would have had to be in excess of $800,000, simply to break even.
What is mind boggling is that Bishop Timlin, Rev. O’Connor and the rest of the Society members were not only aware of these numbers, but they have also admitted that their own consultants had come up with the same numbers. This was confessed to me in a meeting with Rev. Urrutigoity and Mary Schwerdt, and was recognized by Rev. O’Connor himself in the River Reporter Article found at www.saintjustinmartyr.org/news/notices.html.
A further statement made by both Rev. Fullerton and Rev. O’Connor was particularly hurtful and disgraceful. Both clerics have stated in a number of articles that, “We had no legal agreement with Cioci.” (See articles posted at www.saintjustinmartyr.org/news/notices.html.) I am at a loss as to how it benefits Bishop Timlin’s Society to make this statement, but as I mentioned earlier in this letter, the Society’s own Newsletter Special Report states that, “With the agreement signed with St. Joseph’s Enterprise, LLC the village project is taken to a new level.” As mentioned earlier, Mary Schwerdt witnessed the signing of this agreement between myself, on behalf of St. Joseph’s, and Rev Urrutigoity on behalf of the Society. If the Society’s attorneys determined that the agreement was not a legal document, I was never informed. The facts remain, both the Society of St. John and I have completed studies, and our numbers are the same.
Based on the Society’s statements that they had no legal agreement with us, I am left to wonder, had the studies been positive, would the Society have taken my work and gone to another developer, breaking the agreement that we signed.
The Society still fundraises on the notion that they are moving ahead with the project (see Society website, National Review articles, and River Reporter articles). It must be stated, however, that in my meeting with Bishop Timlin and Bishop Dougherty to present my findings, Bishop Timlin informed me that talk of the project was “moot” because he had ordered a stop to it and that the Society was being ordered to sell the land. Dr. Jeffrey Bond and Fr. Richard Munkelt were also in attendance at this meeting.
I am not aware of whether the Bishop has had a change of heart. If so, a reasonable person would expect the Bishop and the Society to explain what is so special about this piece of property that contributors should raise over $17 million to subsidize families to move on to it.
The Bishops revealed to me at the meeting that Rev. Urrutigoity had informed the Bishops that I had withdrawn from the project because I suffered “financial impoverishment” due to losses incurred as a result of the tragic events of September 11th. This despite the fact that I personally met with Rev. Urrutigoity and Mary Schwerdt on Labor Day Weekend, nearly two weeks before September 11th, to inform them of my leaving the project on the Shohola property due to the results of the Market Demand and Financial Feasibility Studies. At the meeting with Rev Urrutigoity and Mary Schwerdt, I informed them that I thought they should sell the property.
In the interest of clarity and truth, I must add that I did say to Rev. Urrutigoity and Mary Schwerdt that I would consider doing the project on another piece of property, and that I would need a couple of weeks to consider the different aspects of moving to another property and the ability of the Society to financially survive this serious turn of events.
The two weeks I took to make up my mind coincided with the tragic events of September 11th. This event had a particular impact on my family, since we own a condo in Battery Park. I called Mary Schwerdt to inform her that St. Joseph’s Enterprise was not going to proceed with the project on another property and that, given the events of September 11th, I felt God was calling my family to move on to other ventures.
I never told Mary Schwerdt that I was “financially impoverished” and for the record, through the grace of God, my family is doing quite well.
Let me emphasize, I informed the Society nearly two weeks before the September 11th tragedy that I was not going ahead with the project on the Shohola property as a result of the studies we had commissioned. Despite this indisputable fact, they informed the Bishops that I had withdrawn from the Shohola project due to “financial impoverishment” I incurred because of the September 11th tragedy.
What was further troubling to me was that for over a month after my meeting with Bishops Timlin and Dougherty, the Society continued to connect the Society’s website to my old Market Demand Survey and the old newsletters stating that the project was underway. It was not until I found out about this and called the Society demanding that the link be detached that it was taken off. Obviously, leaving the link to my old website would give the impression to the Society’s donors that St. Joseph’s Enterprise was still going forward with the project when I had informed both Bishop Timlin and his Society of St. John that we were not.
I hope that I have made it clear that St. Joseph’s Enterprise, LLC was established for the expressed purpose of building this project. This was done with the consent of Bishop Timlin and the encouragement of the Society of St. John. We would have enjoyed nothing more than to see this project come together and give glory to God. It didn’t.
I am at a loss as to what would motivate Bishops Timlin and Dougherty and the Society of St. John to characterize my work on this project in the way they have. I leave the readers of this letter to draw their own conclusions. My family had been nothing but supportive of the work of the Society. Their vision was a noble one, but sadly, could not be fulfilled due to the poor decisions they made. I would have hoped that they would have taken responsibility for these decisions and acted like the men that they claim to be, rather than inflicting more pain on the people who have opened their hearts, families, and wallets to the misguided deeds of Bishop Timlin and his Society of St. John.
In the Holy Family,
Vincent F. Cioci
President/Founder
St. Joseph’s Enterprise, LLC