St. Charles Borromeo Seminary real estate fight may go to trial

The Archdiocese of Philadelphia has been trying for more than four years to sell or lease 40-plus acres of the St. Charles Borromeo Seminary campus in Lower Merion Township.

Thanks to a federal judge's decision late last week in a fight over a real estate deal involving Main Line Health and a New Jersey developer of senior-care facilities, the archdiocese's wait for a payoff from the Wynnewood property could now extend for years.

Until the litigation ends, no one can buy the seminary property, which sits across Lancaster Avenue from Lankenau Medical Center. A settlement also could clear the way for a sale.

In a 29-page ruling Friday, U.S. District Judge Gene E.K. Pratter rejected motions for summary judgment by Main Line Health and the seminary, finding that enough evidence existed for a trial to decide whether the health system breached a fiduciary duty to developer William Burris when it decided in 2015 to pursue the seminary property itself, cutting Burris out of a deal he brought to Main Line Health in 2014.

The key issue in the case is whether Main Line Health and Burris had a partnership or were at least jointly promoting a proposal to build a nursing home or some other facility for seniors on the seminary property. If either of those relationships existed, Main Line Health may have been in no position to take the deal from Burris.

"While email exchanges between Main Line executives, and Main Line's shifting position vis-à-vis Mr. Burris may raise doubts about whether a Burris-Main Line partnership existed, those inconsistencies or shifts are ultimately for a jury, not the court, to evaluate," Pratter wrote.

The seminary sale is at least the second proposed real estate deal by the archdiocese in recent years to get bogged down. A plan to sell 200 acres in Marple Township for $47 million fell apart when township officials rejected the developer's proposal.

On Tuesday, the archdiocese, which has been using the money from real estate sales to fund pension and other liabilities, and Main Line Health said they are were limited in what they could say about the Burris case.

"We still hope to reach a successful resolution of this matter in the near future," said Ken Gavin, spokesman for the archdiocese.

"While we will not discuss or comment on pending litigation, we are anxious for all of the relevant facts to come to light over the course of the legal process," Main Line Health said.

Burris' lawyer, Paul R. Rosen, was not so reticent. "William Burris was shocked at the underhanded conduct of the St. Charles Seminary in its conspiracy with his partner Main Line Health System as the events unfolded, and he remains so today," Rosen said.

When Burris learned in March 2013 that the archdiocese wanted to sell or lease the bulk of the seminary campus, he started working on a proposal for a mix of senior apartments, assisted-living units, and a facility, potentially in partnership with Main Line Health, where individuals could get short-term medical care after surgery or an illness.

Main Line Health executives appeared to be on board, but in August 2015 the health system decided to make the purchase without Burris.

"I've got to believe we can craft a much more attractive offer … and then get the land and sit on it until we decide what we want to do. We can't lose this one," Lydia Hammer, Main Line Health's senior vice president of marketing and business development, wrote in an email in September of that year.

In October 2015, Main Line's chief financial officer, Michael Buongiorno, sent Main Line board member Jim Buck an email – including Burris' slides and plans – on the proposal to buy seminary property for $26 million, $1 million more than Burris offered.

"Must say I'm not excited at the prospect (don't sense anyone is, really), but I understand the need to control our destiny, and guard our flank, by considering this seriously," Buck responded.

Main Line Health's offer eventually rose to $28.5 million for the lower 40 acres, with a $15 million option on the seminary's 29-acre upper campus, which is set back from the intersection of Lancaster and City Avenues, court records said.