NEW YORK, Nov. 9, 2023 – The General Theological Seminary (GTS) today announced it was entering into negotiations with a Christian nonprofit to explore a long-term lease of the Close. Under the terms of the deal being explored, GTS would retain use of the parts of the Close required to deliver its highly successful hybrid Master of Divinity (MDiv) program, including Dodge Hall, the Keller Library and the Chapel of the Good Shepherd, in perpetuity, as well as access to Hoffman Hall and Sherred Hall. The rest of the Close would be leased to the nonprofit to generate income to support the Seminary’s mission.
As part of the agreement, the nonprofit would restore the exteriors of all the GTS owned buildings on the Close, including the Chapel of the Good Shepherd, cover the expenses of the Close, and pay GTS an annual rent. The arrangement would create income for GTS, enabling it to support and potentially expand its programs. GTS would continue to own all of the land and buildings.
The need to explore a leasehold arrangement has arisen as GTS is facing cashflow challenges. In fiscal year 2023, GTS’ operating expenses were $7.8 million, against an annual income of $4.3 million. The Seminary also has no funding source for any emergency capital expenditure, or deferred maintenance, which is estimated to be in excess of $32 million.
The decision to move forward with negotiations with the nonprofit received unanimous backing from the GTS Board at its meeting this week. While a number of different options have been explored, including selling the Close and leasing it to a property developer, it was felt the nonprofit represented the best option in terms of mission alignment and potential income.
The Christian nonprofit with which GTS is negotiating was founded with the aim of revitalizing the choral tradition in worship services. If GTS moves forward with the lease agreement, it would lead to a return of regular worship services in the Chapel of the Good Shepherd, many of which would be livestreamed. The arrangement also creates the possibility for potential programing synergies.
Under the arrangement, GTS would continue to offer its highly successful hybrid MDiv, which
retains the GTS hallmarks of academic rigor and a focus on liturgical, theological, and spiritual formation in the Anglican tradition in an ecumenical context, out of the Close. The program is oversubscribed, and GTS currently has more MDiv students than it has had for the past decade. The Very Rev. Ian S. Markham, Ph.D., President of GTS, said: “GTS has started a conversation with an interesting Christian nonprofit. We are in a position where we can share the Close with a strong nonprofit partner, with whom we can potentially create some exciting, shared programming. We are seeking to model the use of resources for the future of the Church.”
GTS entered into an Affiliation Agreement with Virginia Theological Seminary in 2022. Under the agreement, the two seminaries operate as separate entities, retaining their own accreditations, endowments, and boards, but sharing an overlapping governance structure, executive leadership team, and a range of shared services. The agreement prohibits the subsidy of one institution by the other.
Earlier this year, GTS set out its plans for the future, which have the three core aims of expanding its hybrid MDiv that responds to the changing needs of the church, tackling previously deferred maintenance on the Close, and establishing a new business model to ensure its long-term financial stability. The opportunity currently being explored delivers on these aims.