Episcopal Diocese of Chicago nears agreement to sell Streeterville site to cathedral next door

The Episcopal Diocese of Chicago has a deal to sell its Streeterville headquarters to its neighbor, the denomination's St. James Cathedral, possibly ending a years-long quest to sell the office site for a posh high-rise development.

Both sides said Thursday they have agreed to a letter of intent, a promise to negotiate final terms. Such a step is not binding and could break down, but church officials said it demonstrates a resolve to cooperate for the good of the denomination.

The Episcopal Church and the cathedral, considered the “mother church” for a diocese covering much of Illinois, had been unlikely antagonists over the sale of 65 E. Huron St., on the southwest corner of Huron and Rush streets. With a five-story office building and a plaza called Saint James Commons, the property had been in developers’ sights for years but economic trouble from the mortgage crisis to the pandemic thwarted deals.

Problems also arose from the cathedral at Huron and Wabash Avenue next to the office site. A sale to a developer could pose a financial hardship for the cathedral, its leaders said in 2022, because its mechanical systems are on the office site. Without financial relief, the cathedral warned it may have to close.

Those worries now could be moot.

The Very Rev. Lisa Hackney-James, cathedral provost, said Thursday the congregation will intensify a fundraising campaign to support the acquisition. She said the cathedral plans to retain the office building but must research optimal uses.

“There is absolutely no intention to develop this property,” she said.

Hackney-James said the negotiations with the diocese have a spirit of collegiality and common purpose. “We do believe we have the wind at our backs for getting this done,” she said.

In a message to church members, Episcopal Bishop Paula Clark lauded the tentative agreement as “healing the wounds of the past and envisioning a shared future for our ministry at the corner of Rush and Huron and across our entire diocese.” Clark came to the diocese in 2022 and restarted sales discussions that frustrated two prior bishops.

Neither side would talk about a possible sales price. Clark said she hopes a sale can be completed “in the coming months.” The bishop was unavailable for an interview.

In 2008, the diocese was said to have a $20 million offer from a developer who wanted to put up a 64-story Canyon Ranch condo and hotel tower, promised then as among the most exclusive projects in Chicago. But the developer couldn’t sell the condos.

The diocese always described the property sale as crucial for its finances. As with many mainline churches, the diocese has seen its income from congregational pledges decline with fewer people attending church.

It has previously said the office building was costing $750,000 a year and was no longer essential for staff work. To support overall operations, the diocese reported that it must draw nearly $560,000 from an endowment this year, a withdrawal rate that could exhaust the fund by 2030.

Hackney-James said final terms of the sale will serve the interests of both the diocese and the cathedral, allowing both to vigorously pursue their mission. She noted that the cathedral uses 65 E. Huron for its own offices and a parish hall.

The St. James congregation predates the 1871 Chicago Fire, which destroyed the sanctuary but spared the bell tower. The rebuilt church opened in 1875. The bell tower was kept and still bears soot from the blaze.

The Episcopal Diocese covers more than 120 congregations in northern and western Illinois.