Lapse in the Apse

Law enforcement sources confirm that both Federal and State prosecutors have begun probes into the financial irregularities that brought construction of the St. Nicholas Greek Orthodox Church, within the World Trade Center complex, to a halt in December.

As first reported in a story that appeared in the National Herald, a newspaper that focuses on Greek-American affairs, a deficit of as much as $15 million is under scrutiny, but neither the U.S. Attorney’s office nor the State Attorney General’s office will confirm whether the inquiries are civil or criminal in nature.

Widely anticipated for years as Lower Manhattan’s newest landmark, construction work came to a halt four months ago at the domed edifice designed by celebrated architect Santiago Calatrava.

Skanska USA, the prime contractor leading the effort to rebuild the Church — the only house of worship that was entirely destroyed during the terrorist attacks of September 11, 2001 — issued a letter to its subcontractors, advising them that the firm had terminated its contract with the Greek Orthodox Archdiocese (GOA), “on account of GOA’s defaults in making payment under the Owner Contract.” The same letter notified all subcontractors that, “effective immediately, you are directed to stop all Work under the Subcontract.” In the weeks since, activity at the site has been limited to contractors entering to remove equipment, while security personnel secured the area.

This development followed a year of fiscal crises and financial scandal within the Greek Orthodox Church, which acknowledged last October a deficit of more than $8 million, while announcing the layoffs of dozens of employees, and the departure of the organization’s longtime financial overseer, Jerry Dimitriou.

In November, the Archdiocese announced the formation of a Special Investigative Committee for St. Nicholas National Shrine, “to investigate and evaluate expenditures related to (1) the St. Nicholas Shrine construction project, and (2) the potential use of certain St. Nicholas Shrine restricted funds for the payment of Archdiocesan general operating expenses.” Among the members of this panel are Battery Park City Authority (BPCA) chairman Dennis Mehiel, who is a prominent philanthropist and widely respected leader among the Greek-American community. Mr. Mehiel was also among the primary advocates and fund-raisers who pushed for the reconstruction of St. Nicholas. It appears to be this Committee that shared word of possible funding breaches with State and Federal prosecutors.

Like many rebuilding projects in and around the World Trade Center site, the effort to reconstruct the St. Nicholas Greek Orthodox Church has struggled with spiraling costs. Originally budgeted at $20 million when a final design by Mr. Calatrava was announced four years ago, the price tag for the church has swollen to an estimated $78 million.

These overruns have come in spite of a remarkably generous deal from multiple government agencies that have subsidized the project by providing the free use of public land that is worth hundreds of millions of dollars. Multiple arms of government — including the Battery Park City Authority and the Port Authority of New York and New Jersey — partnered on a complicated 2005 deal that kept the Church (which was flattened by falling debris from the Twin Towers) at Ground Zero. The site chosen for the new Church is publicly owned, and leased by the Greek Orthodox Archdiocese from the Port Authority. The terms of this lease, which were announced in September, allow the St. Nicholas Church to remain on government-owned land at Ground Zero for a minimum of 198 years, in exchange for a nominal rent of $1 per year. This lease also provides for one optional renewal period of an additional 99 years. Under these terms, the church’s position is secure through the year 2314. But rather than pay $297 in rent for the next three centuries, the Church also has the right to buy the space, also for a price of $1.