The lease will produce steady income for the cathedral for the duration of the agreement, the parties say, though it is unclear how much because the details are confidential. The cathedral will also essentially keep its parking lot; 70 spaces in the new building’s underground garage will be assigned to the church.

In a first-of-its-kind deal for the church in Boston, the Cathedral of the Holy Cross in the South End has signed a 99-year lease with a developer on a parking lot the cathedral owns at Harrison and Malden streets. The developer is transforming the parcel into a sleek 160-unit rental apartment building with ground floor retail space.

The Roman Catholic Archdiocese of Boston is experimenting with commercial development in an effort to leverage underused church real estate to pay for its ministries.


Deborah Dillon, director of property services for the archdiocese, said the deal could serve as a model for the church, whose parishes tend to be property rich but cash poor.

“We’re confident this will be successful, and we’ll see if we can replicate this in other parishes,” she said.

The archdiocese subsidizes 40 percent of the cathedral’s $900,000 annual budget, church officials said. Heating and maintaining the archdiocese’s mother church, which seats more than 2,000, is a significant burden. And the cathedral has been expanding its ministries for the poor, which include a free medical clinic and a food pantry.

“We have to come up with creative ways in which to help the parish sustain itself,” said the Rev. Kevin O’Leary, rector of the cathedral, who helped conceptualize the development deal.

O’Leary shares the cathedral’s modest rectory with Cardinal Sean P. O’Malley, who O’Leary said believes the cathedral should broaden its outreach to its neighbors, especially the needy.

“He wants the cathedral to be part of the city, and wants the church to be part of the city,” O’Leary said.


The neighborhood surrounding the cathedral is one of the city’s most economically diverse, with multimillion dollar lofts cheek-by-jowl with public housing projects. Showing a visitor around the cathedral recently, O’Leary greeted a homeless Haitian man hunched in a back pew, and invited him in French to move to the Blessed Sacrament Chapel, where it was warmer.

“At Christmas, the number of people we knew personally looking for some kind of assistance here was colossal,” O’Leary said.

The cathedral, whose weekend Masses were packed a half-century ago, slid into a long period of decline, and its pews emptied. But in the last decade or so, the cathedral has undergone a slow renaissance, and it now draws about 1,350 worshippers to Masses over the course of an average weekend, O’Leary said.

In addition to English- and Spanish-speaking congregations, it is home to a Ge’ez Rite (Ethiopian/Eritrean) Catholic community. It also offers the traditional form of the Mass in Latin.

Its size makes it a popular venue for large celebrations, particularly among the archdiocese’s ethnic communities; in the last year, Masses for Haitian Independence Day and for Vietnamese martyrs each drew more than 2,000 people, as did confirmation for the Brazilian community, O’Leary said. In 2013, Bostonians gathered there for an interfaith prayer service attended by President Obama in the aftermath of the Marathon bombings.

The lease agreement on the development, known as 600 Harrison Avenue, contains a clause requiring commercial use of the retail space to conform to Catholic social teaching. The developer, Peter Roth of New Atlantic Development, said the retail section will probably be a restaurant or cafe, which would not conflict.


Several specialists in Catholic ethics said they saw little risk in the development deal for the church.

“If they are able to take an asset to leverage it and create an income stream to create additional resources to help spread gospel and do the mission of Christ through a Catholic parish, I think that’s a great thing,” said Matthew Manion, president of the Pennsylvania-based Catholic Leadership Institute.

Kurt Martens, a professor of canon law at the Catholic University of America, said that a long-term commercial lease is a good strategy for putting property wealth to work while avoiding a sale.

“You are putting to good use the property you do not necessarily need right away without losing it forever,” he said. “Because once you sell it, you’ve lost it forever.”

Thomas H. Groome, a professor of theology and religious education at Boston College, said the last time he was in Stockholm, he stayed at a hotel built on part of a Lutheran church property.

“They said this is quite common in Scandinavian countries,” he said. “Churches are beginning to see some of their property is very often in a prime location, and maybe underused for mission – so why not lease it and make some money, then put money toward the mission?”

Terrence C. Donilon, a spokesman for the archdiocese, said the church would explore only commercial development in select situations where it would improve a parish and its surroundings. He said the archdiocese is not trying to become a commercial real estate developer using closed church properties.


The neighborhood associations near the cathedral have welcomed 600 Harrison, which has received required approvals from government entities.

Some of the elderly and disabled residents at St. Helena’s House, a housing development for elderly and disabled next door to 600 Harrison, are concerned that it will block their view and light, according to the manager there. The developer is offering some improvements to help compensate.

Most of the apartments in the building, to be completed in the late summer of 2016, will rent for around $2,500 to $4,500 per month, Roth said; 21 units will rent at below-market rates for those who meet income guidelines for affordable housing.

As construction on 600 Harrison begins, another project is getting underway: renovation of the cathedral’s exterior.

Next month, workers are scheduled to begin scrubbing 140 years’ worth of soot and grime from the neo-Gothic stone edifice, accumulated from traffic — including, for decades, a grit-spewing elevated train — along Washington Street.

The cathedral’s exterior renovation will also include fixes to crumbling masonry and the installation of bells from the former Holy Trinity (German) Church on Shawmut Avenue, replacing the small carillon that has chimed in the cathedral’s tower for five or six years.

A team led by Kevin Phelan — whose real estate firm, Colliers International, was appointed by the archdiocese to handle the sale of Holy Trinity — and Sean McGrath, of the real estate development and management firm Stonegate Group, who together brought the idea to O’Leary, has nearly finished raising $2 million in private donations to pay for the renovation.


Six of Phelan’s grandchildren were baptized at the cathedral; he said he has been concerned about the condition of the stonework on a building of great significance to Boston Catholics.

“The cathedral was never brought to where it should be, as the beacon,” he said.

Lisa Wangsness can be reached at lisa.wangsness@globe.com.