The decision, approved by the 38-member council, followed an intensive study of the 42-year-old building which recommends the removal of asbestos in the ceilings and floors, installation of new heating and air conditioning equipment, and bringing the building into compliance with the Americans With Disabilities Act and new city fire and safety codes instituted in the wake of the terrorist attacks on New York City on September 11, 2001.

The council's resolution approved a spending ceiling of $31 million for the project, but asked the church's officers to continue in their search for the most advantageous sources of financing.

Renovation needs intertwined

At a meeting last February, council debated the project thoroughly, approved only replacement of the building's three elevators that will begin this month, and deferred making a final decision until the June meeting. In the meantime, a task force collected more information to help determine whether the project should go ahead.

"We looked at it all from many ways," said Josephine Hicks, a Charlotte, North Carolina lawyer who led the task force. "It soon became apparent that the renovation could not be done in stages without requiring repetitive construction labor costs that would double or triple the total cost. The needs are so intertwined," she said.

These needs include complying with safety, health and building code requirements; providing an accessible, security and healthy work place; and undertaking urgently needed improvements throughout the building.

The renovation is expected to begin in December and continue into late 2005. By reconfiguring staff space, 26,000 feet of space will become available for lease to outside organizations and businesses at fair market price. This rental income, estimated initially at $885,000 per year, will help to offset the overall cost.

Data changed his mind

A second member of the task force, Thomas Gossen of Wichita, Kansas, an architect with a structural engineering background who argued against the renovation last February, said he changed his mind as he collected data on the building and studied its problems.

"Basic safety systems are not compliant with safety, health and building codes," he told the council members. "Following 9/11, New York City codes will soon require that all buildings be fully equipped with fire sprinklers." Installing the sprinklers could not be done without ripping into floors and ceilings--which would require extensive asbestos abatement procedures. It is more cost-effective, Gossen said, to do the job all at once. "Asbestos-containing fire retardant insulation is delaminating and must eventually be removed and replaced," he said. "Currently, even simple maintenance requires expensive asbestos containment and air quality monitoring," at a cost of up to $4,000 each time the asbestos is disturbed.

Gossen also said the building has virtually no accessible facilities for disabled persons and no emergency standby power for exit lighting, elevators, fire alarms and computer servers. The latter problem became evident during an electrical blackout over the entire Eastern Seaboard last August, which left the building in darkness and crippled critical computer services for several days.

'Plain old good stewardship'

"We asked ourselves if this project would help the church's mission," said Hicks. "We concluded that it does. It's plain old good stewardship. We have an asset," she said, referring to the building in mid-Manhattan, which has had very little maintenance work in recent years. "We cannot let it just sit and deteriorate. That's not good stewardship."

One year ago, Presiding Bishop Frank T. Griswold and the Executive Council decided against relocating the church center staff in a new building on the grounds of General Theological Seminary in New York. Then they were confronted with what to do about the existing building that real estate investors had recommended be retained by the church, renovated, and leased, if staff offices were to be moved.

Kurt Barnes, the church's treasurer, said skeptics had been won over by the facts. "We worked with architects and engineers. We honed down the costs," he said.

He said "worst case scenarios" were developed, using conservative income estimates and the maximum interest that might be anticipated on the loans for finance the renovation. That amount totaled $29.9 million.

"Yes, you could defer the project," he told council. "But it will cost more, as much as two to three times more."

The task force proposed to finance the project with 100 percent bank financing and a 30-year amortization period. The annual cost would be close to $1.9 million per year, offset by expected income from leasing space. The council is also studying a proposal by which agencies, such as the Episcopal Church Foundation, the National Association of Episcopal Schools and the Church Building Fund, would pay a discounted rent, or assume a share in the capital costs of the renovation.