It seems unlikely that a Catholic priest would be concerned with the financial problems of a local community bank.
But with nearly $30 million in financial assistance on the line from Park National Bank, Rev. Christopher Devron, president of Christ the King Jesuit College Prep School, was just a little apprehensive.
“We were concerned when we learned that the bank was going to be under receivership and have a new owner,” Devron said. “Our concern was not having the assurance that they will continue all the commitments …”
Park National Bank, headed by philanthropist Mike Kelly, invested $30 million to help open the West Side’s first Catholic school in 80 years. When the bank fell victim to the subprime mortgage lending crisis, the federal government seized the former Oak Park-based bank, subsequently selling it to Minnesota-based U.S. Bank in October.
Devron was uncertain if the new owners would honor the financial commitments made by Kelly. But after several meetings with U.S. Bank officials, “they substantially honored every single commitment that Mr. Kelly made,” he said, noting that there were a few exceptions.
“We worked hard to present to them a case of why we felt this was a worthwhile project,” he added. “They took a hard looked at us and believed in our ability to succeed. It is like a big vote of confidence in us, and we are thrilled to have that vote.”
Devron explained bank officials wanted to know if Christ the King was a sustainable model for college preparatory school. The school is sponsored by the Christo Rey Network of Schools, which operates 22 other schools across the country, including one in Pilsen. Most of the students’ tuition is underwritten by corporate sponsorships.
Park National originally committed $22 million in a no-interest loan to help fund the school’s new West side facility, located at 5058 W. Jackson. Additionally, the bank provided a $2 million operating line of credit and pledged $6 million for the school’s capital campaign. Devron noted that the bank folded before Kelly could make good on that pledge.
But U.S. Bank honored the line of credit and the no-interest loan, while offering $4 million in direct support, of which, $2 million comes in the form of a matching grant. The grant will help offset the school’s $27 million construction cost, leaving Christ the King $13 million left to raise.
“We were distressed to lose Park National, [but] we were excited to see that another institution found our mission and our model compelling,” Devron said. “It was a reaffirmation that there are other partners out there who are persuaded by the good that could be done with this school.”
U.S. Bank also will fund eight additional jobs for Christ the King students. The bank already assumed four jobs agreed to by Park National, bringing the total of 12 student jobs. Part of the school’s mission is to prepare students educationally as well as for the workforce. Students work at area businesses and institutions where their earnings help cover tuition.
The eight additional jobs will be farmed out to local nonprofits, where U.S. Bank plans to underwrite the students’ salary to the tune of $2 million over the next eight years.
While U.S. Bank solidified their relationship in early April, it began to gel at the school’s dedication in January. Steve SaLoutos, executive vice president of U.S. Bank’s Midwest metropolitan banking group, attended the event. He said he was impressed by the school’s commitment to high quality education and the support from residents and staff.
Continuing the Park National’s commitment to Christ the King was “the right thing to do,” he said. It also shows the bank’s willingness to be a “bigger part of the community” to help it grow and prosper, said SaLoutos, who visited the school three times this year.
“If you look at the history of how U.S. Bank has been supportive of the other communities, I think you’ll find we have a good history,” he said. “Give us a chance to show what we can do and how strong of a partner we can be.”
Rev. Ira Acree, pastor of Greater St. John Bible Church, applauded the U.S. Bank’s pledge to fulfill Park National’s commitment. Acree was among several community residents concerned about the take-over. Park National has a history of supporting schools, clinics and nonprofits in Oak Park and Austin.
“I now only hope that U.S. Bank would continue their good will and sit down with community groups and families, so that we can work together to stem the tide of the foreclosure crisis in our communities,” Acree said.
Lisa Clark, a U.S. Bank’s spokesperson, said the bank also plans to use $50 million in tax credits given to Park National to help small businesses.
“We were able to work out some ways to make sure that continued, because we know how important it is to bring businesses to the area,” she said. “Those tax credits should be able to make sure that happens.”