In addition to the Archbishop Walsh campus, the diocese owns the buildings and grounds of Cardinal O’Hara High School in the Town of Tonawanda, St. Mary’s High School in Lancaster, Bishop Timon-St. Jude High School in Buffalo, Notre Dame High School in Batavia and DeSales Catholic in Lockport.

Other properties potentially in play to be sold as part of a settlement include vacant parcels in Hamburg, Grand Island and Dayton; various city parking lots and garages; three priest retirement homes; the Catholic Center on Main Street; Christ the King Seminary in Aurora; and St. Joseph Cathedral on Franklin Street.

The school buildings are an example of how complicated the Buffalo Diocese’s operations and finances are. The diocese ran the high schools for many years until the early 1990s, when each of the schools became independent entities, run by their own school boards and with separate charters from the state Board of Regents. The diocese held onto the buildings and agreed to lease them for $1 per year to the independent schools, which were expected to set their own policies and tuition rates, develop curricula and maintain the buildings. The diocese continued to provide an annual subsidy to the high schools that was at one point more than $2 million overall but shrunk in 2019 to less than $500,000.

Other area Catholic high schools, including Nardin Academy, Canisius and Mount Mercy in Buffalo; Sacred Heart in Amherst; St. Joseph’s Collegiate Institute in the Town of Tonawanda; Mount St. Mary Academy in Kenmore and St. Francis in Athol Springs, were founded and run by non-diocese entities and do not have buildings owned by the diocese.

The diocese’s lawyers said selling the Archbishop Walsh building to the school’s foundation was “the best and only opportunity to realize value from the property” because it needs an expensive new roof and because the high school’s $1 per-year lease runs through 2041.

Thomas J. Manko, Archbishop Walsh president and principal, said in an email response to The News that the decision to buy the building and grounds was unrelated to the diocese’s bankruptcy. School officials first approached the diocese about it in January 2019, more than a year before the bankruptcy filing, he said.

“We felt that it would be easier to approach benefactors for major contributions if the school was owned by a Walsh affiliated institution instead of the Diocese of Buffalo. The purchase itself will be funded through donations from such benefactors,” said Manko. “We feel that our foundation purchasing the school and the school controlling its own destiny is in the long-term best interest of Archbishop Walsh, its students, staff and faculty.”

Manko also said the negotiated price of $150,000 was a “fair deal” and “reflects what the market will bear.”

But a lawyer for the creditors committee called the deal “fraught with the badges of fraud” and urged Bucki to nix it.

The diocese’s primary obligation in bankruptcy is to maximize the value of its estate for creditors and that it had failed to do so by undervaluing the property with an “as is” appraisal, said attorney Ilan D. Scharf.

“The sale has not been negotiated in good faith. It is an insider transaction at a price that is in all likelihood depressed based on the actions of the high school and because it relies on an appraisal designed to obtain a lower value,” Scharf said. “The diocese is clearly more concerned about the high school’s ability to continue using the property than with maximizing value for the benefit of creditors.”

Bucki is expected to hear arguments Wednesday on the proposed sale.

What happens with the Walsh buildings raises questions about the future of all the former diocese-sponsored high schools. None of the schools is flush with cash and most have struggled over the years to maintain enrollments, as the population of school-age children in Western New York has continued to slide downwards. Multiple calls to the principals or presidents of Timon, O’Hara, St. Mary’s and Notre Dame were not returned.

In court papers, the diocese listed appraised values of $315,000 for the Walsh property and $1.5 million for the Timon property in South Buffalo. It didn’t list values for the O’Hara, St. Mary’s and Notre Dame properties. Nor did it include a value for the DeSales building, which formerly housed a high school and now is home to a regional Catholic elementary school.

The diocese’s most valuable appraised property, according to court papers, is the Catholic Center, its main administrative building at 795 Main St., the former home of the Courier-Express newspaper. The diocese said the property, located in the city’s booming medical corridor, was appraised at $9 million. The diocese said most of the properties haven’t been appraised, but it did list book values for some of the properties, including $3.6 million for its three priest retirement homes and $2 million for a Newman Center near the University at Buffalo in Amherst.