For 54 years, Loretto High School was one of the region’s most beloved Catholic educational institutions. When the nuns who ran the school decided to close it last year, they set off an ugly feud. Here’s a look at the closure and its aftermath.
Outwardly, it was a typical Tuesday morning at Loretto High School. Students dressed in the school uniform—pleated blue, green and black plaid skirt, collared shirt and sweatshirt—chatted in the hallways. In classrooms throughout the 9-acre campus, teachers called classes to order. It appeared like business as usual at the 54-year-old all-girls Catholic school on El Camino Avenue.
But there was a solemn undercurrent at school that day—a “weird feeling,” as one student put it. For several weeks, a rumor had circulated that the school was in financial trouble. That past weekend, the school had held its annual entrance exam for eighth-graders interested in attending Loretto in the fall; only 80 girls showed up. On Tuesday morning, Mr. Tsai, a popular math teacher, told his students there would be an assembly later that day. “Bring tissues,” he said.
At around 11, classes halted for morning break, a 15-minute breather during the first half of the day. Normally, girls sat at tables in small groups to talk, snack or study. This day, they milled around uncertainly. Some were in tears.
During the break, a voice over the loudspeaker ordered everyone to the gym, which doubled as the school’s assembly hall. Students filed in and found places on the bleachers, where they sat by class: seniors, juniors, sophomores and freshmen. They waited for what seemed like a long time, falling silent whenever one of the school’s administrators entered the gym. Finally, Sister Helen Timothy—the school’s president and longtime principal—arrived. There was expectant silence as she walked to the center of the gym floor, holding a microphone. Her face was hard to read as she began to speak.
Loretto would close at the end of the school year, she said. It had been a difficult decision. The nuns who ran the school had done all they could to save it. They had no choice. She gave the bad news quickly, with no visible emotion—like ripping off a Band-Aid, one girl recalled.
Call your parents to pick you up, Sister Helen continued. School was canceled for the rest of the day.
Students fell into each other’s arms and sobbed. Teachers cried, too. Eventually they began streaming outside into the cold, crisp air. Television reporters were already there with cameras and microphones. Shellshocked parents were also beginning to arrive. There was an air of disbelief. How could this happen to their beloved Loretto?
For some people at the school that day, other questions were beginning to form. Why had this happened? Whose fault was it? And was it too late to put a stop to it?
Starting that day—Jan. 27, 2009—the Sacramento community reacted with a range of emotions to the news of Loretto’s closing. For some, there was sadness, even grief, at the passing of a local institution. Loretto first opened for business in 1955 as a Catholic college-preparatory high school for young women. The school’s founders, an order of nuns called the Institute of the Blessed Virgin Mary, educated their students in the spirit of Mary Ward, a 17th century Englishwoman who believed that women were men’s intellectual equals and should be taught accordingly. Ward’s motto, adopted by Loretto High School: “Women can do great things.”
The school was the smallest of the region’s four longest-operating Catholic high schools. It appealed to girls who wanted a kinder, gentler approach to academics than St. Francis High School, the high-powered all-girls school in East Sacramento, offered.
Loretto did things just a little differently from other high schools. For their graduation ceremony, seniors wore floor-length white bridal-style dresses and carried a spray of long-stemmed red roses. There were well-loved traditions like the mother-daughter fashion show and Senior Lawn—a grassy spot on the campus where only seniors were allowed and where, on sunny days, they would spread out blankets and lounge chairs. On Senior Snow Day, girls would drive up to Tahoe and bring back truck-loads of snow to dump on the grass.
Over the course of five decades, more than 4,000 young women had passed through Loretto High School, including members of some of Sacramento’s most prominent families. Maureen Reagan sent her daughter to Loretto. So did former Kings coach Rick Adelman. For many alumnae and their families, the notion that Loretto would cease to exist was unthinkable.
In the days and weeks after Sister Helen’s announcement in the gym, sadness and disbelief gave way to other emotions. Hopefulness, for one. A group of parents and former students began working behind the scenes to save the school. But as that dream faded, hope was replaced by anger and a sense of betrayal.
The anger was directed at the nuns who ran the school. Based in Wheaton, Ill., the IBVM order is made up of about 80 nuns, many of them elderly. After years of operating schools, the nuns wanted to retire. Decades ago, they would have been replaced by young-er nuns. But it’s been many years since significant numbers of young women have join-ed religious orders like the IBVM. In the year 2009, theirs was an unsustainable business model. There literally was no one to take their place.
In Sacramento, the situation began to resemble an ugly family feud. There were accusations of bad management, bad faith and worse. Like many family feuds, this one came down to one thing: money.
Specifically, what had happened to all the money in Loretto’s coffers? Throughout the past decade, the school had raked in millions of dollars from local donors. The money ranged from small amounts given by individuals to hundreds of thousands of dollars donat-ed by a handful of wealthy patrons. Much of the money—close to $5 million—went toward an extensive expansion of the school. Another large chunk—more than $1 million—went into an endowment fund designed to provide scholarships for needy students.
Shortly after announcing their decision to close the school, the IBVM nuns put Loretto on the market for $10.3 million. Within a few months, a charter-school group snapped up the recently renovated property for a reported $8 million. After paying off school debts and the sales commission, according to a diocese source, the nuns stood to pocket about $3 million.
For some members of the Loretto community, that sale was the final straw. In June, a group of longtime donors sued the IBVM nuns, charging they had “invaded” the school’s funds and used donor monies unlawfully. In a startling move, the head of the Sacramento diocese, Bishop Jaime Soto, joined the lawsuit as a plaintiff.
It has been 43 years since Jeanne Anderson-West graduated from Loretto High School. But she still considers herself a Loretto girl.
The connection to Loretto runs deep through her family. Her five sisters attended the school, as did two of her cousins and four of her nieces. Her mother, Mary Anderson, was a major donor, giving $100,000 to the school’s capital campaign and $30,000 to its endowment. So were her aunt and uncle, Agnes and Walter Anderson, who gave a half-million dollars for the construction of a science center named in their honor.
“I’m still in shock that Loretto closed,” Anderson-West said nearly a year after she first learned the news. Tall and rangy, with a headfull of curls, Anderson-West remained involved with Loretto long after she graduated with the class of ’67. In recent years, she ran Loretto’s high-profile auction and co-chaired its capital campaign. “I have so many wonderful, wonderful memories of Loretto,” she said, “and I wanted every young woman who was able to have the same opportunity I had.”
On Friday, Jan. 30, 2009, Anderson-West attended a rally organized by a former student. Hundreds of people showed up, some carrying signs that read “Loretto Is Our Home” and “Help Us Save Loretto.” Anderson-West, accompanied by her aunt and her mother, grabbed a microphone and spoke movingly about her alma mater.
The rally was a public show of support for Loretto. But behind the scenes, Anderson-West was talking with influential members of the Loretto “family” about staging an intervention. Their goal: to get the nuns to agree to keep the school open for one more year, giving the group time to find someone to buy or take over the school.
Along with Anderson-West, the Save Loretto steering committee included Tom Storelli, executive director of the law firm Downey Brand; Peter Scheid, a senior VP with Morgan Stanley Smith Barney; Eric Berghoff, who worked in finance at Intel; Jan Scully, Sacramento County’s district attorney; and Kathy Dana, owner of a marketing and advertising firm. It was a savvy, well-connected group of heavy hitters.
The group came up with a working business plan. It would keep the nuns at the school’s helm for another year while operating expenses were restructured. Most of the teachers would be retained while some administrators would be let go. To cover operating deficits, the group would go to Loretto’s loyal donor base to raise between $1.5 million and $2 million. (One donor reportedly pledged a half-million dollars.) They would also establish an annuity for the aging IBVM sisters.
There was only one problem: They needed to present the plan to the nuns in Wheaton. Anderson-West and Berghoff offered to fly to Illinois to meet with Sister Rosemary Lynch, the head of the order. She turned them down, saying that she was too busy and that she would meet with them when she came to town.
When she joins the order, a nun takes vows of poverty. She works for little or no pay. What little she does earn, she shares with her sisters. When she stops working, she doesn’t collect a pension. There’s no 401(k).
Nuns are, in effect, cheap labor. As long as there was a steady supply, Catholic schools didn’t have to pay market rate for teachers and administrators. That started to change when women virtually stopped joining the convent several decades ago.
In 2006, a study warned of an impending financial crisis that threatened many U.S. Catholic religious orders, particularly nuns. According to the study, conducted by the National Religious Retirement Office, only 4 percent of nuns have enough money for retirement. This “nun crisis,” the study said, inevitably would force religious orders to sell off assets.
In 2009, that crisis hit Loretto High School. In an op-ed published by The Sacramento Bee in March of that year, Sister Rosemary explained that, in Loretto’s early years, the nuns taught at and ran the school without salary. “Unfortunately, Loretto is one part of a difficult story that has unfolded throughout the Catholic education community,” she wrote. “As the number of religious sisters, brothers and priests has declined during the past few decades, this ever-shrinking pool of talent and devotion to education . . . made it increasingly difficult—and now impossible—to keep Loretto open.”
A shrinking order wasn’t the only problem. Enrollment, at 560 students only three years earlier, had declined by 2009 to 389 students. The annual entrance exam had once attracted 175 prospects. In 2009, that number was down by more than half. Tuition, about $11,000 a year, wasn’t enough to cover the school’s operating expenses.
In her Bee commentary, Sister Rosemary called the decision to close Loretto “difficult and heartbreaking.”
Bishop Soto may be the top-ranking church official in Sacramento. But he learned of the school’s closure only one day before the nuns announced it. That’s perhaps not as unusual as you might think. The nuns had an arm’s length relationship with the diocese.
By the middle of the 20th century, the Catholic Church was opening schools at a breakneck pace around the country to educate growing numbers of baby boomers. In 1955, the Sacramento diocese gave the IBVM nuns five acres of land on El Camino Avenue to build and run a school. Later, in the ’80s and ’90s, the diocese gave them another four acres, plus money for an expan-sion that was completed in 2003.
But unlike St. Francis, which is owned by the diocese, Loretto was not a diocesan school. It belonged to the IBVM. In that way, it is like two other Sacramento Catholic schools: all-boys Jesuit and co-ed Christian Brothers.
That independence sometimes created friction between the nuns and the diocese. The most notable example: the Marie Bain incident. In 2005, a Loretto sophomore saw Bain, then the school’s drama teacher, escorting women into Sacramento’s Planned Parenthood clinic. She told her mother, a pro-life “sidewalk counselor,” who took photos of Bain outside the clinic and sent them to Bishop William Weigand. In response, Weigand ordered Loretto to fire Bain for bucking church doctrine on abortion. While the nuns didn’t report to the bishop, they were required under canon law to obey him in matters of Catholic teaching.
Soon after the firing, Sister Helen expelled the student and barred the student’s family from the campus. In the local Catholic community, it was seen as a defiant act. Not that everyone disapproved. In fact, many people at Loretto were proud of Sister Helen for her loyalty to Bain.
By the time Soto became bishop in November 2008, relations between the IBVM and the diocese were strained.
At the end of February, the Save Loretto committee finally presented its business plan to the nuns from Wheaton.
On Feb. 25, they met with Sister Rosemary and two other nuns from Wheaton, who had come to Sacramento to discuss the school’s future. The group gathered in the living room of a house on Chadsworth Way, home to one of the local IBVM nuns, and started with a prayer. Then, one by one, the commit-tee members spoke about what Loretto meant to them. The atmosphere was tense and emotional. Tears flowed freely. Finally, Storelli and Berghoff went over the plan. The nuns asked questions. Sister Rosemary promised to consider the proposal. The group made plans to meet again two days later.
“There was still a sense of hope,” recalled Kathleen Campini Chambers, a local PR executive who handled public relations for the steering committee. A Lo-retto graduate, she thought the door was still open to compromise with the nuns.
But when they reconvened on Feb. 27, those hopes were dashed. Sister Rosemary said there would be no further negotiating. The school would close. Adding insult to injury, after they left the meeting the group discovered that the nuns had already released the news to the media. “We were pissed,” said one person who was present that day.
Members of the steering committee later said they felt Sister Rosemary had made up her mind long before she met with them. “We had a nagging feeling that the door was never really open,” said one.
Talk to the people involved in this story and you can’t help but come to one conclusion: Faulty comunication was largely to blame for the ill will surrounding Loretto’s closure.
Over and over, the people I interviewed for this story (close to two dozen) said the same thing: The nuns never raised the alarm that Loretto was in trouble. Said someone who is familiar with the diocese and its workings, “We didn’t know there was a [money] problem.” He called it “a textbook example of dysfunctional communication.”
Once the nuns made the decision to pull the plug, said those who dealt with them during this period, they simply weren’t open to any other option. “They wouldn’t communicate with us,” said Scully, who served on the Save Loretto steering committee, echoing others with whom I talked. “If there had been any way to have communication with them, we would have grabbed the opportunity.” But, she said, the committee never got any traction with the nuns.
The sisters’ rush to sell the school put those working to save Loretto in a tough spot. Neither the steering committee nor the diocese had enough time to make an alternative plan work. “They gave us no time to do anything,” said Scully.
The next several months were a trying time for the Loretto community. Students scrambled to find a place for the coming school year. St. Francis offered to take 50 girls. Christian Brothers announced it would take all comers.
Meanwhile, everyone still had to get through the end of the school year. At times, Loretto felt like a dead school walking. Once, Sister Helen took what looked like a group of prospective buyers on a tour of the campus, upsetting students. The next day, enraged parents called the school to complain.
In May, Aspire Public Schools bought Loretto and announced it would open an elementary school in the fall. The sale, said an observer, was “a double screw-you” gesture by the nuns. Not only had the nuns thwarted the effort to keep Loretto in Catholic hands, but the sale to a free public charter school, the source said, also threatened the continued existence of St. Philomene, the Cath-olic elementary school next door, which charges tuition.
For some, the sale alsoraised a question. What about all the money that had been donated to Loretto over the years? The nuns made it clear they intended to pay off Loretto’s outstanding debts and use the rest of the money to care for the order’s retired members in Illinois. Donors were outraged. The bishop was concerned. He believed he had a duty to make sure that at least a portion of the proceeds remained in Sacramento, with the money used as donors had intended: for the Catholic education of local high-school-age women.
In June, Soto and seven donors—Anderson-West, her mother and aunt, plus local businessmen Robert Biko, John Frisch, Kent Daft and Bruce Stimson—sued the nuns in Sacramen-to Superior Court. They didn’t seek to stop the sale. Instead, they asked the court to hold the proceeds in escrow and assign an arbitrator to determine how to allocate the money.
Biko knew a lot about the way the school operated. He had served on the school’s board of trustees and co-chaired the capital campaign. Launched in 1999, the campaign raised nearly $5 million. In the late ’90s, he helped revive the school’s endowment, which was worth about $1.5 million by mid-2008. He also chaired the endowment’s board of trustees.
In a declaration filed with the court, he charged that “persons associated with the Loretto High School corporation” withdrew funds from the endowment trust to repay debts and pay routine operating expenses, in violation of the trust guidelines and the donors’ intentions. “At no time was I asked as chairman of the Loretto endowment to consent to the use of the endowment earnings or principal to pay operating expenses and debts, nor would I have ever consented to invading the prin-cipal for this purpose,” he declared.
Sacramento attorney James Sween-ey represents the group suing the nuns. Early in the case, he tried to depose Sister Helen. The defense refused to produce her for questioning. He subpoenaed the nun, but the defense attorneys successfully filed a motion to quash the subpoena. “I’ve been a church lawyer for years,” Sweeney said. “I’m truly at a loss to explain what’s going on.”
Sweeney said the case, which is still pending, could have ramifications far beyond Loretto. A ruling against the diocese and the donors, he said, would set a bad precedent for local churches, charities and nonprofits—any organization that relies upon donor largesse. Said Sweeney, an adverse ruling would “shake donor confidence,” because donors wouldn’t be able to rely upon charities to use their money the way they intended.
As summer turned intofall, many in the Loretto community moved on. Students went to new schools. Teachers found other jobs. But a sense of lost opportunities still lingered.
Some people traced the beginning of Loretto’s end to Sister Helen’s decision, several years earlier, to halt many of the school’s signature events: the auction; the family barbecue, a “fun- and friend-raiser” that brought people together; weekly liturgies at the school. “Somewhere along the line, these things started to disappear,” said Julie Mietus, a Loretto parent who also worked as the school photographer. Mietus and others believe the loss of these community-building events fatally weakened the school.
Sister Helen, once admired for her strong management style, is now persona non grata with many former Loretto people. “She’s Helen Timothy to me now,” said one. “I don’t call her Sister Helen anymore.”
Some refused to bad-mouth the woman who had once led Loretto. Jan Scully is one of those people. “Sister Helen gave so many years to that school. She loved that school. She loved the girls,” said Scully, who herself attended Loretto in the late ’60s.
Her association with Sister Helen goes back to those days. Then, Sister Helen was also a Loretto student, fun and full of life. When the diocese and donors filed their lawsuit, Scully e-mailed her former schoolmate. “I said I won’t be a part of [the lawsuit], because that’s not the way I want to remember Loretto,” Scully recalled. “And I thanked her for all that she did.”
Today, Scully is philosophical about the events surrounding Loretto’s last days. “At some point,” she said, “you just have to let it go.”
But many don’t share her equanimity. “This didn’t have to happen,” said a mournful Anderson-West. “I just don’t understand.”
There are two sides to every story. The IBVM nuns have chosen not to tell theirs—at least not to the satisfaction of many in Sacramento’s Loretto community.
I tried to interview the nuns’ attorney, Russell Austin, with the Sacramento firm Murphy Austin Adams Schoenfeld LLP. Through the firm’s marketing director, he refused. I also spoke twice with Chris Holben, an executive with the local PR firm Runyon Saltzman & Einhorn, which briefly represented the IBVM nuns. He, too, was unable to get anybody connected with the nuns to tell their story.
One day this past November, I called Sister Rosemary at her office in Wheaton. She took my call but would not discuss the events that led to Loretto’s closure. Her attorneys, she said, had advised her not to.
I also called Sister Helen, who lives in Carmichael at a convent run by Our Lady of the Assumption. She responded brusquely when I said I was writing about Loretto High School. “There isn’t a Loretto High School,” she said.
I tried again, saying I was writing about the end of a much-loved school and hoped she’d be willing to talk about it.
“No. I’m pretty sure you talked to my superior and she told you that.”
Well, yes, I said. Sister Rosemary had refused to talk to me. But I wanted to give Sister Helen a chance to tell her side of the story.
I tried again. May I ask what you’re doing now, I said.
“You’re still on the phone,” I said. “You haven’t hung up on me. That leads me to think maybe you really do want to talk.”
“No,” she said. “I’m just being polite, letting you know the high school is closed.”
That was it. We both hung up.
Earlier, I’d asked Sister Rosemary if she had anything at all to say about Loretto High School. She paused before speaking. “Obviously, I think the school was a wonderful thing,” she said softly. “It was a great loss.”