State Sen. C. Anthony Muse told The Gazette this week that he and his wife mortgaged their own home to help the 2,500-member church he leads ride out its financial problems.
Muse is founder and senior pastor of Ark of Safety Christian Church, which filed for bankruptcy protection last week.
Muse (D-Dist. 26) of Fort Washington said Ark of Safety’s finances have been battered, as have the bank accounts of many in its congregation, by the economic downturn.
That is why the Upper Marlboro church board and members voted June 5 to file for Chapter 11 protection, according to a statement from the church’s board of directors.
Bankruptcy papers, citing debts of between $1 million and $10 million, were filed with federal bankruptcy court in Maryland the next day.
“The filing will permit the church to realign mortgage debt on our worship facility so that we can continue to provide a place of worship, fellowship, respite, support and service to our families, members, and our Prince George’s County community,” according to the statement.
As the church has grown, its operational and administrative expenses have increased, including the cost of utilities and transportation gasoline, “at a time when our members are already digging deep,” the statement said.
Bankruptcy filings noted that the church owes $610,000 to Muse and his wife, Patricia Lawson Muse, a news anchor with WRC-TV in Washington, who is listed on the church’s website as its “first lady.”
Muse said he and his wife “are not pushing to get [the money] back,” but the bankruptcy filing required that loans to the church be listed.
According to Muse’s financial disclosure statement filed with the Maryland State Ethics Commission, he and his wife own, in addition to their home in Fort Washington, an unimproved lot in Fort Washington, a vacation home in St. Mary’s County and a rental property in Silver Spring.
The church’s other creditors include American Star Financial of Rockville and the Greenbelt law firm of Joseph Greenwald & Laake, each of which is owed $250,000.
Muse, whose church title is “bishop,” said the facility is hoping to get a consolidated loan to help recover from debts that “ballooned” to carry large interest rates.
“I don’t think it will be difficult to get the loan, given what we do bring in and the equity in the property,” Muse said in an interview Tuesday evening.
So far, though, the church has had trouble finding an alternative bank with “more favorable terms,” according to the church directors’ statement.
Ark of Safety owes Severn Savings Bank of Annapolis $437,492, according to its filing, which also listed assets of between $1 million and $10 million.
Muse said the church was in good shape until gas prices went up and “of course, the mortgage crisis hit.” Prince George’s County has been hit harder by foreclosures than other parts of the state.
The church’s fiscal straits are a reflection of its members’ personal money problems, the board said. Many members, who are the church’s chief financial source, are struggling to maintain mortgages secured in better economic times.
The church, too, lost equity in its real estate holdings just as individuals’ property values fell, said Muse, who is a member of the Senate Finance Committee.
Although this is not the first time a church Muse has led has had financial problems, the senator said the current problems are unrelated to those his congregation faced 13 years ago.
When Muse resigned from Resurrection Prayer Worship Center and the United Methodist Church in 1999, taking many congregants with him, he and his followers left behind an unfinished building in Brandywine that Methodist Church leaders said was about $6 million in debt and behind on bond payments.
Muse told the United Methodist News Service then that his main reason for leaving was the denomination had failed to help with the building as it had for other congregations.
The bishop of the local Methodist conference told the news service that the conference and denomination had made $1 million in loans and security deposits available.
Resurrection’s trustees sued Muse and former trustees to obtain information about assets and liabilities. In 2002, Muse and his congregation were close to buying back the building at a greatly reduced price but were outbid by another church, which occupies the building now, he said.
In April 2004, Muse’s Ark of Safety Christian Church opened Victory House, a domestic violence shelter for women and children in Fort Washington.
There is no indication that those services will be cut, said Larry Holzman, the church’s attorney.
Muse said a planned second church location in Fort Washington has not been built.
Muse ran in the Democratic primary in April for the U.S. Senate nomination. He lost in a lopsided vote to incumbent Benjamin L. Cardin of Pikesville. Muse captured 15.7 percent of the vote to Cardin’s 74.2 percent.