This is essentially a story based achievement in the Episcop path. It works the same as His House
in that you must complete the set tasks to complete it. The tasks are:
1. Fix the graveyard.
2. Bowls for the soup kitchen.
3. Improve the Church and graveyard further. Allows you to unlock His House
4. Bring fish fillets.
5. Bring a building permit.
6. Improve the Church and graveyard further.
7. Supply marble statue. (available once your graveyard has a rating over 100)
Upgrading to the Cathedral is free and unlike the first upgrade you can continue delivering sermons immediately.
I had to complete both the Church (50 rating) and graveyard (200 rating) quests before I had the option to upgrade to a Cathedral. I believe you need a relationship status of 70 with the Episcop so you may potentially be able to upgrade earlier if you have progressed in other NPC’s storylines.
You can get much more detail on this and all other aspects of the game at the wiki here