Development Advisors just completed a unique “syndicated” arrangement to finance a new 100,000 SF church facility in south metro Denver for our client Mission Hills Church. What an incredible challenge! But we praise God for his leading and for his provision.
As it turned out, we could not have picked a more difficult time to procure debt financing. It’s still very soon after the credit collapse of 2008. There is no question that the “collapse” continues well into this new year (2009). We solicited no fewer than 12 lenders seeking debt financing for the $29 million MHC project. In collaboration with Keith Carson at Mission Hills Church, at least 8 complete packages of historic and credit information were provided to lender candidates. Together, we solicited conventional lenders, non-conventional lenders and private lenders (such as foundations). I am pleased to announce that Mission Hills Church was successful in obtaining up to 62% of its total project costs ($29 million) in the form of a syndicated commitment from both FirstBank and from Share Financial. Share is a church bond underwriting company based in Dallas, Texas. Share has done many bond underwritings all across the US over the past 30 years including First Aurora AOG (Aurora, CO) and Rocky Mountain Christian Church's (Niwot, CO) new Frederick plant.
Not only are church bonds a good solution for church expansion projects, but they make excellent investments for church members who essentially invest in their own church. Personally, I intend on purchasing some of these highly secure and above-market yield financial instruments. Church bonds historically have a lower default average than municipal bonds and Share has not had a single default in its’ 30 year history.
You may wish to learn more about the MHC new building project entitled "Called to Something Big".
Monday, April 20, 2009
Monday, March 2, 2009
Audio Visual Lighting Costs
Its amazing how much a church needs to spend these days for a state-of-the art AVL system. As Mission Hills Church ("MHC") got started looking at the costs to outfit its 117,000 SF new church facility, both my partner Tim Dreessen and I were shocked.
After much research and discussion, it was decided that MHC would hire Clair Brothers out of Manheim, Pennsylvania, to complete the design for a new AVL systems for the main santuary, the chapel, the youth area (of course), the children's area (including the Early Learning Center) and the lobby (to name a few key areas).
The initial estimates were well north of $3 million, nearly $25/SF. This would equate to almost 20% of the proposed hard costs for the project. Outrageous!
But just today, I heard that another southeast Denver metro area church (not Cherry Hills) spent $3.2 million for all of its AVL installations and spent an eye-popping $23/SF including about $2M in its worship center which seats almost 2,000 persons.
Over the course of vetting and value engineering, MHC was able to get the proposed costs down to around $2.2 million ($18.80/SF). Now that the reality of the woeful financing markets have taken a hold and we have revised downward the budget for every system/item in the reduced new proposed building (100,000 SF), the overall budget is still $1.4 million ($14/SF).
While I don't profess to being more than a music loving baby booming classic rock listener, I bet that what MHC gets for $1.4 million will be hands down compared to what they have now and certainly better than most churches of its size. Further, the design we will install will be scalable meaning, that when giving picks up sometime after the grand opening, MHC can add this gizmo and and that gadget to achieve the type of facility that will be few and far between in the greater Denver area.
After much research and discussion, it was decided that MHC would hire Clair Brothers out of Manheim, Pennsylvania, to complete the design for a new AVL systems for the main santuary, the chapel, the youth area (of course), the children's area (including the Early Learning Center) and the lobby (to name a few key areas).
The initial estimates were well north of $3 million, nearly $25/SF. This would equate to almost 20% of the proposed hard costs for the project. Outrageous!
But just today, I heard that another southeast Denver metro area church (not Cherry Hills) spent $3.2 million for all of its AVL installations and spent an eye-popping $23/SF including about $2M in its worship center which seats almost 2,000 persons.
Over the course of vetting and value engineering, MHC was able to get the proposed costs down to around $2.2 million ($18.80/SF). Now that the reality of the woeful financing markets have taken a hold and we have revised downward the budget for every system/item in the reduced new proposed building (100,000 SF), the overall budget is still $1.4 million ($14/SF).
While I don't profess to being more than a music loving baby booming classic rock listener, I bet that what MHC gets for $1.4 million will be hands down compared to what they have now and certainly better than most churches of its size. Further, the design we will install will be scalable meaning, that when giving picks up sometime after the grand opening, MHC can add this gizmo and and that gadget to achieve the type of facility that will be few and far between in the greater Denver area.
Sunday, November 23, 2008
Judge rules church wronged by Boulder County
On November 19, 2008, jurors decided Wednesday that Boulder County Commissioners violated federal law when in 2004 they refused to allow a Rocky Mountain Christian Church ("RMCC") a request to expand on its property at 95th Street & Niwot Road in Boulder County, Colorado.
Jurors decided that the Commissioners violated the Religious Land Use and Institutionalized Persons Act (“RLUIPA”) because they:
1. did not treat the church equally to a non-religious institution;
2. placed a substantial burden on the church’s practice of religion;and
3. put an unreasonable limitation on that practice.
US Judge Robert Blackburn still needs to decide if RMCC can expand on its property. Back in 2004, RMCC requested approval to double its facility size by building an education building, a chapel, a gymnasium, and a gallery. This expansion was proposed to add 132,000 square feet to the church’s existing 106,000-square-foot campus.
From Alan Ahlgrim, Lead Pastor at RMCC “… we won 100% of what we were most concerned about and in addition we anticipate we will recover every dime of the litigation costs the church has incurred.”
“We won the central issue that brought us to the court house. This has been a long and complex case and we respect the verdict of the jury and we are very grateful that they concluded that the county actions were not fair. We are very, very happy with the decision since it vindicated the church...”
The Becket Fund for Religious Liberty, a Washington-based law firm dedicated to the free expression of religion, supported Rocky Mountain Christian Church in its lawsuit. After the verdict was announced, the Becket Fund issued a press release calling the decision “a major victory” for the church. “This is a win not just for Rocky Mountain Christian Church, but for every house of worship across the country. What this decision says, loud and clear, is that religious institutions need to be treated the same as non-religious institutions — no better but also no worse,” Eric Rassbach, national litigation director of the Becket Fund, said in the news release.
Jurors decided that the Commissioners violated the Religious Land Use and Institutionalized Persons Act (“RLUIPA”) because they:
1. did not treat the church equally to a non-religious institution;
2. placed a substantial burden on the church’s practice of religion;and
3. put an unreasonable limitation on that practice.
US Judge Robert Blackburn still needs to decide if RMCC can expand on its property. Back in 2004, RMCC requested approval to double its facility size by building an education building, a chapel, a gymnasium, and a gallery. This expansion was proposed to add 132,000 square feet to the church’s existing 106,000-square-foot campus.
From Alan Ahlgrim, Lead Pastor at RMCC “… we won 100% of what we were most concerned about and in addition we anticipate we will recover every dime of the litigation costs the church has incurred.”
“We won the central issue that brought us to the court house. This has been a long and complex case and we respect the verdict of the jury and we are very grateful that they concluded that the county actions were not fair. We are very, very happy with the decision since it vindicated the church...”
The Becket Fund for Religious Liberty, a Washington-based law firm dedicated to the free expression of religion, supported Rocky Mountain Christian Church in its lawsuit. After the verdict was announced, the Becket Fund issued a press release calling the decision “a major victory” for the church. “This is a win not just for Rocky Mountain Christian Church, but for every house of worship across the country. What this decision says, loud and clear, is that religious institutions need to be treated the same as non-religious institutions — no better but also no worse,” Eric Rassbach, national litigation director of the Becket Fund, said in the news release.
Construction Costs DECREASE
The Associated Builders and Contractors just reported significant decrease in construction prices.
“Construction input prices fell 2.8 percent in October – the largest one-month decrease since July 1986 – according to the November 18th producer price index (PPI) report by the U.S. Labor Department. Despite the dramatic decline, construction input prices remain 10 percent higher than October of last year (see graph below).
Prices for fabricated structural metal products dropped by 0.6 percent in October, but are still 15.1 percent higher than one year ago. Plumbing fixtures and fittings prices dropped slightly in October by 0.1 percent, however they are up a relatively modest 4.1 percent from October 2007. Nonferrous wire and cable prices dropped 7.7 percent – the largest monthly decline since 1949. The decrease brings the year-over-year change down 5.4 percent from October 2007. Prices for fabricated ferrous wire products increased 2 percent in October following a slight decrease in price the month prior. Still, prices are up an astonishing 30.55 percent from a year ago. Softwood lumber prices decreased 7.4 percent from September, the largest monthly decrease since November 2004, and are now down 8.8 percent from last October. In contrast, asphalt felts and coatings prices continue to increase, rising 5.7 percent from last month and up 60.2 percent from a year ago. Crude energy prices dropped significantly, down 24.9 percent in October, with crude petroleum down 26 percent and natural gas down 29.1 percent. Gasoline prices dropped 24.9 percent on a monthly basis. Finished energy good prices fell 12.8 percent from the previous month. Overall, prices for finished goods decreased 2.8 percent, making it the third consecutive monthly decrease. “
© 2008 Associated Builders and Contractors
“Construction input prices fell 2.8 percent in October – the largest one-month decrease since July 1986 – according to the November 18th producer price index (PPI) report by the U.S. Labor Department. Despite the dramatic decline, construction input prices remain 10 percent higher than October of last year (see graph below).
Prices for fabricated structural metal products dropped by 0.6 percent in October, but are still 15.1 percent higher than one year ago. Plumbing fixtures and fittings prices dropped slightly in October by 0.1 percent, however they are up a relatively modest 4.1 percent from October 2007. Nonferrous wire and cable prices dropped 7.7 percent – the largest monthly decline since 1949. The decrease brings the year-over-year change down 5.4 percent from October 2007. Prices for fabricated ferrous wire products increased 2 percent in October following a slight decrease in price the month prior. Still, prices are up an astonishing 30.55 percent from a year ago. Softwood lumber prices decreased 7.4 percent from September, the largest monthly decrease since November 2004, and are now down 8.8 percent from last October. In contrast, asphalt felts and coatings prices continue to increase, rising 5.7 percent from last month and up 60.2 percent from a year ago. Crude energy prices dropped significantly, down 24.9 percent in October, with crude petroleum down 26 percent and natural gas down 29.1 percent. Gasoline prices dropped 24.9 percent on a monthly basis. Finished energy good prices fell 12.8 percent from the previous month. Overall, prices for finished goods decreased 2.8 percent, making it the third consecutive monthly decrease. “
© 2008 Associated Builders and Contractors
Saturday, November 1, 2008
Blog Purpose
My hope for this blog is to offer a forum to discuss issues, offer ideas, present solutions, air concerns, and report on the real estate and construction activities of churches in the greater Denver area (Pueblo to Ft. Collins).
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