By Dave Harder and Rodney Wilts
Increasingly, congregations are being forced to think about redevelopment or sale of their real estate. A familiar narrative revolves around declining (and aging) attendance, long-overdue maintenance, and stretched budgets. As legacy funds run down, congregations struggle to decide whether they should sell their property for top dollar to sustain ongoing congregational life, or give it to worthy nonprofits that align with their mission.
As a church family, many of us have inherited incredible real estate from generations past. Our buildings have served admirably: hosting weddings and funerals, baptisms, worship services, and music concerts as well as serving the community by providing space for Scouts, AA, daycares, fundraising dinners and so much more. Unfortunately these buildings often become millstones around the neck of congregations as energy is diverted from mission into roof repairs, building maintenance, and increasing utility bills.
The Limits of a Wishlist
As churches struggle with these new realities (accelerated in many cases by COVID-19), they invariably turn to the possibility of sale or redevelopment. The congregation’s “wishlist” for the sale typically looks something like this:
- Receive full fair market value for the property
- Have an end-use that aligns with mission
- Lease as opposed to sell property
- Not be anything too tall or too bold that could impact the neighbors (or make the neighbors mad)
- Doesn’t impact the current parking count (if the church is staying on-site)
- Repair deferred maintenance and modernize facility (if the church is staying in a historic building)
This wishlist usually is beyond the reach of what the property can economically provide.
I recall someone saying that the one with the best story wins and sadly what we find missing within congregations and denominations is a better story. We often hear two stories. One is the sale of the land for highest and best use, padding the pockets of an already dying congregation just to prolong the inevitable. The other is continuing on with what they have, trying to make the best of a bad situation. Neither story is compelling and neither creates a needed narrative in our communities and neighborhoods. What if we had a story that reflects innovation, imagination and a path forward that leverages the asset of real estate for sustainability? What if there was a better way forward?
A Better Story
We believe there are two possible ways to not only find a better story but also financial sustainability:
A Hybrid Approach
Churches, like humans, want it all. We want affordable housing, and lasting financial sustainability. Typically, the discussion ping-pongs between the polarities. We believe that often the best (albeit imperfect) answer is in the middle. When desirable, we look for solutions that allow for sustainability and a continued presence in the neighborhood, while still aligning with a missional narrative. We aim to avoid selling the asset while looking at leveraging development to provide necessary capital to pay for space upgrades and mission enhancement. This solution allows the congregation to clarify its missional objectives, animate its presence in the neighborhood and leverage their land asset for mission. The majority of units might be market rent, with a smaller percentage of affordable units or subsidized community space. Some financial return is compromised, but the redevelopment aligns with mission, provides a sustaining revenue stream, while providing required housing.
A Portfolio Approach
A group of churches or a denomination with multiple properties in a region work together to achieve differing objectives, and share the economic and social returns. This approach offers tremendous promise. Imagine four congregations working together, optimizing the shared real estate to enable a deeply affordable housing development and a community arts space, subsidized in part through the market development of the highest-value property, with the fourth building repaired and modernized, now home to a revitalized mission in an under resourced neighbourhood. It is this approach that offers the church, denomination, and city a story of imagination and innovation. It’s also an opportunity to put the idea of reparations into action. What if these congregations worked together to help with the affordable housing crisis, and served a growing congregation in an under-resourced neighbourhood allowing it to become financially sustainable? Parish Properties is looking for an opportunity to pilot this portfolio approach and see a better story for the church emerge.
At Parish Properties we provide a solution that allows congregations in both the U.S. and Canada to clarify their missional objectives, animate their presence in the neighbourhood while leveraging their land asset for mission. Our collaborative team of experts can help you as you discern what is next for your church, consider how the vision that is emerging can come to life in your neighborhood, and involve your community in life-giving ways.
About the Authors
Dave Harder – As the Principal Consultant for Parish Properties Dave convenes ministry leaders, teaches, and consults with organizations seeking to reimage church in particular neighborhoods and leveraging land for sustainable mission, neighbourhood engagement and long term financial sustainability.
Rodney Wilts – Rodney is a Partner in Theia Partners, a real estate development company that believes projects should contribute positively to communities, deeply respect the environment, facilitate wellness, and be built with soul.
Photo by Bob Edmonson.
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