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Guidance for Property Redevelopment
By Betty Kupeian, Presbyterian Church Building Corporation
We all know that change is diffi- cult. But that knowledge doesn’t lessen the experience of anxiety and grief during times of change. This is true especially for congre- gations that find it difficult to nur- ture or even sustain ministry to meet congregational needs, while also engaging the community outside their front doors.
Amazingly, under these difficult circumstances, some congre- gations are responding with an often radical examination of their resources and needs, especially when it comes to their buildings. This examination can yield pro- posals for congregational building projects. These can present great opportunities to support, expand or revitalize congregational min- istry. They can also present risks for which congregations need to prepare.
The following offers a sequence of planning steps congregations could follow in the process of redevelopment. The best practice is for presbyteries to partner with congregations under their care to review and approve major steps in the redevelopment of church buildings.
Missional assessment
The project planning phase is fo- cused on identifying the mission- al character of the project and its alignment with the congregation’s ministry goals. It is key for the congregation to review and con- firm that the mission and vision of the congregation agrees with this initiative. The congregation could ask, “How will this project fur- ther the mission of Jesus in and through our congregation?”
Establish need
Congregational building projects consume scarce resources (fi- nancial and human) and will change the congregation’s opera- tional budget. Getting clear and honest as to what the need is for such a project is key to ensuring that a project is warranted. Exam- ples include helping to provide subsidized housing, offering sub- stantial space for multiple users in a community hub model, setting up to accommodate the tenant(s), selling part of the church proper- ty/land to a developer.
The risk presented by a lack of clarity on the objectives for redevelopment is that congrega- tional resources are expended on a project that isn’t needed or could have been better served in a different way. It’s important that the needs being addressed are grounded in the congrega- tion’s objectives for ministry. It’s also important to know that oth- ers are not already taking steps to address the need—e.g., neigh- bouring churches building hous- ing while not being aware that a local housing project is already underway.
A good place to start is to pre- pare or update the congregational vision and mission. This should be refined through consultation with key people to get as specific as possible on what the congre- gation wants to do, how it aligns with their vision, and how this project would enable that vision to be realized in ways that it can- not otherwise be realized.
The Session plays a key lead- ership role in this process, along with the presbytery and national office staff, who are available to support these activities. This may seem time-consuming, but done well they can help ensure the project successfully realizes the ministry goals.
Consider alternatives
We are often quick to assume that a building project is required. But owning real estate is expensive and commits the congregation’s resources to activities that may, over time, erode other ministry goals. Engaging an architect to discuss specific functional needs of the project can help focus the planning process. Engaging a real estate professional may suggest alternate ways to realize ministry goals, such as leasing or buying/ selling, or partnering with another church or agency to deliver pro- gramming. These initiatives may be rewarding opportunities for collaboration with others who have similar interests in the com- munity. As a result, new connec- tions, volunteers and adherents may be identified. If there is a local ministerial, this might be a way to know what other congre- gations are doing in the area.
Determine location
In tandem with considering al-
Construction work at Central Presbyterian Church in Cambridge, Ont.
institutional memory to ensure that, as issues emerge and deci- sions are needed in later years, the original strategic intent and legal, tax and other considera- tions are known and observed. (In more complex congregational projects, the interaction of multi- ple non-traditional congregational activities like leasing commercial space, filing HST/GST returns, running a social housing project, being a landlord, etc., can have multiple and conflicting demands on the leadership team. Deci- sions taken without the benefit of a thorough understanding of the original strategic intent and context can have major adverse consequences.)
Prepare project pro forma
A pro forma analysis is a set of assumptions and calculations that projects the financial return that a proposed building redevel- opment is likely to create. It be- gins by describing the proposed project in quantifiable terms. This is best done by professional advisors.
Every number in the pro forma is an estimate and therefore sub- ject to uncertainty. The advisors need to assess the overall effect of those uncertainties (or risks) and attach numbers to them, so that an overall estimate of project cost contingency, or allowance for risk is known and included. Pro forma will also give the inter- nal rate of return, or the invest- ment return on the congregation’s investment in the project, which may be positive, zero or negative. By understanding this, the invest- ment in the building project can be compared, on a financial ba- sis, with other investment options to understand its relative financial merit.
The above considerations are significant and may be over- whelming for any congregation, and even for a presbytery. There is a growing list of organizations who are offering their services to help churches navigate the process of determining needs, presenting several viable alterna- tives and helping them to choose the one that would best align with their vision, mission and values. There is a working group within the PCC following these organi- zations, who can provide further information upon request.
ternative means of delivering the congregation’s ministry plan, getting clear on the ideal location for the ministry is an important consideration. While many forms of ministry can be readily deliv- ered from just about anywhere, others are location specific. Just because a congregation owns a particular building or piece of property does not mean that it is the most suitable location to carry out a new ministry initiative. De- termining if the new idea is loca- tion-specific and why, and what features in a location would allow successful program delivery, will help to realistically assess avail- able location options.
Assessment and validation
When the work outlined above has been completed, the pres- bytery may be asked to evaluate whether this work has been de- veloped, reviewed and approved by the Session and congregation in an appropriate manner.
Resource assessment
In addition to confirming that the congregation has discerned God’s calling and that a building project appears to be required for the work to go forward, it is also necessary to do a detailed assessment of congregational resources, such as available vol-
unteers, leadership, professional services, finances, etc. Note that one of the most important initial steps would include a proper ap- praisal of the property owned by the congregation.
Congregational leadership
Leadership is related to the ex- perience, competency and avail- ability of the individuals who are responsible for assessing, under- taking and bringing the project to completion. Engaging the right individuals with the right gifts in carrying out the project is criti- cal. The congregation may have members with financial acumen but lack real estate or other rel- evant experience. In those cases, congregations are encouraged to augment their leadership pool for the project, either by recruiting (inside or outside the congrega- tion) and/or supplementing with professional advisors.
As much as possible, plan to maintain continuity of leadership throughout the project develop- ment and delivery process. Look- ing seriously at the demographics of the project leadership group and considering their ability to serve for the next two or more years is a key test of the leader- ship capacity for undertaking a major project. This leadership team will need staying power and