Report From the Land & Building Forums By Liz Ridpath Posted November 21, 2016 In Featured, Land & Building 0 0 Yesterday we wrapped up our eighth congregational forum to discuss the proposed building option for Prince of Peace. The Land & Building team came to consensus on a Transformation Option that will add 25,000 square feet of space to the east side of the Worship Center and heavily remodel the current 60,000 square feet in the Worship Center. The Board of Directors unanimously recommends this option to the congregation as the best option to meet our ministry needs in the future while being good financial stewards of our resources. The congregational forums focused on a description of the project and the key outcomes that would enhance ministry with the new and transformed space. Broad financial information was provided on estimated costs of the concept plan, whether the entire project was completed in one phase or two. Completing the project in two phases lowers the financial risk, but may add over $1M to the project cost if construction costs continue to rise by 7% per year. A review of potential revenue sources was also identified, including current debt capacity, one or two phases of a major capital campaign, and potential lease or sale of the Christian Life Center building to finance debt or construction costs. The costs presented were based on construction firms’ estimates of the concept plan and building footprint. These costs ranged from just under $15M, for a single-phase project to $17.5M if we need a two phase project and use the entire $1.5M contingency built in. These numbers include construction, consultants, interest and closing costs, capital campaign costs, furnishings and equipment, parking lot resurfacing and new lot lights. These cost estimates also include the $2.5M in capital repairs that would be needed in the Worship Center whether we move ahead with this construction option or not. An estimate of $16.8M and a two-phase project was used as an example to project financing needs. Potential financing has been identified to cover the construction cost through current debt capacity, capital campaigns and lease or sale of the Christian Life Center. We have capacity for $3.5M in new debt built into our budget. We would anticipate raising more than $9M through one or two capital campaigns. Annual revenue from leasing the Christian Life Center could support payments of $4M or more in additional debt. There are several points during the process that we can stop to evaluate costs and financial resources before committing to the project. The congregational vote on December 17-18 will indicate the level of support to move ahead. Construction bids would confirm the project coming in within projected costs and the congregation’s capacity. A capital campaign would be launched in the spring, and the level of support for that appeal would provide another checkpoint on the feasibility of moving ahead with construction. At each of these points the Board would have an opportunity to evaluate and reorient a project to ensure that we’re best stewards of all of our resources. There are many ways to phase the project to ensure that the congregation does not take on excessive financial risk. The building plans that were presented at the forums outlined the proposed building footprint and conceptual layout. Architectural renderings of the concept plan were presented to give a flavor for the type of facilities we could have with an addition and transformed space. The exact details of interior design have not been finalized. The core concept will be presented for approval by the congregation during worship on December 17-18. You must be present to vote. The level of design work to provide exact detail is very expensive, and involves architects, consultants in mechanical, civil and structural engineering, and a general contractor. We would not move ahead without a vote by the congregation on the concept plan and building footprint. The staff has already weighed in on workspace and ministry needs, as have members of Land & Building teams that worked over the summer and fall. There would be more extensive work among staff and ministry leaders to ensure that needs are best met in the final design. Thank you for your participation in the Land & Building forums. Many questions were asked on details that can’t be answered at this time, but have been recorded and will provide us additional input if we move ahead with this project. Some questions focused on building access, including ramps, family bathrooms, elevators, escalators and way-finding. Accessibility was a key goal with new construction and will be addressed if we move forward. Questions were raised about outdoor worship, energy efficiency, kitchen space, and storage (garage). These have all been discussed within the Land & Building teams and among the staff and will be considered in final design. Further comments focused on ministry needs: Mission Outpost, CDLC, Mega Sale, large recreational space for family ministry, worship space and the organ. We have input from all of these ministries, and final design would include more work with all ministry areas to best meet everyone’s needs within new and transformed space. There were a number of questions raised about process and timeline. The Board of Directors will need to see an adequate level of support in a congregational vote in order to move forward. That percentage of support has not yet been identified, but will need to be considerably higher than 50% for a project of this scope. If the Board finds that the level of support is high enough, and the financial resources are identified to support the construction, then construction could begin in July 2017 at the very earliest. All ministries would continue during construction. We have multiple options for where to worship, how CDLC operates, and how other areas function during this time. Much of the Worship Center building would be accessible during most of construction, and we have the use of the Christian Life Center during the building process. A capital campaign would be launched in the spring of 2017. It would be a three year capital campaign, with a second phase, as needed, coming right afterward for another three years. The focus of the campaign will be to finance the construction of this Transformation Option. If this project should not proceed, then the focus of the capital campaign would be to raise the funds necessary to handle the capital upgrades that would be needed without new construction, and would perhaps fund a few of the improvements that could address some of the shortcomings of our current buildings. The campaign would be launched regardless of the outcome of the congregational vote and action by the Board of Directors on whether to move ahead with new construction or not. Financial questions that were raised centered on the cost and availability of bank financing, the value of the Christian Life Center to lease or sell, other capital upgrades needed for the Christian Life Center, when we’d see more detailed numbers and the general level of financial support by our families. Two banks and the Mission Investment Fund have been in consultation with us and assured us of our capacity to borrow the necessary funds and provided current interest rates (though rates won’t be locked in until construction is complete). We have some capacity for additional borrowing through current margin in the operating budget, as well as other revenue that has not been part of our operating budget. This borrowing would have no impact on the current support for ministries. Our Christian Life Center (CLC) building could be leased once most or all of the functions move to the expanded Worship Center space. Lease revenue could then support some additional borrowing, again without impacting the financial support for ongoing ministry. We could ultimately lease out the entire building, though only leasing a portion of the building was used in financial projections to be conservative with estimating revenue. We would very likely use the expertise of a management company to handle any leasing. Ultimately we may wish to sell the CLC building and use the proceeds to finance construction. Capital upgrades are identified in the CLC over the next few years, and those could be phased in only as needed, until final decisions are made for the building. The value of the CLC will be determined at the time it would be put up for sale. At this time we have an appraised value that would more than support the portion of construction it would need to cover. Our congregation generously supported the No Debt! Know Mission! capital campaign, which was launched during a severe recession, during turmoil in the denomination and was used for debt reduction. $4.5M was raised for that campaign. We would anticipate even greater support for a capital campaign for a construction project that would support greater ministry and move us into God’s vision for our future. Concerns and wishes expressed at the meetings have been documented and will be added to the notes for the next phase of architectural work if the project moves forward. If you have comments or would like more information please email firstname.lastname@example.org and continue to visit the blog for the latest updates. Liz Ridpath Recent PostsUnityCompleting the Chapel & Matching GrantPhase 1 + Matching Grant OpportunityThe Adventure Is About To Begin!