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Praying for Profit; Church Group Plans
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By Carey Gillam
LEAWOOD, Kan. (Reuters) - From the giant screens that frame the
altar with video clips during sermons to the ``collection connection''
kiosk near the sanctuary, the United Methodist Church of the Resurrection is not a conventional
congregation.
Led by a dynamic 36-year-old pastor, the 10-year-old church has garnered more than 8,000
members to become one of the fastest-growing in the nation in part by shunning stereotypical
church practices.
The congregation has increased 50 percent a year for the last few years.
Now, in a move turning traditional tithing on its head, Church of the Resurrection is setting up a
for-profit company and looking for $16 million to invest in real estate. The new company, COR
Development, is aimed at church members but is open to any investor, and is slated to go public
later this month.
The registration statement filed with the Securities and Exchange Commission seeking permission
for the initial public offering is believed to be a first for a church-oriented organization, according
to those involved in the deal.
Praying For A Profit
The goal is to raise seed capital for a church-related real estate development venture and make a
profit for church members who would rather invest their money than donate it.
``We have a commercial enterprise but a charitable need,'' said Art Fillmore, an attorney who
helped draw up the financial plan, and a devoted church member.
Church of the Resurrection, the second-largest Methodist church in the U.S. in terms of average
attendance, is one of a growing number of ``mega-churches'' around the nation undertaking
development projects to facilitate membership gains. Most finance their growth through
traditional avenues such as bank loans and donations.
``When we talked to the SEC, I asked if they knew if anyone had done this before. They said no. I
was looking for some guidance,'' said Fillmore. ``But we had to cut this thing from whole cloth, as
well as holy cloth.''
The SEC has not yet approved the plan, but the church hopes the offering can be made by the end
of September.
The money raised through the stock sale is to be used to buy 47 acres of land adjacent to the
church, which sits in a fast-growing, upscale suburb south of Kansas City, Mo. The plan calls for
COR Development, which will be managed by the church but act as a separate, for-profit entity, to
donate 15 acres to the church, and use the remaining land to build offices, retail and parking.
The commercial development will be leased and likely eventually sold, but will be designed to
optimize traffic patterns and parking space in a manner that benefits the church, according to the
plans included in the SEC filing.
A host of risks await investors, including potential tax complications and artificially-inflated costs
related to the donation of part of the land. Uncertainties with construction and long-term financing
are also issues. But a legion of church-going professionals, including lawyers, bankers, doctors
and others, have rallied to support the venture.
Dr. Bill Crawford, an area optometrist, who joined the church with his wife a year ago, said he
plans to put money into the deal ``not necessarily because it's a good investment... but because I
think it's good for the church.''
Whatever It Takes
The 47 acre-tract is but one element in an aggressive growth plan that calls for an
800,000-square-foot church campus, complete with a yet-to-be built new sanctuary seating 5,000
to 7,000 people, a gymnasium, child care center and more.
Church of the Resurrection pastor, Rev. Adam Hamilton, said the decision to do a stock offering
came about after he realized the church needed more land to support its growth, but could not
afford to pay the $250,000 an acre asking price for the available ground.
A large-scale fund-raising drive has already been planned to help build a new sanctuary in 2002,
and church members were unwilling to give additional large sums of money for the land purchase.
Thus the idea for the stock offering.
``When I went to seminary, I never dreamed of helping to design a commercial real estate
project,'' said the Rev. Hamilton, who plans to invest part of his two children's college savings into
the deal. ``But this really is a means to another end.
``We've said we want to be a 'whatever it takes kind of church.' The public offering ``is part of the
whatever it takes.'' |
