Crossroads Community Church needed to obtain a larger worship facility because of continuing membership growth. Church Facility Solutions was challenged to make a small renovation budget stretch by acquiring an existing building to renovate. CFS was able to obtain a higher than normal loan amount to carry the existing church property until it could be sold.
Assignment Highlights
- Performed A to Z Services—from Strategic Planning, Site Selection, Capital Campaign and Financing Representation, Team Selection, Design, Engineering, Construction Management, FF&E Outfitting, Move Management.
- Created pro-forma financial models showing ability to afford high debt resource. Orchestrated successful bond financing.
- Remained patient when this first choice targeted property (Burt Chrysler, Jeep) was taken off of the market.
- Negotiated an extended (six-month) due diligence period necessary to underwrite the bond financing. This required convincing Seller that a successful funding outcome would be accomplished. Bond financing, with the help of Share Financial, a Dallas, Texas based church finance company, Crossroads was successful in securing a $5.8 million debt financing.
- Sold current church facility two (2) years earlier than predicted!
Results
- Crossroads was able to acquire a building three times larger than its previous church facility (from 15,000 SF to 45,000 SF) to accommodate its surging growth.
- Crossroads was able to purchase a building constructed in 2005 for approximately 40% of its original appraised value.
- With only a $900,000 budget for renovations, Crossroads was able to construct the necessary infrastructure to qualify for a change of use from an automotive sales and service building to a fully functioning church facility.
Project Cost Savings
Church Facility Solutions can be most effective as a project leader if it is brought into the project from the very beginning--from the time the vision is originally revealed to the church's leaders. As a result of being brought in from the beginning of Crossroads project, CFS' efforts resulted in huge cost savings to Crossroads as follows:
Purchase Existing Building versus Construct Ground Up. Crossroads was planning to buy a “great” 20 acre parcel of land to accommodate their expansion/relocation. CFS convinced Crossroads to consider several unoccupied, existing buildings that were on the market as a result of the recession economy. To build a new 30,000 square foot building, plus all the other costs associated with development, would have cost $9 million. CFS led Crossroads to purchase a former Burt Jeep/Chrysler auto dealership. Phase 1 total project costs equaled $6.8 million. This existing 45,000 SF building offered a better location, plus the ability to initially occupy 30,000 SF, then to be able expand into 45,000 SF (from 500 seats to 1,000 seats).
Cost Savings: $2.2 million
Phase 2 Expansion. Soon after the completion of Phase 1, CFS helped Crossroads expand and remodel into the remaining 15,000 SF. There was no need to purchase land or build a shell of a building as they already owned it as part of Phase I. Since Crossroads did not have to purchase land and construct an additional 15,000 SF building, they were able to save considerably. Cost Savings: $1.5 million
- Flooring—Contract Directly. As a part of CFS' “in Kind Services” program, CFS worked with a member of the church to purchase carpet direct from the manufacturer resulting in a 30% savings. Cost Savings: $12,000
- General Contractor Fee & General Conditions (Phase 1 expansion project only). The General Contractor quoted $118,000 in the Request for Proposal; but the final fee and general conditions was contracted for $92,000. Of note is that CFS had previously worked with the General Contractor on other projects and had previous experience negotiating this significant cost line item. Cost savings: $26,000
- Landscaping. The Town of Parker required a $20,000 renovation of the existing landscaping. CFS teamed up with a church member who owned a landscape company who provided professional guidance and equipment. CFS provided oversight of 35 volunteers over two weekends.
Cost Savings: $11,000 - Furniture/Chairs. The original budget for the chairs in the auditorium was $50/chair. CFS was able to source a better quality chair for $30/chair. Cost Savings: $12,000
Sale of Existing Facility. CFS was able to create a competition between two churches and potentially the Town of Parker to purchase the existing Crossroads facility property which led to a much higher selling price.
Cost Savings: $150,000
Construction Cost. By carefully negotiating the AIA form agreement with the general contractor, CFS was able to help Crossroads 1) avoid a $30,000 expense resulting from a likely change order resulting from the contractor exceeding their Guaranteed Maximum Price; and 2) realize a $179,000 cost savings that would otherwise have been profit to the general contractor.
Cost Savings: $209,000