Unique Ideas In Land Development
There are few unique ideas left in land development. Here’s one…
First…and please pay attention!
I am not going to jam religion down your throat, but we are going to discuss churches, specifically the land they own.
What do churches have?
Well, a few things of interest to a land developer.
Prime urban locations.
Typically, way more land than they are actually using. Think about it!
Tax exempt status under the federal Establishment Clause (and a boatload of other laws like the 1st Amendment to the U.S. Constitution).
A moral obligation, supported by religious faith, to help those in need.
A very serious problem with declining membership & revenue.
What do churches not have?
Diversified revenue.
A positive growth curve of active congregation members.
Reliable influx of large donations and bequests.
Flexibility.
Enough funds to sustain themselves.
What is a huge social problem today?
Dumb question since there are so many problems, but I am on a roll, so I’ll give you the answer: HOMELESS PEOPLE.
Where are homeless people located?
Right where the churches are…in prime urban locations!
Possible solution:
Develop excess church land into low income multi family residences.
How would this work?
Read on…..
Developing church land:
Identify and segregate the excess church land in a land use conceptual plan.
Church partners with land developer or builder / developer.
Developer resolves any zoning issues.
Developer applies for and secures required land divisions and fully entitles the land.
Developer secures final permits.
Church enters into a long-term ground lease with developer.
Developer constructs and builds out the approved project, collects rent and pays long-term ground lease payments to the church.
Everybody wins:
Local homeless problem is helped.
Church secures long-term diversified revenue stream.
Developer / Owner secures rental income.
What could go wrong?
Zoning problems (if any) can take time. See this post:
Zoning basics: https://www.landdevelopmentrealities.com/home/2019/9/17/zoning-basicsTax impacts for the church would need to be researched to make sure the revenue from the ground lease would be tax exempt.
Since the church would own the underlying land, care would need to be taken that they do not have problems with liens. See this post: What is a real estate lien? https://www.landdevelopmentrealities.com/home/2019/5/10/what-is-a-real-estate-lien https://www.landdevelopmentrealities.com/home/2019/5/10/what-is-a-real-estate-lien
Giving credit where credit is due:
This concept was brought to my attention by Christopher Hall in a post he placed on LinkedIn.
Christopher Hall’s Profile: http://linkedin.com/in/christopher-hall-93863611
Article: As Churches Approach Fiscal Breaking Point.
Published by Bisnow
In 27 years in real estate and land development, this idea never once crossed my mind and thanks to Bisnow and Christopher’s land use knowledge and social sense of responsibility, there you have it!
Good luck and stay safe!
Contact me at: ldr@landdevelopmentrealities.com
Images courtesy of author: Captiva, Florida and Asheville, North Carolina
