A Congregational Meeting has been called for this Sunday, February 1, 2015 by Lead Pastor Corey Widmer and the Session of Third Church. It will take place in the Fellowship Hall immediately after the 11:15 service there, and is expected to last no more than an hour, and hopefully less.
There are three parts to the meeting on Sunday:
First, Corey Widmer will give a "State of the Church" address, outlining where we are now and laying out some of his vision for where God is calling us to next.
Second, Aggie Cullen will be presented for election as Deacon, filling out our current class of lay-leaders.
Third, the Session seeks congregational approval to purchase the property immediately behind the church building at 607 Silverspring Drive. The full details of the request, the reasoning behind it, and the official motion to be presented are included below.
Please read the materials below and get in touch with Tom Hays, Lee Sauvain, or Ed Satterfield with any questions, before the meeting if possible. There will be ample opportunity to discuss the proposal at the meeting, but many questions can likely be answered ahead of time allowing us to proceed quickly to a vote.
Motion: That Third Church Inc. purchase the property at 607 Silverspring Drive for $330,000.
History of our Dealings with the property
In December 2003, an LLC made up of Third members purchased the 607 Silverspring property at a price of $330,000. The property is directly behind the church building backing up to the playground. There is a two story Cape Cod home on the property. The goal of the LLC purchase was to make available a later purchase of the property by Third to add the property to the total church land area, making significant building expansion possible.
Third has leased the property from the LLC, and in turn has rented the house. The annual lease arrangement with the LLC has granted Third the option to purchase the property at the $330,000 price at any time.
“For the Joy of the City” Capital Campaign
The 2010 five year Capital Campaign had the following purposes:
1. The expansion and improvement of facilities at 600 Forest Avenue to include the purchase of 607 Silverspring, along with repayment of debt on properties at 500 Forest and 8005 Silverspring
2. The purchase of property at 2324 Pump Road, along with constructing a facility for the Pump Road Church
3. 10% of receipts to be contributed to the ministry of East End Fellowship
With pledges to the Capital Campaign at a lower level than our goal, these purposes were “downsized” to fit the expected receipts by the Session in 2012. The modified use of the capital campaign funds were:
1. Principal and interest payments on 500 Forest Avenue
2. Purchase 607 Silverspring Drive
3. Lease and principal payments toward the purchase of land at 2324 Pump Road
4. 10% of receipts to be contributed to the ministry of East End Fellowship
What has happened toward fulfilling purpose # 1?
In 2014, Third refinanced its loan on 500 Forest Avenue. In addition to significantly reducing the interest rate, $215,000 was drawn from Capital Campaign funds to reduce the outstanding mortgage balance. In October 2014 the sale of the 8005 Silverspring was finalized. The net effect of both of these actions was the decrease of our monthly mortgage payments by $4,602. As a result, Third was able to decrease our indebtedness by $607,000 in 2014. Additionally, and unrelated to the Capital Campaign, $370,000 in dismissal loan debt was also eliminated; resulting in total debt being reduced by $977,000 in 2014
Why purchase the 607 Silverspring property?
The acquisition of the 607 Silverspring property is critical to Third's ability to expand in the future. Because the land is contiguous to Third’s current property, it provides prime space for possible expansion. The addition of the square footage of land greatly increases the allowable square footage of building that Third could add to its current footprint. Building plans were created in 2006 using this property.
Why purchase the property now?
Last year, the LLC decided they would sell Third the property at $330,000 in the event the closing of the sale would be completed by March 31, 2015. If Third does not exercise the option to purchase the property by that date, Third would presumably still have the ability to purchase the property but at the Henrico County assessed value
The property is currently assessed by Henrico County for $378,500. Conservative estimates by several Real Estate agents have projected an easy sale of the property at an amount of $387,000. Thanks to the generosity of the LLC, by acting now on this purchase, Third will be acquiring the property at a value that is $48,500 lower than the Henrico County rate, and additional savings below the market rate.
Lastly, purchasing the property will provide modest income by renting the home. Currently, Third loses money on the lease of the property from the LLC and subsequent rental. Third's lease payments to the LLC are $1,600 per month. The rental sublease to a tenant brings income of $1,260 per month. Consequently, Third's finances produce a deficit of $4,080 per year on just the lease. Real Estate taxes are $3,300 annually and repairs and maintenance on the home amount to $500 per year. Therefore, currently, we create approximately $7,800 in negative cash flow every year. Purchasing the property will result in an estimated income of $11,000 per year. That is a change in cash flow of nearly $18,000.
If you have any questions or need more information, please contact:
Tom Hayes -- Chair of Session Budget and Stewardship Committee
Lee Sauvain -- Acting Administrator