Finance&Commerce — Leadership votes to sell church near University of Minnesota campus

Thanks to a loyal BJS reader for pointing us to another article on the sale which provides a bit more information. This was found on the Finance&Commerce website — “the only daily publication exclusively covering business in Minnesota”:

 

By Burl Gilyard

Pastor David Kind is opposed to plans to sell University Lutheran Chapel near the Dinkytown area in Minneapolis.

Doran mentioned as possible buyer

A church near the University of Minnesota campus is slated to be sold to make way for redevelopment, possibly for apartments. But the congregation at the University Lutheran Chapel is not going quietly.

Last Tuesday, the board of the Burnsville-based Minnesota South District of the Lutheran Church-Missouri Synod voted to sell the church at 1101 University Ave. SE in Minneapolis for “the highest market price available but not less than a net price of $3.2 million.”

The recent talk has been that Bloomington-based Doran Cos., a prolific developer of student housing projects in the area, has pursued the site. As local developers chase new apartment projects, the area around the U of M campus has become a hot spot. Minnetonka-based Opus Development Corp. started construction in May on the 120-unit Stadium Village Flats, a $30 million project. Developer Curt Gunsbury recently completed the 75-unit Solhaus and is floating plans for another project in the area.

“I don’t believe they [Doran Cos.] have a deal at this point, but they are the ones who put an offer on the table before it was even up for sale,” said the Rev. David Kind, pastor of University Lutheran Chapel. “We were told that the plan was to tear down the church and build a 150-unit complex here. That’s what I was told.”

On Monday, Doran Cos. principal Kelly Doran and Jim LaValle, the company’s vice president of development, could not be reached for comment about the site.

University Lutheran Chapel, which has a congregation of about 125, was completed in 1950 and sits on a one-acre site at the corner of University Avenue Southeast and 11th Avenue Southeast, according to Kind.

Kind said that he received an email about the decision shortly after 5 a.m. the day after the vote by the Minnesota South District. “I waited all night for a phone call,” Kind said.

He characterized the relationship between University Lutheran Chapel and the Minnesota South District as “very rocky.” The internecine tension, he said, predates his 10-year tenure at the church. “It’s been a contentious relationship since I’ve been here and before that. It’s a relationship that I’ve worked hard to strengthen and repair.”

The website of the chapel has become a forum to advocate for saving the church. A message from Kind gives a sense of the emotional tenor: “May our Lord see us through the days ahead, grant us grace to move forward and to forgive, and may He have mercy on the souls of the leaders of the Minnesota South District.”

Representatives of the Minnesota South District of the Lutheran Church-Missouri Synod could not be reached for comment on Monday.

Kind acknowledges that there have been past discussions of selling the church, most recently in 2008 when the climate for any real estate deal was tough.

The resolution passed last week by the Minnesota South District calls for the district to retain a broker and outlines the goal of having a purchase agreement before the end of the year.

Doran Cos. just completed the 102-unit 412 Lofts project at 406 12th Ave. SE, which is a block away from the University Lutheran Chapel. Doran previously developed Sydney Hall and renovated the adjacent Dinkydome; combined, those buildings have 141 units.

Doran also has approval for another 60-unit project, Oak Street Apartments, on the site of the former Oak Street Cinema. Doran University III LLC recently paid $600,000 for the empty movie theater at 309 Oak St. SE in Minneapolis, according to a certificate of real estate value (CREV) filed in Hennepin County.

The University Lutheran Chapel has started a campaign to raise money to make an offer on the property, but Kind acknowledges an uphill battle.

“We are engaging in a national fundraising campaign to try to make an offer on the building. We were thinking more in the range of $1 million as a goal, based upon an appraisal of the property,” Kind said.

“It’s a lot of money. It’s going to take a miracle,” Kind said in reference to the $3.2 million minimum price tag.

Finance & Commerce recently reported about Augustana Lutheran Church in downtown Minneapolis, where the congregation is grappling with how to maintain a vintage building and a dwindling congregation, an increasingly common dilemma for urban churches.

Minneapolis-based developer Brighton Development took down a 1960s era church addition in south Minneapolis to make way for The Greenleaf, a 63-unit affordable housing project, now nearing completion. In a separate project, the historic 1904 church next door is being renovated.

Current listings on the Minnesota Commercial Association of Real Estate (MNCAR) database show several local churches for sale including Osseo Church of the Nazarene (priced at $1.7 million), the Miracle Lutheran Church at 3751 17th Ave. S. in Minneapolis ($1.75 million) and the Church of St. Philip at 2507 Bryant Ave. N. in Minneapolis ($1 million).

According to recent CREVs, the Mount Olivet Lutheran Church Endowment Fund recently paid $1.2 million for the Seventh Church of Christ, Scientist, at 1700 W. 50th St. in south Minneapolis, across the street from Mount Olivet’s church. In northeast Minneapolis, the House of Refuge Church of God in Christ paid $450,000 to buy 1600 Sixth St. NE from Northeast Community Lutheran Church.

Kind said that University Lutheran Chapel still has a healthy congregation. He is concerned about bulldozing a church to put up another apartment building.

“I do think that this will change the character of the neighborhood,” Kind said. “We are a healthy church. It’s not like it’s a failing ministry that is just sort of in its death throes.”

About Norm Fisher

Norm was raised in the UCC in Connecticut, and like many fell away from the church after high school. With this background he saw it primarily as a service organization. On the miracle of his first child he came back to the church. On moving to Texas a few years later he found a home in Lutheranism when he was invited to a confessional church a half-hour away by our new neighbors.

He is one of those people who found a like mind in computers while in Middle School and has been programming ever since. He's responsible for many websites, including the Book of Concord, LCMSsermons.com, and several other sites.

He has served the church in various positions, including financial secretary, sunday school teacher, elder, PTF board member, and choir member.

More of his work can be found at KNFA.net.

Comments

Finance&Commerce — Leadership votes to sell church near University of Minnesota campus — 47 Comments

  1. With all of these articles do you think the MNS District realizes the “witness” (not to say about their mercy or dedication to Life Together either) to the community of the Twin Cities they are having? Hardly the stuff of Acts 2:47 and having good favor with all the people.

  2. With all of the money Doran is going to make, don’t you think MNS leadership might see that they’re selling short. Imagine an apartment complex we built, with a sanctuary on the second floor and retail space on the ground floor? There’s an ELCA parish in Manhattan with a permanent sanctuary built into the ground floor of a skyscraper because they knew how to more than “sell low.”

    Not judging hearts! mind you. Just pointing out that a blind squirrel could see win wins all over this thing…….

  3. @revfisk #2

    There’s a church not too far from where I live that owns something like a 120,000 square foot building, rents 80,000 square feet to a pizza place, and occupies the other 40,000. You have had a good idea. Though I have to say that since we are not only spirits, and since everything in the form of traditional church architecture and design has meaning, the shape and details of the building and its space do matter.

    What’s not on the table, it would seem, is any idea of working things out in any way whatsoever. This is not the Christian way. KFUO-FM was beyond just being a warning shot. It was a wasted line of defense against this evil.

    I do commend you for calling it “evil” in your recent video.

  4. Similarly, there is a Methodist congregation in downtown Chicago which has a *sanctuary* on the top floor of skyscraper. And it is dedicated space, not simply a meeting room they are allowed to use on Sundays… pews, altar, a cross….. even a pulpit…. 😉

  5. @revfisk #2
    I wonder if with a solid business/development plan ULC could get a loan to purchase their own chapel, and develop the property in a way that would pay the mortgage.

  6. @Matthew Come what may, that should be your agenda. With good planning, one does not need to sacrifice sacredness of space in order to make this kind of planning work. What continues to blow my mind is the true lack of “visionary missional leadership” that could lead anyone (heretic, orthodox or somewhere in between) to sell in this market to a company that obviously thinks the land is a goldmine. You don’t sell goldmines. You mine them.

    Silliness…..

  7. “A church near the University of Minnesota campus is slated to be sold to make way for redevelopment, possibly for apartments.” There you go – progress means getting rid of that annoying neighborhood pestilence, the Church. And ecclesiastical bureaucrats cry out “Amen… Amen… (repeat 3.2 million times).”

  8. In the last few months there have been over 780 posts on BJS regarding the MSD plan to sell the ULC property. There have also been comments on other Lutheran blogs as well.

    Has anyone seen any comment coming from the Purple Palace or on the official LCMS website or on the blog sites of top LCMS executives?

  9. I know Synod is advisorial only, but has anyone checked with them and tried to enlist their help in saving this church? I’d think someone has thought of this already and shudder to think Synod told them its their own problem … anyone know?

  10. @Pastor Joshua Scheer #12
    I too have emailed our Synod President, Rev Harrison (haven’t heard back… yet). Let us not assume that he knows what is going on, so send him an email ([email protected]), let him know how angry, astounded, upset you are by the action of the MNS BOD, and ask him to comment and get involved.

  11. We don’t know who will buy ULC. Doran make sense, but it could be anybody with the right 30 pieces of silver. How about this for divine irony/judgment: MNS sells ULC to a buyer who in turns sells it to a Muslim who builds a mosque. Minneapolis, after all, is home to 100,000 Muslims.

  12. @Pr. Don Kirchner #18
    So we should just sit on our hands and wait to see what, if anything happens?

    You are correct that Rev Harrison spoke to the Spring Joint Pastoral Conference, however, that was before the MNS BOD voted to sell the property.

    Rev Harrison still needs to hear from supporters of ULC, and since the decision to sell was handed down last week, I believe, though I may be wrong, he has not spoken or commented publicly about the decision.

  13. @Former Anglican #13
    I know it sounds all old-fashioned, but we are “traditionalists” after all: Go paper, and be persistant. I’ve sent paper letters to both Pastor Harrison, and Pastor Fondow, and this week end I’m going hard copy to the Circuit Counselors of both Minnesota Districts, and perhaps the synod VPs. For a lot of folks, email just gets deleted, it’s like a quick thunderstorm (all emotion but no staying power.) Save ULC and the postal service, go paper.

  14. @synodocat #16

    Hi, (what if you say hi to a nonentity – is there any sound?)

    Do you think the synod will finance this?

    What do you think the commissions and fees will be, and to whom?

  15. @Matthew Mills #20
    Thanks, Matt,
    I’ll try that, too… to the IC, ULC and the Minn. districts.

    Paper and prayers!

    [BTW, I got a thank you already from ULC for a contribution to the capital fund. I didn’t expect them to have time for that right now.] I asked my Pastors if they would use the bulletin insert, please, even if only a few people down here in Texas understand the problems of the several district attempts to put congregations out of business.
    [They are all so sure they own their own churches and district can’t/won’t take over. Tell it to the ALC!]

  16. @Pr. Don Kirchner #19
    Sarcasm is lost on a blog/discussion site.

    One could take you comment at #17 to imply that, as Rev Harrison spoke to this at the Spring Joint Pastoral meeting he is fully aware of the current situation and need not be further informed, reminded, asked to comment. I was stressing that regardless of whether he knows or not, supporters of ULC should contact him. As I stated in my post at #13 “Let us not assume that he knows what is going on…”

    Assuming you and I stand together in opposition to the proposed sale, we have nothing substantive on which to disagree.

    @Matthew Mills #20
    Matthew –

    Letters, email, couriers, ambassadors, pigeon post, signal towers, semaphore, road side bill boards, blog sites, text messages, twitter messages – whatever gets the message out – I’ll support all of them.

  17. Rev. Lohse :We don’t know who will buy ULC. Doran make sense, but it could be anybody with the right 30 pieces of silver. How about this for divine irony/judgment: MNS sells ULC to a buyer who in turns sells it to a Muslim who builds a mosque. Minneapolis, after all, is home to 100,000 Muslims.

    This is not even a hypothetical! My church in California was closed by the CNH District and the property sold for $1 million to a developer. (The district owned the property because it was started as a mission congregation by the district 25 years earlier.) The developer never tore down the church and it is being used as a muslim school and worship place now. It was very sad when they took down the large cross.

  18. @Noreen Linke #30
    I can, but I haven’t got the list together yet (penciled in for this weekend.) If you get there first, pass it to me at [email protected] . I’m just taking the CC lists from the district webpages and running the names through the synod clergy-finder. Please take a look at my post under the National Mission Conference string as well.
    In Christ+,
    -Matt Mills

  19. @mbw #35
    If sending angry emails makes you feel better, go ahead, send away. All I’m saying is that paper copy letters will get more attention than emails.

  20. The following is derived from the Campus Ministry Plan, For the Expansion and Funding of Campus Ministry in The Minnesota South District, LCMS, Board of Directors, May 17, 2011 at mns.lcms.org site

    Theoretically, the campus ministry plan does three things:

    1.) expands campus ministry from 3 sites to 13

    2.) provides long term source of funding for the expansion via establishment of Campus Ministry Endowment Fund

    3.) Lets funds now going from MNS missions budget to campus ministry be put to regular (non-campus) missions budget uses

    The expansion to 10 new sites happens by establishing a Campus Ministry Facilitator supported financially from the endowment fund. Features of the facilitator:

    o Part-time position

    o Training and coaching site leaders & students

    o Encouragement, networking, identifying and sharing resources

    o Organize annual Campus Ministry Retreat

    o Report to Assistant to President for Missions

    Features of the endowment fund:

    o Created by selling ULC and CLC

    o Earnings are used to fund the Campus Ministry budget, supplemented by the Mission Budget

    o Principal remains untouched

    o First 10 years, funds campus ministry only

    o After 10 years, Mission & Endowment Committees evaluate

    Mission grants are to be offered to ULC and CLC for 5 years, as follows,

    2012 – $35,000/$30,000 = $65,000
    2013 – $28,000/$20,000 = $48,000
    2014 – $21,000/$15,000 = $36,000
    2015 – $14,000/$10,000 = $14,000
    2016 – $7,000/$5,000 = $12,000

    After that, each of them can apply annually for $5,000 like the 10 new sites. That’s 12 x $5,000 = $60,000, if the 13th (independent) is not counted.

    So let’s evaluate that. The plan itself speaks of 5-year fixed rate endowment account at 2.32%

    $3.2 mil x 0.0232 = $74,240 / year

    Can you pay the facilitator and give the grants from $74,240? Obviously not. Money still has to come from somewhere else, just like it does now. How much can one expect to add to the endowment by selling CLC? Dunno. Do they? When would that happen?

    So, for giving up the location, location, location, building, improvements, and probably the congregations themselves, you end up in 10 years with the Mission & Endowment Committees evaluating what to do with the endowment, because the endowment has its fixed purpose for only 10 years.

  21. @T. R. Halvorson #38
    Thanks TR,
    I can’t read the plan w/o getting nauseous. As I wrote on a parallel thread my Son is a student at one of the “unserved sites.” He has a fine Lutheran church w/in a reasonable walk, what makes him “unserved?” No clown acts? No espresso?

  22. @Matthew Mills #39

    Synodocat should hire a consultant to assess the plan.

    But seriously, how about convening a committee of, say five Certified Public Accountants to look at the plan as presented by the District on its website in its own words, and issue a professional assessment of it on a purely financial basis? Truly, I’ve got to wonder how shiny it would look.

  23. @T. R. Halvorson #40
    What sort of opinion are you looking for from CPAs? I am one, but I’m not sure what CPAs would have to offer on this topic. I see this issue as being primarily non-financial.

    I am far more interested in more transparency in the District’s financial reporting. I see little reason their financials should not be made publicly available with sufficient descriptions that someone who is not a bureaucrat could understand them.

    Do people realize that non-church nonprofits are required to be more transparent than churches? Yet, we do not demand that of our Districts, etc.

  24. @M Frahm #42

    The plan is set forth in Power Point slides. A bite here. A bite there. The financial information within one slide looks feasible in itself. But assemble it together as accountants do. When assembled, can it cash flow? Where is the breakeven point? Can the endowment fund, when funded by the liquidation of ULC, actually do what the plan says it will? Acct 201 stuff. Managerial accounting.

  25. A few questions/comments, asked/stated in a random and non-judgmental manner–just for information, and also to get the little gray cells working and synapses leaping:

    Why does a BOD sell a property anyways? Quite often, it’s because the property is costing money to keep around. Is this the case here? I don’t think BOD’s want to be in the property management business–that’s not their vocation.
    Do they own this property free and clear, or is there a mortgage? If so, who holds it–LCEF or a commercial lender?
    These days, districts are strapped for cash–could this be the underlying reason? Bottom line management is bad stewardship–whether you’re a non-profit or a business.
    What is the district’s experience lately with mission starts? How are the missions going?
    Is the district saddled with other properties that are commercially not viable? What is happening with them?
    Has anyone reviewed the district’s financial report lately? I’m talking the detailed backup, not just the overall assets/liabilities summary.
    How’s the district support coming in? (A crass way to put it, I suppose).

    That ought to get us thinking.

    Johannes (been there, done that)

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