Sustainable Features

A determination has been made by the development committee at RED church to examine the potential utilization of 3 distinctive sustainable features. A summary will be provided with some background information for each feature as well as a Cost/Benefit Analysis for each feature. The goal is to find features that can be included in the development of the Church Property that will provide future cost savings and other tangential benefits. 

These features include:

• Xeriscaping
• A Photovoltaic System
• Wood Flooring vs Bamboo Flooring vs Stained Concrete Flooring

For the sake of this analysis we will assume that the property was feasible to develop. For each feature, other assumptions will be made. Please keep an eye out for these assumptions. Any analysis on an individual feature will be viewed as an isolated feature and measured using an incremental DCF (Discounted Cash Flow) Approach. 

Feasibility?

After reviewing all of the information collected so far, there are a variety of options to consider.

Site Consideration

RED Church needs to determine if they are wanting to maintain at a size of 100 people or grow. Depending on this decision, RED Church may need to acquire a larger piece of land.

Market Analysis

The market does not seem to thick of churches. Being the bible belt, it is expected to have plenty of churches, and with a large population in such a small area, the market can take another benevolent institution.

Regulatory Analysis

Churches find favorable treatment when considering taxation and land use. The only obstacle will come down to obtaining a building permit for each of the sites. Since there is a loss of revenue, the city may not want to give the building permit for a church on the 6.4 acre site which is Dallas North Tollway Frontage.

Financial Analysis

Financial Analysis is where everything starts to get heated and fall through. Based on the financials and projected giving of the congregation, many of the options for land purchase or even the leasing option of the current Indian Restaurant are not feasible. Without having a pro-forma budget for church expenses we can not make an accurate decision and recommendation. Ball-parking the allowed property expense (whether lease or debt service) at 50% of the annual receipts allows for a $60K payment. The only option that comes close to that is the 1.14 acre lot with new construction. Projected debt service is $83,863. This is 68% of the budget. It seems like this will not be a viable option.

Unless RED church has additional funds for an equity investment into a property, it does not look like any of these options are feasible.

Financial Analysis

One of the most important aspects of Church Sustainability is the amount of giving from its attendees. Tithing is the church practice of giving 10% of a member's own income to the church for operational and benevolence reasons. Actual statistics have recorded that the average church-goer gives 3% of their income. 

• 100 church members with a Per Capita Household income of $40,594 have a total Congregation Household income of $4,059,400
• Based on a 3% average giving percentage, the church would receive $121,782 annually.

Construction cost of two properties (1 acre and 6 acre)
Construction is 103.72 per square foot.

Option 1 -Build 5,500 sqft church for 100 people on 1 acre lot

A 5,500 sqft construction would cost $570,500. (5,500*$103.72)

Land + Building = $975,500

Option 2 -Build 15,000 sqft church for 300 people on 3 acre lot and sell the other 3 acres

A 15,000 sqft construction would cost $1,555,000. (15,000*$103.72)

Land + Building =  $4,955,000 - 1.5M for 3 acres (conservative) = $3.455M

Option 3 -Convert 9,667 sqft Restaurant into Church (Lease, not purchase)

$14.40/sqft/yr = $139,204.80 / YR

Financing

Assuming 100% Financing

Regulatory Analysis

Taxation
Title 1. Property Tax Code, Subtitle C. Taxable Property and Exemptions, Chapter 11 Taxable Property and Exemptions, Subchapter B. Exemptions, Sec 11.20 Religious Organizations.

      (a) An organization that qualifies as a Religious Organization as provided by Subsection (c) is entitled to an
      exemption from taxation of:
           (1) The real property that is owned by the religious organization, is used primarily as a place of religious
           worship, and is reasonably necessary for engaging religious worship:

Zoning
The 6 acre lot is currently zoned as MU-2 Office.
The 1 acre lot seems to be zoned as Retail. Would be clarified with more information from broker.

Churches can be built in any residential or non-residential zoned district except a P(A) district.
http://www.dallascityhall.com/zoning/html/ics_-_church.html

GIS Maps below.

1.16 Acre lot. The back part of the property is considered flood area and part of a park. It is heavily treed. We will need to verify if the property can be cleaned up and how far back. http://gis.dallascityhall.com/zoningweb/

6.4 Acre Lot

Market Analysis

Market Demographics are obtained from the following sources for area code 75287:

• Dallas Economic Development
• http://www.dallas-ecodev.org/resources/demographics/
• CLR Search
• http://www.clrsearch.com/Dallas_Demographics/TX/75287/
• 2010 Census Information from CLR Search
• Population 62,669
• Per Capita Household Income $40,594
• Income is normally distributed from a low range of Less than $15K to a high range of $250K+
• 65% of the population is between the ages of 18 and 65
• 18-65 Population roughly 40,750 
• These are the prime church members by opinion
• Divorce - 15.59% of the population is divorced.
• 
  

Top 3 Tapestry Segments for ZIP Code 75287
http://redlandsbaoapp1.esri.com/ZIPCodeLookup/Default.aspx?ZIP=75287

Competition

Using Google Maps, there are 5 churches that are in the 75287 zip code. There are also others that border the zip code. 1 of the 5 churches is a Korean church, 2/5 are Presbyterian, and 1/5 is Catholic and should not be direct competitor since RED Church desires to be a mixed non-denominational congregation. 2 of the 5 churches would be competitors in the area: Valley View Christian Church and Life Church.

1) Valley View Christian Church

2) Bethel Presbyterian Church

3) Church of the Holy Communion

4) Korean Bethe Presbyterian Church

5) Life Church

Existing Built Property Sites

It is stated in Church Building Guidelines that 30-55 sqft of space per person is required for each person. On the high end we will need 5,500 sq ft of space with the ability to have a large area for the sanctuary. Other Church Building Guidelines state to build a church to 3 times current capacity for future growth. This results in  roughly 15,000 sqft space for 300 people. Storefronts will allow for the church to use the space as needed as opposed to being restricted by an existing use. An existing church building would also be another feasible option. Other special-use properties would require extensive retrofitting in order to create a sanctuary. Therefore, they will be left out of the analysis as options.

5,500 sqft properties

• None

15,000 sqft properties

• None

 Other Size

• 9,667 sqft Restaurant property convertible to a church (for Lease at 14.40 sqft/yr)
• http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=17529822&SRID=2543527425&StepID=101&LinkCode=20280

No properties were found for sale that would be sufficient. The only other options that would have been available were to purchase an entire strip center and then lease out the other units, or to purchase a large lot and subdivide the lot as needed http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=14064457&SRID=2543560445&StepID=101 6.4 acre lot. (As of 4/21) 

Note: When performing Feasibility Analysis on properties, depending on the systems and solutions utilized, notifications and triggers can be set where a developer analyst is notified when a lot or property comes available that fits the developers criteria.


Courtesy of Loopnet

Raw Land Sites

As previously stated, a 1 acre lot is a good rule of thumb for a congregation of 100. For a congregation of 300 a 3 acre lot would be needed.

• 1.16 Acre Lot on Rosemeade and Marsh for $405K
• http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=13908187&SRID=2543454190&StepID=101
• 6.4 Acre Lot for $3.4M
• http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=14064457&SRID=2543567959&StepID=101

Pictures and Videos

1.16 Acre Lot

6.4 Acre Lot

Church Building Feasibility Study

RED Church is looking to build a small church for a congregation of about 100 people in the zip-code area of 75287. We are comparing the possibility of purchasing an existing church property, converting a commercial property for church use, or build an entirely new property. In popular Church building consulting guidelines, when building a new church, one acre of raw land is needed for every 100 people. So we will need 1 acre of land to build on. http://www.churchbizonline.com/church_building_guidelines.htm