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Property Potential

In downtown Asheville, Trinity Church is one of three churches that offer public parking. • Trinity Church photo

Congregations might be in the business of building up God’s kingdom, but it is in real estate that they are finding funds for everything from building repairs to expanded mission outreach.

New revenue-producing projects help local churches meet their goals without tapping out already-generous givers or depleting endowments. They demonstrate what is possible when churches take advantage of underutilized space in ways that complement and advance their missions.

“A lot of the most innovative, interesting examples of community partnerships and using the building as a tool for ministry [are] coming from the Episcopal community,” said Tuomi Forrest, executive vice president of Partners for Sacred Places, a Philadelphia-based nonprofit agency that helps churches make their buildings into functional community assets.

Projects range in scale from modest to dramatic. At Trinity Church in downtown Asheville, North Carolina, 90 parking meters at two church-owned lots brought in $60,000 last year for humanitarian relief projects. In Pompano Beach, Florida, St. Martin Church is subdividing property to allow for such options as commercial parking, a retirement community, and a renovated, more flexible church space. In Sioux City, Iowa, St. Thomas Church has become home to Hazel’s Own St. Thomas’ Toffee, a confectionary enterprise to rival those of monasteries that make beer and jams.

In these cases and others, congregations are making sure not to leave money on the table in the form of space that sits empty most of the week. Most congregations that seek help from the Episcopal Church Building Fund have properties that are used less than 10 percent of the time in any given week, said Sally O’Brien, vice president of the fund.

“Every canon is struggling with what do I do with these churches that are on the cusp?” O’Brien said. “It may not be every one of their churches, but it’s in every diocese.”

By sharing room with tenants or in-house enterprises, churches are sometimes able to hold off less palatable alternatives, such as reducing staff, selling assets, or slashing budgets for outreach. The strategy requires trade-offs and does not work in every setting, but consultants say it is often doable if a church follows steps to find a complementary partnership.

“You have to leverage your assets,” said the Very Rev. Lang Lowrey, canon for Christian enterprise in the Diocese of Atlanta and a real-estate developer who works with dioceses and congregations on property-related projects nationwide.

If churches wait too long, Lowrey said, “our lack of decision will require us to either sell or make partnerships that are lucrative but aren’t in keeping with our mission. The earlier we do all this, the more the mission can be preserved and improved.”

Tough financial realities have sparked the search for new revenues. Average Sunday attendance fell 12 percent from 2010 to 2015 across the Episcopal Church. In the same period, increases in average pledge amounts did not keep pace with inflation. The pinch is often felt in the form of deferred maintenance projects. As roofs age and HVAC systems cry out for replacing, churches are reaching out for ideas or funds to make their properties more financially sustainable.

The challenge afflicts even affluent areas such as Pompano Beach, located 10 miles north of Fort Lauderdale. Last summer, St. Martin was running a $15,000 deficit and facing $150,000 in urgent needs, including an alarm system to satisfy fire codes and repairs to the seawall on the church’s waterfront property. Beyond those costs, the building needs rewiring, renovations to offices and bathrooms, and greater accessibility for the handicapped.

The Rev. Bernard Pecaro, rector of St. Martin, believes the parish must leverage its real estate.

“Unless we utilize the value of our property to support and grow our ministries we will not be able to financially endure,” Pecaro wrote in the church’s fall 2016 newsletter. “We will eventually have to close our doors for lack of adequate financial resources.”

By working with the Diocese of Southeast Florida and Lowery, St. Martin plans to redevelop its property. The nave will be remade, without pews or carpeting, to accommodate various uses, from flexible worship to theater events and fine-arts displays. An upgraded parish hall will attract rental income by offering a waterside patio and room for at least 200 guests. New boat slips and new meeting rooms will be among the benefits that come from harnessing the underlying real estate’s value.

Congregations are eager to explore the possibilities. The Episcopal Church Building Fund received twice as many calls from parishes in 2016 as it did five years earlier, O’Brien said. She used to speak to church groups four times a year, but demand has swelled to the point that she often gives four talks a month now. She finds parishioners know it is time for significant structural moves to cut costs, boost revenues, or both.

“The denial about decline is no longer there,” O’Brien said. “It used to be that we would have to spend a fair amount of time helping parishes face that what they were calling ‘stability’ was actually decline. There was lots of excuse-making, but that doesn’t exist anymore.”

To meet growing demand, the building fund in September expanded its consulting staff team from two to five. Last summer, the fund lowered its interest rate from 6.5 percent to 5.75 percent to increase accessibility. It raised the loan amount ceiling from $500,000 to $1 million. The fund’s $6 million portfolio now includes 26 loans, up from 15 in 2010.

As the fund expands its reach, O’Brien coaches congregations on how to assess which steps to take when considering new revenues. She urges them to keep their eyes on the prize: congregational vitality. If a congregation needs outside revenue to pay bills, it is usually because vitality (including attendance and other signs of member engagement) needs shoring up. Finding new income streams may buy time for a congregation, O’Brien said, while it works to engage the neighborhood and attract more newcomers.

Financial partnerships work best, experts say, when they help a congregation boost vitality while advancing its mission and providing much-needed resources. Congregations are already used to sharing their buildings, Forrest said. He notes that 80 or 90 percent of weekly traffic in a church is usually non-members attending meetings or events. Many users pay little or nothing because they cannot afford much, and the church gladly offers space as a ministry. But if an organization has a staff and a complementary mission, then renting office or meeting space can meet a need and provide a boost to church coffers without compromising anyone’s integrity.

One example comes from Calvary Methodist Church in Philadelphia. Located in a neighborhood that declined economically and later experienced some gentrification, the church was drawing 25 for Sunday worship and could not maintain its striking architecture, including Tiffany stained-glass windows.

Through a creative partnership, the congregation remade its space into the Calvary Center for Culture and Community, which hosts three worshiping communities, theater events, and other gatherings. By making itself a community asset, Calvary raised $2 million for essential brick-and-mortar investments, while still retaining ownership and access to its worship space.

“The place is literally the community center of the neighborhood in a real way, not just euphemistically,” said Joshua Castaño, senior program manager for Partners for Sacred Places and a member of St. Mark’s Church in Philadelphia. “The congregation has increased now to close to 150 people again because, slowly but surely, they’ve made this deep and sincere partnership with the community around leveraging their building.”

As congregations begin to explore their options, Castaño and Forrest said it helps to have representatives from the church begin talking with other community groups about how they might work together. Inviting them to visit the church can help spark ideas. They have seen some congregations host open houses, not for church growth but rather in a clearly articulated quest to explore how the church can support community groups and initiatives.

They also recommend noticing what nearby congregations are doing to make their spaces more usable. In downtown Asheville, Trinity Church is one of three churches that now offer public parking at meters. Trinity’s rector, the Rev. Scott White, said the congregation is healthy and does not need the extra revenue to keep up with building expenses, but it could be helpful down the line for budgetary line items beyond mission support.

Tradeoffs come with the territory. Trinity is now taxed $10,000 a year on its parking-facility land, but the cost is easily covered by the $60,000 in parking revenue. The church reserves the right to limit parking when members need it for church events.

Whether metered parking has a long-term future at Trinity remains to be seen. The city recently built a 900-car garage, which could soften demand for church parking. If taxes rise further, the cost might no longer be justified. But for now, it’s helping the church advance its purpose, and for that the congregation gives thanks.

“We see it as a mission,” White said. “We’re balancing between being a ministry site for the gospel and being good stewards of our resources and our space. It’s reasonable for us to ask for this donation for parking so that we can continue to be a ministry site for the gospel in Asheville.”


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