HHTF Option 4: Sell without Restrictions
Sell without Restrictions
Sell the property for market value. This is currently estimated at between $1.25 and $1.75 million. Options for the proceeds include payoff of the mortgage (current balance about $950K), creating a fund for Social Service grants, funding the broader mission of the church including the endowment fund and reserves, or a combination of the above.
The groups impacted by the option positively include:
- The church as a whole as it has the flexibility to determine the best use of the proceeds including social justice, mortgage reduction, worship, education, etc.; and no longer has the annual operating costs associated with Holly House;
- East Shore members as they determine which social justice organizations are best served through financial support on an annual basis; and
- The Social Justice organizations that will receive additional financial support.
- East Shore members who currently use a portion of the property and will have the opportunity to be part of relocation planning.
Negative impacts include:
- East Shore members who currently value different uses for the property;
- Sophia Way which will lose living space for women in transition (note: there is no contract beyond the current agreement which ends in 2017); and
- Possible disruptive and possibly aesthetic impacts to our main campus based on the construction and design of the new owner’s building(s).
In summary, the main benefits are putting the church on a sound financial footing and giving us funds to more effectively pursue our missions. Severing our relationship with the property allows East Shore to move forward in new directions as East Shore’s membership and their interests evolve. Finally, East Shore no longer has the ownership, administrative and financial burden for this property that is only of limited use to the church.
Social and Economic Justice Consistent with UU Principles
Funds from the sale would be used to pursue the broad mission of East Shore with a special focus on Social Justice. The flexibility of cash would allow East Shore to look at and fund many options. If East Shore were to set conditions on the use of this property, thus limiting its value, the range of options would be very narrow.
East Shore is a community whose members value and support the ever growing Social Justice needs of the community, through commitment of time, energy and funding. Every second Sunday we choose an existing Social Justice organization that embodies East Shore’s mission to provide compassion in human relations. Our own spiritual growth comes from these Social Justice efforts.
At the same time we must keep East Shore strong as it is our anchor allowing for this Social Justice work and for the other missions of the church. By properly managing East Shore’s resources, we support the work of East Shore. We will utilize the proceeds from the sale of Holly House to make East Shore stronger and to support its mission and work much more effectively.
Social and Economic Justice is a very important mission of our church. It must, however, be highlighted that the church has many other missions and needs. Since the Holly House property is a resource for the whole church, the proceeds from the sale must be fairly allocated across all the missions and needs of the congregation.
Implementation and Timing
Full market analysis of the property would need to be done to be sure that East Shore would receive a fair price and one that, at a minimum, meets the expectation in this option. A transition plan for the current residents and uses needs to be developed and a real estate firm needs to be selected to manage the sales process. The timeframe from start to closing and receipt of the proceeds should be less than a year. Following closing, the congregation will need to decide how to allocate the proceeds. Creation of a “Social Justice Fund” is a strong possibility and this would require ongoing management in the same manner as the Endowment Fund.
The risks are the real and emotional loss of a property that has been of part of the church for many years and the impact of the development of this property on the beauty, activities and security of the church’s campus.
- Positive financial impact to East Shore’s budget. This option could retire the current mortgage which has a remaining balance of about $950K. We are now past the 5 year anniversary of the mortgage allowing us to pay it off with no penalty and could save over $100K in annual operating expenses. This and additional funds from the sale would secure the church’s financial future which has been at risk in recent years.
- Severs obligations with property so that East Shore can more effectively pursue its mission and move forward in new directions;
- Provides significantly more Social Justice funding for deserving organizations
Impact on the Current Campus
This option has the highest risk of an adverse impact on East Shore’s campus. Once the property is sold there will be no restrictions on what might be built next to East Shore – except, of course, by those placed by the City of Bellevue permitting process.
Author: Lee Winstrom, Reviewer: Jean Sillers
Consolidating papers offered by Jean Sillers, Bill Austin, Lee Winstrom