12/27/09 Property Update (Signing of Agreement)

(This is a transcript of what was shared in both worship services on 12/27/09.)

As I mentioned on Christmas Eve and in the E-update this week, we have some exciting news to share with you about the property we have been pursuing on Rt. 228 across from Myoma Rd.

Before I get to the exciting news, let me update you on what the Leadership Team has been up to over the last 8 months since we kicked off our Capital Campaign giving.

First and foremost, we have been hard at work trying to negotiate an agreement that would be favorable to Discovery and allow us to accomplish our goals as quickly and as prudently as possible. Tom Bice has helped lead the charge, coming into the office once a week (taking a personal day from his job) to work on property plans as well as other leadership goals. Besides frequent meetings together as a leadership team and frequent meetings with the owner to negotiate a contract we have also over the last 8 months done the following:

• Secured a local real estate attorney through Kim Ford (our corporate real estate representative and Discovery Member)

• Met with Adam’s Twp. Supervisors twice to determine feasibility of our project. (They have been very positive and helpful.)

• We had a preliminary meeting with Pen Dot to get a feel for future 228 development and to gage approval for an intersection and light. (so far so good)

• We had an appraisal done to determine the value of the property before agreeing to an asking price.

• We have done a phase 1 environmental survey and some initial work with engineers to lay out a feasibility for our master plan and check for major issues (all good so far)

• We have (through the owner) completed a re-subdivision of the property to prepare for purchase and submitted it to Adams for approval (initial look was favorable… no complications expected)

• We have begun investigation of the secondary house on the initial parcel across from Myoma Rd (known as Parcel B) to determine if it is feasible to use as office space (so far so good. This would provide 3 to 4 times the space we currently have and allow us to apply $2400 currently spent on rent to debt service.)

• We have met with 4 local banks and 1 non-profit lending institution about financing. While we received a loan approval from one entity, we were not happy with the stipulations and interest rate and decided to look for a better option. (We found one)

• Settled in on one of the banks as being our lender (will provide name as we get closer to closing). This local bank has given us two proposals and a favorable report after reviewing our finances (note… we are still subject to final loan approval)

• Brought in an outside credited accounting firm to look through our books to ensure accuracy and help for planning in the future (all checked out)

• Read through what seems like a million different purchase agreements with our attorney!

All of that brought us to last week. On Wednesday, December 23rd, (the day before Christmas Eve) we signed two land contracts and two sales agreements for all 4 parcels of property on Rt. 228 (a total of just over 21 acres)! We believe we have negotiated a really great position for the church. We also were able to exceed our original goal that was communicated in our Beyond My Life Campaign and our VIP Meetings by securing more than just one of the parcels now.

While we now have these properties under contract officially (you will notice the signs will read under contract), we still have 120 days that began on Christmas Eve to do some additional due diligence work and to finalize our financing.

The next 120 days will be extremely busy with traffic surveys, environmental reports and all the typical pieces that go into a commercial property purchase. We do not expect there to be any surprises and believe we will close on the property in April as planned… exactly one year after we kicked off our campaign giving!

We will also finalize our financing with our lender. This makes your continued general offering giving and honoring your Capital Campaign giving extremely important.

So what are the terms of the deal? (Refer to Parcel Division Graphic below this post)

Purchased now with closing in April (Sales Agreements)
Parcel B= $1.2 Million for 5.37 Acres (Remember that value is high because of traffic signal/interchange that will provide entrance to the property. This price includes Farm House and could triple our office space as well as allow us to use the $2,400 per month we currently pay in rent for debt reduction. PRICE WAS $1.879 Million (This was our singular goal of the campaign… to secure Parcel B at this amount)

Upper Parcel C = $516,000 for 2.58 Acres. PRICE WAS to be $600,000 + and we were not going to be able to purchase up front due to the original asking price for B. Acquiring this Parcel will help us to move up construction on our timeline significantly. (More to come on construction in the future).

Equity ownership now & held for 9 yrs at 2.64% int(Installment Sales Agreements)
Parcel D= $1,540,453 Million for 8.274 Acres (for $1,000 down and $1 a year we are able to use this property immediately for parking and sports fields for community. Principle plus minimal interest is due in year 9 in a balloon payment. The 2.64% interest rate is lowest allowable by IRS) PRICE WAS Same asking price, but carried much higher interest rate.

Lower Parcel C = $706,884.93 for 4.585 Acres and Large Home ($1,000 down. We will allow Seller and Spouse to live in home for as long as they would like within the 9 years. Like Parcel D, principle plus minimal interest is due in year 9 in a balloon payment. If we cannot afford to pay off principal and interest in year 9 seller will accept prearranged payments). PRICE WAS Same asking price, but carried much higher interest rate.

This agreement as compared with original agreement is saving Discovery at least $1 million and is an incredible opportunity for us to say the least. God has continued to amaze us over the past few months. He continued to open and close doors all throughout the process! Not only did this agreement come in around $1 million below original offer… We also will not have to put $200,000 down as the owner has accepted $13,000 down! If that is not God’s provision I do not know what is!

I want to say thank you to Leadership team (long meetings), thank you to Tom Bice, Kim Ford and all of you for your diligence in giving through an economic crisis to ensure that more people in our region will continue to come to know Jesus Christ!

We will continue to update you on our progress over the next 120 days! Now that we have an agreement there will be more concrete things to share. Continue to pray for the church, the leadership and our community… there is no telling what God is going to choose to do through your efforts!