ARKS Executive Summary - Church of God of Prophecy

Church of God of Prophecy
ANALYSIS OF REAL ESTATE ASSETS
AND OPTIONS FOR EFFECTIVE STEWARDSHIP
EXECUTIVE SUMMARY
October 6, 2010
Prepared By ARKS, Inc. - Raleigh, North Carolina
CONCLUSIONS AND RECOMMENDATIONS
The review, research and analysis of COGOP real estate assets in Cleveland, Tennessee and its
property near Murphy, North Carolina leads to eight inescapable conclusions as outlined below:
The COGOP real estate reviewed during the course of this analysis currently incurs an annual
cost of $456,600, excluding capital outlays for repair. Lease and other revenues bring in about
$388,000, excluding any revenue from the White Wing Bookstore.
• If COGOP remains in its present headquarters building, it faces outlays of about $1
million for environmental systems and cosmetic renovation to maintain value, image and
a safe and comfortable workplace. Currently, space in the headquarters building is
significantly under utilized.
• Similarly, the Voice of Salvation (VOS) building has substantial vacant space and needed
repair estimated to cost $88,200.
• The office portion of the White Wing building is not efficiently used and needs repairs
estimated to cost $271,300.
• Many of the activities that are housed in the Headquarters, VOS, and White Wing
buildings need not necessarily be co-located. An analysis of the various functional
relationships at the International Offices campus might present opportunities to reduce
the space needed or might identify selected relocations to improve efficiency.
• If the Tomlinson College Board persuades the General Assembly of the necessity of
reviving the school, the Tomlinson College campus will require substantial
improvements. The estimated cost for needed renovation and repair to re-start college
operations in facilities as they were in 1992 is $5.4 million. That estimate excludes
furnishings, endowment, personnel and operating funds.
• Cooperative arrangements with Lee University seem to offer the most cost-effective and
educationally sound means of expanding COGOP leadership training as well as ongoing
training for lay and spiritual leaders in the denomination.
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• If the academic and leadership training objectives of the denomination are met in other
ways than a reconstituted Tomlinson College and building redevelopment, the campus
offers several options for more effective stewardship and a potential site for relocation of
the headquarters building.
• Fields of the Wood is a financial liability for COGOP. Although it has historic and
evangelistic value, its ongoing costs may outweigh its ability to advance the strategic
objectives of the denomination.
Arks, Inc. recommended courses of action regarding the choices before it, insofar as they relate
to the stewardship of its real estate and the housing of its International Offices staff, consists of
the following:
• The headquarters campus should be sold for a price somewhere between $8.0 million and
$10.0 million.
• With an agreed-upon price and schedule for closure in hand, COGOP should move
immediately to undertake a planning effort for relocation of the headquarters functions to
a new building of 32,000 to 37,000 square feet on the Tomlinson College campus. The
development plan could also incorporate facilities for Tomlinson College.
• Site planning efforts for a relocated headquarters building should include a careful
analysis of development opportunities for housing on the portion of the campus site now
partially devoted to the apartments and mobile homes. Campus planning activity should
also include identification of existing buildings which should be demolished and which
ones could be saved and put to productive use.
• Fields of the Wood has been an attraction for COGOP members for many years as well as
visitors from many other denominations. At one time as many as 42,000 COGOP
members participated annually with donations as member/supporters of Fields of the
Wood. Currently, supporters number closer to 6,000. As a result of the decline in
support, Fields of the Wood facilities are reaching a critical point in their physical
condition. Within three to five years, lacking significant investment in renovation and
repairs, the displays and other park facilities will become unattractive, if not dangerous.
The park will be unable to operate effectively. In general, Fields of the Wood is currently
showing significant signs of deterioration and a lack of adequate care. Without attention,
it will very soon become a significant liability to COGOP. Τhe following options should
be reviewed in light of the suggested criteria above:
1. Contract with an operator that would lease the park and operate it in keeping with
its original intent while actively campaigning for continued support from
denominational members.
2. Close the park and conduct a fund-raising campaign of sufficient magnitude to
bring all facilities to a high level of excellence so that the park would once again
be a source of pride to members of the denomination.
3. Close the park and develop the asset.
4. Close the park and sell the asset.
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• Fields of the Wood should be closed as soon as possible to halt the $100,000 annual
operating deficit. The property should either be sold or developed. In either case, action
on its disposition should be delayed until real estate market conditions are thought to be
improving.
• Opportunities for generating revenue from the land asset at Tomlinson College campus
should be reviewed as soon as possible. Priority action should reflect the window of
opportunity stimulated by the Cleveland/Bradley County market dynamics.
• If an acceptable agreement cannot be reached for purchase of the International Offices
campus, COGOP should budget funds as outlined in the report for upgrading mechanical
systems and other building improvements.
• Absent the sale of the headquarters building, COGOP should intensify efforts to sell or
lease the VOS building, relocating staff housed there to the headquarters building.
Similarly, rearrangement of COGOP staff should be examined to maximize the space
available for lease in the White Wing Press building and bookstore.
• Planning and development efforts regarding the Tomlinson College campus should
proceed with the objective of using the site as a means of generating revenue.
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