Table of Contents: Strategic Design Financial STRATEGIC Frequently Asked Questions 1180 Great Plain Ave, Church Renovations, and The Capital Campaign 1. What are the goals of the church and how does the new building and the renovation of our existing building help us to meet these goals? The strategy set by the board a few years ago was to grow in spirit, in numbers, and in community presence. Through the renovation of the church, we hoped to enable all of these things by improving accessibility of the church, creating more gathering spaces, performing overdue maintenance and repairs, allowing the expansion of our programs, and opening our building up physically to the community rather than having our back to the town center and our front to our rear parking lot. We also hoped to reduce the environmental footprint of our church by replacing windows, replacing our inefficient heating system, etc. It was not easy to do all that in our current space and the initial plans turned out to be well outside of our budget. We are now considering a combination of acquiring the building next door and a more modest renovation of our own building to meet our goals. We believe we can get more for less more room to grow programs like The Center, Vacation Bible School, and Noah s Arc. We will also get more room to open up the corridor between the reception room and fellowship hall by removing the administrative offices, and more integration with the community by hosting a program like ParentTalk. In the near term, this will give us more space than we need, but the options opened up by having this space will allow growth in all three of our key goals for many years to come. 2. How does the new building help the church to meet its space needs? By moving administrative offices to the building next door, we can more easily renovate that corridor of our church and open it up to be a welcoming space. We can also use the space in the new building while we do the renovation, avoiding disruption of Noah s Arc and KASE during the building process. In the longer run, the new building offers an opportunity to gain significant space for growth in our expanding programs like The Center and space to lease to local groups like ParentTalk that make us even more integrated with the Needham community. We ve begun to brainstorm about hosting other church s youth group mission trips and to support other Outreach programs like Family Promise which offers temporary programs for displaced families. 3. Isn t it a disadvantage for the church administrative offices to be next door? Will ministers have to change into their robes and come across the parking lot? Although it may at times be preferable to have minister and church offices located in the same building as the sanctuary, the ministers feel that this is not a significant issue. Many other churches operate in this manner and we can learn from their experience. For example, we would create a changing room near the sanctuary so that ministers do not have to walk through the parking lot in their robes. On the positive side, the administrative space in the new building is larger and allows for rooms for counseling and discussion.
DESIGN 4. Have we gone back to the drawing board on the church renovation? Yes, we are working with our architect to come up with a plan that opens up the middle space of the church, provides a window wall and a better entrance from the front courtyard, and prioritizes important upgrades like heating and electrical. The estimate for the church renovation has come down significantly from the $7 to $8 million figure, but what we end up doing in the end depends critically on whether we move forward with the DayStar building, which is what we are discussing June 1. If we proceed with DayStar, we will make much more modest upgrades and changes we are planning a $500,000 budget for the main building in that case. If we do not proceed with DayStar, we will put the funds toward the renovation. If we proceed with DayStar, together with the new building, we feel we are still meeting most of our objectives and creating much potential for the future, but there will be significantly less visible change to our current building. 5. Why are we now more confident about the expected costs of the renovation, when earlier estimates were so far off? The prior cost estimates were off for a number of reasons including the amount of time passed since they were last done and significant design changes in the interim. Perhaps most importantly, we are now using a third party cost estimation firm, Deadalus, to estimate costs. This is their primary business and they have done hundreds of projects. We have tried to learn from prior mistakes in cost estimates and have made it a priority to develop the best, most accurate, unbiased, and timely estimates we possibly can. 6. Why are we still working with the architect that created the drawings that turned out to be way outside of our budget? We believe that we can separate the excellent design work that Colin has been doing from the experience we had with cost estimation by using only a professional third party cost estimator going forward, as noted above. Colin understands our building and our objectives, and from a design and responsiveness perspective we believe he does very good work. He has also promised to work with us to get a design that works with our budget without further costs to the church. 7. Can you give some examples of how we are being more cost conscious with our current design? The current plan is more modest in ways large and small. We are no longer looking to move the kitchen, move exterior walls, or raise the height of the roof. In smaller ways also, the plans meet needs in the most economical way possible. We will be installing a lift in the back, and grading ground in the front to improve wheelchair access. However, we will not be installing elevators. FINANCIAL 8. How much have we raised in the capital campaign so far?
The Capital Campaign has raised $2,282,328, with $902,451 collected. $100,000 of this amount has been pledged recently, contingent on the purchase of 1180 Great Plain Ave. 9. How much did we bid on 1180 Great Plain Avenue? We bid $1,575,000 for the building. This was very close to the amount estimated by the selling broker of $1,500,000, which was based on the property containing 3 lots at $500,000 each. The property is assessed for $2.9 million. 10. How much rental income will we receive from ParentTalk? We have not yet discussed rental terms with ParentTalk other than that we would need them to help pay for a build-out of the space, that we would need a longer term lease (5-7 years), and that we expect they would be willing to pay at least as much as their current rent in Dover. We have discussed the projected build-out costs of the ParentTalk space with them. 11. What do we estimate annual operating and maintenance costs of the new building to be? Based on full occupancy, electrical heating and power are expected to be $25,000. Building insurance is estimated at $10,000. We would establish a major maintenance budget of $12,000 or so per year. These major items add up to $47,000 per year. We expect most of these costs would be covered by revenue from rent from ParentTalk and other potential renters in the space, as well as savings from reduced need for heating in the main church building if administrative staff is not there. There would also be custodial, grounds, and other costs which we would need to discuss with our tenant. We anticipate the net incremental costs for the church budget to be very small, if any. For the main church building, we spend $25,000 per year on oil, $10,000 on electric, $3,000 on water, and under $1,000 on gas. As mentioned above, we think these numbers could be reduced if we do not need to heat a large part of the building just for administration during the week. 12. What do we expect will be the costs of repair and build-out for the Daystar building? The total costs of our planned build-out have been estimated as $307,500 by Deadalus, plus 20% in soft costs. Our budget is $200,000 for this part of the project. We expect to do this within our budget by seeking a price concession from the seller for structural repairs found during due diligence and by having Parent Talk pay for a portion of the cost of building out their space. The costs break down as follows: $34,000 for fit out of the administration, kitchen/dining, front vestibule, telephone and data. $137,500 for fit out of the ParentTalk space including demolition, new entry from west side of entry, and rooftop mechanical fresh air system (required by code) $15,000 for sitework including accessible entry, sidewalk connection to the church, drywell drainage at KASE entrance, and fencing $65,000 for structural repairs required at rear of the building discovered during due diligence $18,000 for new front roof $14,000 for adding sprinkler system backflow valve $14,000 for total sprinkler head replacement $10,000 for miscellaneous improvements (fire alarm, electrical outlets, etc.) 13. What is the expected budget for the main building?
If we purchase DayStar, we have currently budgeted $500,000 for upgrades, repairs, and renovations to the main building. We do not yet have a full plan for how this would be spent. Some items include $50,000 for a new boiler Partial sprinkler system Accessible lift Painting of steeple and other needed areas and waterproofing (partly funded from building maintenance budget) Chapel renovations to be funded from the Chapel fund A plan to open up the corridor area still being worked on (we had a plan that included moving bathrooms, etc. that is too expensive for this budget, so we are working on a simpler plan that can fit in our budget) 14. All in all, do we have sufficient capital and operating funds to afford the plan described? We are on our way to raising the capital we need. We have raised $2.3 million, and with the current plan, we are about 80% of the way there. We still need to raise approximately $500,000 dollars in capital. We have indications that this is doable and intend to continue the capital campaign to raise the remaining amount. Ongoing maintenance will be paid from the rental income of the building s primary tenant, so we anticipate no additional burden on our annual budget. 15. Are we at risk of overreaching? What if down the road we find we ve overextended ourselves? Unlike a major renovation, the new building we buy will remain very marketable if the church needs to reverse course and raise money in future years. 16. Isn t it wasteful to have to heat another building? The heat in the 1180 is electric baseboard. It is not considered efficient heat, and we will want to change it eventually. But in the short term it will likely be an improvement over our current situation in the main church building. As you know the church has people in various rooms seven days a week from the early morning until well into the evening. However the zones in the main church make it necessary to heat large sections of the administrative offices in the middle of our building no matter how many people are working here. There are days when two people are in the office but it must all be heated. There are Saturdays when one of the ministers comes in to meet with someone and the whole section needs heat. In the Daystar building the rooms all have their own individual heat, so it would be much more efficient over all. If we move the administrative offices to Daystar we estimate that we would save on oil and electricity in the main Church building - perhaps 25%. 17. Do we have a design for what we could do to our building with an additional $1.575 million instead of buying the building next door? Significant renovation to the current administrative area of the building and chapel on the upper level including new South entry, new bathrooms, and opening of the administration wing with large windows facing Great Plain Avenue would cost approximately $890,000. Site work on the north side facing Great Plain Avenue and front entrance to the sanctuary to make it fully accessible and renovated would be
$250,000. Including 20% soft costs, would total approximately $1.37 million. Plus, we would need to move the church offices elsewhere in the building. 18. Are we getting a bank mortgage for the new building, or any other bank loans? We do not plan to get a mortgage for the new building. We plan to buy it from capital campaign funds. We will get a bridge loan from Needham Bank for timing purposes, until capital campaign pledges are received in cash. The amount of this loan has not yet been determined, but will likely be between $1 million and $1.5 million. 19. Will donors be asked to speed up their gifts due to the purchase? Donors can choose the timing of their gifts. We will have in place a bridge loan at a 4% interest rate from Needham Bank to allow this. 20. Will we need to tap the endowment to pay for either the new building or for renovations to our main building? We intend to fund capital costs from the capital campaign, and operating costs from a new tenant and do not intend to tap the endowment. For timing purposes, we may lend money to the capital campaign from the endowment if needed. If we are unable to raise the additional $500,000 that is contemplated, a deficiency may need to be funded from the endowment or other funding sources found. OTHER 21. Are there other advantages to controlling the building next door? There are many additional advantages, including: When we rebuild the parking lot and playground, drainage (required to receive a permit for the project) can be routed through the new property to Walnut Street. This is currently not possible because we have not been able to document ownership of the small exit way from our parking lot. This came as a surprise during the permitting process. To our knowledge, nobody in the congregation was aware that there was no documented ownership of the exit driveway. While there may be other ways to achieve drainage (i.e. obtaining an easement or purchasing the exit driveway), it is not certain that this will be possible and is complicated by the abutting property owners needing to gain approval from their mortgage providers. There may be an issue with the DayStar property having rights to a part of our parking lot along the property line. A new owner could seek to claim that property, costing us needed parking spaces. 22. Where do we go from here? The board will reconvene after this meeting to consider what we have heard at this meeting. We need to respond to the seller by June 8 th, which is when our due diligence period ends. We will likely have items to discuss with the seller and we have to consider the zoning and parking issues that have been raised by our attorney. Depending on the severity of these issues, we may have to require an extension to proceed.
23. Per our current bylaws, what is the board s responsibility in making this decision? Do the bylaws call for a vote of the congregation? Has the board consulted with other bodies in the church? The bylaws of the church charge the board with making decisions about real estate and finances. However, the board felt that this decision was of sufficient magnitude that it wanted to get a better sense of what other stakeholders and leaders wanted it to do. The board has asked each minister whether they felt that attempting to acquire the property was the right things to do. All three ministers were strongly in favor. The board also consulted with the Deacons whether it should proceed during an April 17 th meeting called for the purpose. The Deacons counseled the moderator to continue with the current process. We have met with the Deacons again on May 29 to discuss findings and plans. Peter Atallah will address the meeting on June 1 to share the Deacon s discussions. The board has also consulted the finance team in addressing the financing issues. Finally, the board has organized a June 1 meeting of the full congregation (or as many as can attend). At this meeting, the board plans to share its findings to date, answer questions from the congregation, and take an informal vote to understand the position of those attending the meeting. The board takes very seriously the responsibility to make these types of decisions as entrusted by the congregation. The board strongly felt that the speed and number of decisions needed, along with the logistics surrounding the calling of a formal congregational meeting with a quorum, meant that an official congregational vote was impractical, and perhaps not even possible, in the current governance structure. Simultaneously, this is a large enough decision that we wanted to make sure as much of the congregation as possible could be informed and provide input. We know the new governance structure may still feel foreign to some members, but in many ways this opportunity could not have been pursued at all if this more efficient governance structure had not been put in place back in January 2009 because many decisions have already had to be made along the way. We have worked hard to be as inclusive and transparent as possible, while still maintaining the spirit as well as the letter of the Bylaws as they exist now. The board itself recommends moving forward with the purchase of the DayStar building. 24. What needs to be done to bring both building up to code (fire, ADA, energy)? DayStar cost were shown above. The main church building is not up to all current codes, but there is currently no requirement to bring the existing building up to code. We will be making improvements in accessibility and sprinklers as part of the renovation of the main building under any scenario. 25. What were the findings from the inspection? The environmental inspection had no major findings. The building inspection showed that the building itself and the main roof were in good shape. However, the back sunroom area needs to be replaced, and the front sloping roof also needs to be re-shingled. 26. Climate preparedness: Is the DayStar building sound to withstand extreme weather events as expected due to global warming in the Northeast? Is the main church?
We currently have some flooding issues in the basement of the main church, which is being addressed in our planning. The DayStar building does not seem to have flooding issues. For permitting any work on our grounds, we would need to upgrade drainage for a 100 year flood. 27. What will be done to improve the environmental impact of our buildings? We have replaced the windows in the sanctuary and have continued to replace windows elsewhere in our building. We also intend to replace the heating system in our building to be more efficient as part of the renovation, which should pay significant financial and environmental dividends. The new building is newer than our church, and appears to be better insulated. There too, we would be looking to replace the heating system in time. There is much more that can be done, and the board will continue to consider how to achieve goals such as getting solar panels installed.