Before beginning the process, cautioned panelist Mike Greenwald of Friedman LLC, “Make sure to look within your organization and say, ‘Do I have the capability to be a partner in this project? Other than my asset, what else do I bring to the table, and what else do I need to have to protect my interests?’”
2. Get an independent, accurate valuation of the property
Before any group enters into a development deal, they should engage the services of an independent appraiser to determine the value of the property and a zoning expert to determine the buildable square footage. This is the amount of building that you’re allowed to construct on a particular building site. NY State’s Camara added, “It’s important to know the buildable square footage of residential and commercial space as you consider constructing a community center or church expansion in addition to housing. Know the square footage of all available space, including air rights.” Team expertise should also include an understanding of minutiae such as FAR (Floor Area Ratio) to help determine build capacity. Adds NHPF’s Smarr, “This can be daunting since different neighborhoods have different FAR, and zoning code can run thousands of pages.” Some religious institutions “dream big” and must be educated on some harsh realities. An example discussed at the panel was a project where a church’s average Sunday attendance was about 20 to 30 people and the pastor asked for a sanctuary for a thousand. That is an untenable proposal that would receive a resounding “no” from any qualified developer.
The first step for some is to retain an experienced Development Consultant.
3. Partner with the most experienced and knowledgeable people
A religious institution that has made the decision to develop adjacent land or air rights on its property and has determined the value and build capacity now must vet and interview several players in the industry and assemble a team of “good-faith” actors who will respect the religious institution.
The first step for some is to retain an experienced Development Consultant who can size up the faith-based organization’s needs and bring together the necessary expertise, including:
• Legal counsel Seek a firm specifically trained in municipal and state real estate law and with a track record of previous deals. • Accountant Look for the same high-level experience in tax law pertinent to faith-based housing. • Developer Research experienced for-profit and not-for-profit providers, and plan to interview 5–10 contenders. • Builder Whether a congregation is land rich and cash poor or very well capitalized, the builder can budget and plan accordingly to realize the partners’ vision. • Financial Partner Religious organizations have a host of healthy options for financial support, including banks with strong community-lending programs to service affordable or market-rate housing deals.
4. Take advantage of city and state assistance
Supportive agencies at the city and state level stress that although these deals are “long- haul,” two to three years from inception to build if all goes well. State and municipal agencies can offer guidance and help safeguard the investment. Faith-based groups should reach out to these entities as part of their process. In New York, these include:
Putting Faith in Housing: A Primer for All Partners
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