City government, Baptists to build church?
Posted December 8, 2006
The Lexington-Fayette Urban County Government may soon be in the church-finance business.
City officials have scheduled a public hearing on Dec. 12 at 6 p.m. to discuss the issuance of $4.5 million in bonds which would be used to finance the construction of Ashland Avenue Baptist Church's new building. (A notice of public hearing appeared in Tuesday's Herald-Leader.)
The Educational, Cultural and Recreational Revenue Bonds would help build a "44,000-square-foot multi-purpose facility, 5,730 square feet of which is devoted to a gymnasium and recreational area, 8,380 square feet of which is devoted to classrooms, 1,670 square feet of which is devoted to a nursery and childcare area, 1,760 square feet for administrative offices, 6,000 square feet of unfinished area, and various improvements to parking, outbuildings, and infrastructure located at 483 Reynolds Road, Lexington, Kentucky." The ad doesn't mention how much of the space will be devoted to worship.
The ad is signed by Julian Beard, director of the Mayor's Office of Economic Development.
Archived Comments
How do church bonds work? Is the city merely giving permission for the church to sell bonds?
Editor's note: According to the ad, the city would be issuing the bonds.
Well If us Lexingtonians are going to buy a church then we ought to be able to open it up for the homeless on cold nights and solve missouri's problem for them. I'm willing to drive to Missouri to get them-uhhh Caleb.
Bearing in mind the Golden Rule: "He who hath the Gold maketh the rules", I am surprised that the Ashland Avenue Baptist Church would want someone else paying for their building.
It's not uncommon for municipalities to issue bonds for corporations that sap community resources by offering only low-wage jobs. Why shouldn't the city support a venture that builds up the community? What's good for a developer is good for Ashland Avenue. You can't treat them differently just because they're a church.
Bonds are different than appropriations. The church, as I understand it, would just be using the city's bond-issuing authority to get good financing. That's different than the city paying for construction of a church, which would be an obvious no-no.
Then purchasers are loaning money to this church, via the city government? That doesn't sound right to me. I wouldn't want the city government acting as financial middle-man for other religious groups I don't support.
What a giant can of worms this is.
I guess I don't understand the transaction. The city is issuing bonds, and will thus presumably be ultimately liable for their repayment, with periodic interest, to the buyers of the bonds. Is the city then loaning the money it raises to the church? Will it take a mortgage on the churh's property to secure the church's repayment of the money?
And here's the most important question in any bond transaction: Who's the underwriter? The underwriter is the brokerage house that initially buys the bonds from the city at a deep discount and then makes its profit reselling them at face value to private investors. Usually underwriting contracts are big pork barrels for the underwriter. If there's enough pork, they'll spread it around among several underwriters. Bond work is big business for some companies.
Maybe someone from the city could go to Missouri with Lisa and me and explain it to us as we pick up a load of homeless people, which is exactly the Christmas present the new mayor wanted . . .
So is this essentially a loan from the city? Why not just get a loan from a bank, like other churches?
The city is essentially acting as a co-signer on a loan to the church. In the even that the church goes bankrupt then the city will be responsible, otherwise this will not cost the city or taxpayers a penny.
I attended Ashland Avenue last week and there is no problem with the financing. They have, I believe two years before anything would really go down, and in 8 weeks they have already raised 20% of the funds they will need. I am not particularly fond of this just because I do not like debt, whether it belongs to the church or the city. However, I agree with a former commenter, if the city can take out debt to finance everything from stadiums, to a failed attempt to condemn Kentucky American Water, this is actually a pretty sound investment.
I do not care how you do your bussiness, but I will give you this little piece of advice from a Northern Kentucky Baptist.
Being Baptist will not keep you from sinning but it will keep you from enjoying it.
You better make sure that their is full disclousure. Full Audits. If this is a non-profit group then you need to see who is on the board, as these things can and have been stacked in other areas with family members. Just because it is a church does not mean that it is honest. Millions of dollars have been lost in Northern Kentucky because of blind oversight and corruption.
John Stephenson
Former Superintendent of Public Instruction
Commonwealth of Kentucky
859-653-7000
Hey Caleb: I did go to BSSH with teresa Isaacs. Even ran around with her sister some, wonder if we could get her to go to Missouri with us?
There is some law on the books that allows government agencies to sponsor some private projects as long as the project is providing a community need. I remember reading it but I don't know its entirety. Hey ,if they neighborhood will enjoy it I say go for it.
Churches do not pay taxes (at least the regions that I have been associated with), therefore I find it asinine that our city is wasting its resources and money towards this project.
Tax churches like businesses and the city can gain more revenue.
I remeber reading something about a community need being filled and bonds or available money coulb be given or issued as long as the need of the people were being met.. Its been a while but I'm sure there something on the books that covers this bond issue.
Good idea, Lisa; I'm thinking that Teresa will have time for the trip soon.
Maybe we should make this a group project, and share our religious heritages with these folks. You can teach the homeless how to dance and sing with both their hands in the air (it's unlikely that most of them can read music, so no need for the hymn in one hand); I can persuade them to wear nice blue blazers with the crests on the pocket, and explain to them what fork to use for their salads; Bart can tell them that they're all going to hell, and Jack can explain why. In some detail.
Teresa is Catholic, so she will want to glue a crucifix on the dashboard of your car (I hope you have a big car; this is getting to be quite a load). Perplexed will help with the crucifix, and show them what hand to hold their rosary in. Elder John can preach awhile, then write some history awhile; no doubt there will be historical events happening on the trip.
And, one thing about it, if we get down there and run out of money, Teresa can probably help us negotiate a deal where the city issues us some bonds to bail us out.
I was there - a member then - when the vote was taken to buy the Reynolds Road property and build the new church. I voted against buying the property, and refused to stand up - although the then-pastor declared the vote "unanimous" anyway. It was a bad idea from start to finish - and it's still a bad idea, over which the congregation has subsequently split into two. Aside from the fact that the city has no business arranging for the financing of a religious institution, the entire premise of mega-churches is seriously flawed. What will happen when gasoline costs makes it impossible for most people to drive to these behemoths far, far away from where they live? Look at Southland, where a good friend of mine used to go. They already can't afford to finish their huge original plan because they've wasted so much money on things people don't need - far, far away from the people who do need them (how, e.g. will the poor of downtown get to that great big kitchen they built out in the middle of nowhere?) These churches have forgotten God's admonition to them: You think you are rich and have everything, but your are poor and destitute in what matters. I am no longer a member of that congregation or their sect for this and other reasons, but that is not why I am protesting this idea. In the end, if they can't afford to build it with the resources God gave them, then the government should not be stepping in to do what God declined to do. But more importantly, there are plenty of people in Lexington, including myself, who don't want the LFUCG in any way responsible for paying for or bailing out or "arranging" funding for any particular religious sect. That is not equal protection under the law, that is favoring one sect of one religion when other religions and other sects have had to raise their own money for their own projects. This is a bad idea that will only spawn more bad ideas all the way around. It needs to be nipped in the bud.
It sounds to me like this bond sale is intended to benefit only a handful of Lexingtonians (less than a thousand church members in a community of nearly 300 thousand) and one church out of many not to mention the houses of worship of other religions as well.
Schedluing the Hearing at 6 pm (the dinner hour) on the same evening as the community Christmas sing at Rupp (that starts at 7 pm)seems like such a cynical attempt to avoid public scrutiny that I hope lots of folks will show up Tuesday night to ask questions and voice their support or opposition to an issue that certainly deserves public scrutinty and discussion.
Uh...right, Caleb. With all the evangelists on board though, best make sure you have all the KFC's along the way mapped out.
Well with that may people going the first thing she gonna have to do is rent a city bus. Oh the city took that over already.
Parson John, since we're headed south, I'll give you three words (well, two and a half:
Chik Fil A
Of course, being owned by good evangelicals, they are closed on Sunday, so we'll have to travel on another day.
Okay, maybe a loyal baptist here could answer this:
If the city is going to use up some of its good credit to take on $4.5 million in debt for a private religious organization, why should it spend it on Reynolds Road, an area already swamped with development?
Shouldn't we be spending that credit in an area that needs it?
Caleb Powers,
The land that the church received is on Reynolds Road. The development there wanted to include a large church so the developers gave the church a great deal on the land, now they have to build the building. In order for the city to lend its credit for someone to build in another part of town they would have to (1) secure a good land price for the church to give them an incentive to relocate (2) convince them to take out debt to build the building (3) let them use the city's credit. In the case of Ashland Avenue the first two steps were already completed. It seems that what you are suggesting would require a much greater level of involvement by the city for the church. If you are comfortable with the city leveraging a developer to get a good land price in an area that needs development (or possibly even condemning a privately held property and giving it to the church) then you simply have more state/church interaction than in this instance.
That's a good point, Robin. I certainly wasn't suggesting that the city organize or run the project at all, and certainly wouldn't want to see the city condemn private property to sell to a church or any other private concern.
But the point I'm making is that if the city is interested in promoting economic development in areas that need it, Reynolds Road is hardly the place to do it.
There are churches in depressed areas, who could certainly take all the steps you suggest privately, just as Ashland Avenue did. If we're going to be in the business of financing churches (which I question in the first place), I'd think we should start there rather than with an organization that could probably get private financing, and is located in a corridor already full of development.
Just curious but, is there precedent for this? I'm assuming it wouldn't have gotten past the legal department if it weren't do-able.