Wednesday, October 24, 2012

Mars Hill Downtown in 2007: "It has appraised at over $1M more than our purchase price. So instantly we have $1M in equity ... "

http://joyfulexiles.files.wordpress.com/2012/03/elders-response-to-questions-11-9-07.pdf
December 2007
FROM STEWARDSHIP
responses submitted by Pastor Jamie Munson
p 74
We have been looking for a space in downtown Seattle for well over six months. The process of finding, negotiating and ultimately leasing or purchasing a piece of property takes some time to do so. The church has known for sometime we were looking for a space and when we found a specific property we informed the members on the members site to this fact.  In addition we announced this on Sunday from the pulpit prior to closing on the propety.  We were careful to not publish the information too broadly or too prematurely knowing it would garner a lot of attention because of its past. We have obtained a loan for 80% of the 3.95M purchase price and have raised the funds for the 20% down payment, primarily from the core group that will be attending the downtown campus. All of these announcements have been on the members site to view.  The building we have purchased is at 2333 Western Ave in the heart of Belltown. It has appraised at over $1M more than our purchase price. So instantly we have $1M in equity and a good building that will take minior modifications to be used as a church. In addition the zoning of the property permits building up to 85 feet on the property so it is an attractive piece for future redevelopment if Jesus should lead us in that direction. In addition, immediately after our offer was accepted the seller of the property had 3 back up offers so there is significant interest in this property that Jesus has blessed us with. When looking to purchase property we use several qualified consultants which include our bank, developers, real estate brokers, attorneys, architects and good business men and women to speak into the decisions. 

It's been a mystery how Munson concluded that the 2333 Western Ave real estate was appraised at $4.95 million and that this meant $1M in instant equity.  "It has" didn't tell a whole lot about when the appraisal was made, who made it, and on what grounds the appraisal was made.  Available information suggests that the appraised value of 2333 Western Avenue was not at $4,950,000 in 2007.

http://www.city-data.com/king-county/W/Western-Avenue-32.html
According to this link in 2007 the land was assessed at a value of $2,304,000.00.  The building was listed at $1,000.
Sale date: 10/25/2007
 Price: $3,950,000
 Seller: ROCKET ENTERPRISES INC
 Buyer: MARS HILL FELLOWSHIP
 Sale instrument: Statutory Warranty Deed

Read more: http://www.city-data.com/king-county/W/Western-Avenue-32.html#ixzz2AFjP7yWG
At least according to city-data.com the value of the in 2007 was $2,304,000 and the value of the building was $1,000.  Then the value of the land land plunged down to $1,370,900 and the building was still listed at $1,000 in 2008.  If the value of the land, according to city-date.com was $2,304,000 and the building was worth $1,000.00 then how did buying 2333 Western Ave constitute one million dollars in instant equity?   Now it's possible that the information at city-data.com could be inaccurate and it's not entirely clear who might have provided Mars Hill with an evaluation that said 2333 Western Avenue was worth $4.95 million (thus leading to Pastor Jamie Munson concluding that by buying the real estate at $3.95 million Mars Hill somehow got $1M instant equity). 

Currently 2333 Western Avenue is available for sale at a price of $4,500,000.00 with the following group

http://www.churchadvisors.net/new-listings/2012/8/4/former-union-hall-near-pike-place-market-seattle-wa.html

If you go to their front page ...

http://www.churchadvisors.net/

Mars Hill Church Bellevue Bellevue                LEASED          27,461SF    Long Term
Mars Hill Church                Belltown                SOLD              14,400 SF   $3,950,000
Mars Hill Church                Ballard                   SOLD              84,150 SF   $7,300,000
Anchor Baptist Church       Lake City               SOLD              18,000 SF   $2,000,000

Keep in mind that Anchor Baptist Church was the real estate that was, at one point, Mars Hill Lake City. Church Advisors has played a role in connection to at least four pieces of real estate that have had something to do with Mars Hill.  Who exactly conveyed information to Jamie Munson that 2333 Western Avenue was valued at $4.95 is still not clear but someone gave Munson the idea that the real estate that became Mars Hill Downtown from 2007 to 2012 was worth $4,950,000.

But let's suppose city-data.com could have gotten some things wrong.  Maybe the real estate didn't lose at least a million in value between 2007 and 2008.  Perhaps there's a way to establish how someone could have been convinced that what became Mars Hill Downtown was worth a cumulative $4.95 million as would be the case if Munson's report in 2007 said it was.  What can we find that's available from King County listings?

http://info.kingcounty.gov/Assessor/eRealProperty/Dashboard.aspx?ParcelNbr=0654000315


Parcel Number 065400-0315
Name MARS HILL FELLOWSHIP
Site Address 2333 WESTERN AVE 98121
Legal BELL AND DENNYS 1ST ADD POR TAXABLE



Valued Year Tax Year Appraised Land Value Appraised Imps Value Appraised Total Taxable Land Value Taxable Imps Value Taxable Total
2012 2013 $2,736,000 $741,300 $3,477,300 $1,247,600 $0 $1,247,600
2011 2012 $2,736,000 $779,400 $3,515,400 $1,247,600 $0 $1,247,600
2010 2011 $2,736,000 $733,500 $3,469,500 $1,247,700 $0 $1,247,700
2009 2010 $2,736,000 $800,700 $3,536,700 $1,247,700 $0 $1,247,700
2008 2009 $2,736,000 $794,200 $3,530,200 $1,247,700 $0 $1,247,700
2007 2008 $2,520,000 $1,000 $2,521,000 $1,149,100 $0 $1,149,100
2006 2007 $2,304,000 $1,000 $2,305,000 $2,304,000 $1,000 $2,305,000
2005 2006 $2,016,000 $1,000 $2,017,000 $2,016,000 $1,000 $2,017,000

Maybe someone can spell out where this indicates that 2333 Western Avenue in Seattle was appraised at $4,950,000 in 2007 when Mars Hill bought it. 

Now the people who would be in a position to know, in theory, how Munson came to the number of $4.95M were the executive elders who were in place when the bid was made on the property.  For sake of review here's the criteria for eligiblity for executive eldership at Mars Hill prior to the end of October 2007.

http://joyfulexiles.files.wordpress.com/2012/03/bylaws-prior-to-10-29-2007-official-mars-hill-church-bylaws-2-11-06-rev.pdf

Section C
The executive elder team shall consist of men who meet the following criteria in addition to the qualifications and duties of an elder outlined in Article I:
* The elder must be a full-time employee of Mars Hill Church
* The elder must have served as an elder for at least one year [emphasis added]
* The elder must nominate himself for consideration to be a member of the executive elder team
* The elder must receive a two-thirds vote of approval by all elders
* If more than seven men meet these criteria, then those seven men receiving the highest number of votes will be accepted
* If there is a tie among two or more men for the seventh seat on the lead elder team, a new vote will be taken by all elders (on only the seventh position) with the man receiving the highest vote total being appointed to the lead elder team.


And here's an overview of the powers and duties reserved for the executive elders from the same set of bylaws.

http://joyfulexiles.files.wordpress.com/2012/03/bylaws-prior-to-10-29-2007-official-mars-hill-church-bylaws-2-11-06-rev.pdf


By-Laws of Mars Hill Fellowship
A Nonprofit Corporation Without Members


Article VI
The Executive Elder Team


Section E

Except for those powers and duties reserved for the full Council of Elders under Article VII, Section A and RCW 24.03.112 or similar statute, the following issues are reserved for determination by the executive elder team and may not be decided by a Departmental, Site, or Ad Hoc Elder Team:


  • Establishing the overall vision for the entire church
  • Purchase, sale, or rental of real estate
  • Approving new services and venues
  • Comprehensive operational budget line items
  • Capital expenditures budget
  • Hiring and firing of elders who are also employees (the employment status of an employee who is also an elder may be determined by the executive elder team, but such person's status as an elder is reserved to the full Council of Elders)
  • Issues delegated or reserved to the executive elder team by resolution of the full Council of Elders


Section F
For an issue to meet the approval of the executive elder team it must receive a unanimous vote (abstention permitted).


Now after a bit of slogging through old documents it can be established who the executive elders were as of June 2007:

http://joyfulexiles.files.wordpress.com/2012/03/elders-response-to-questions-11-9-07.pdf

Appendix B (p 113 of 145)
Mars Hill Re-organization document
previously sent to members on June 23, 2007
(pages 3-4)

Changing our Executive Team
A pivotal shift was streamlining our Executive Team. On June 11 at the All-Elders' meeting, Pastors Tim (Smith), Steve (Tompkins), Mike (Wilkerson), James (Harleman) and Lief (Moi) stepped down as Executive Elders. Subsequently, Scott Thomas and Bubba Jennings nominated themselves as Executive Elders and were voted in, establishing the Executive roles corresponding to the new team structure and transitioning the other pastors to their new roles in the revised organizational structure. Additionally, Tim Beltz, who is an elder candidate, is serving on a consulting basis to the Executive Elders and helping provide a wealth of nonprofit management experience to our decision making.

So during June 2007 Smith, Tompkins, Wilkerson, Harleman and Moi all stepped down as executive elders.  Mark Driscoll and Jamie Munson remained executive elders and Scott Thomas and Bubba Jennings nominated themselves.   

In a "where are they now?" overview, here's what can be learned about the people who could have been in a position to know why Munson claimed that 2333 Western Avenue was valued at $4,950,000. 

Jamie Munson is currently co-president of Storyville Coffee Company and is not a paid elder at Mars Hill.  He's co-president with a 5% ownership in the company, another 5% is owned by Kris Rosentrater, and 90% is owned by Jon Phelps.  See notes from minutes below at a neighborhood preservation shindig:

http://www.seattle.gov/neighborhoods/preservation/documents/MHC4.11.12.pdf

Scott Thomas is Pastor of Ministry Development at Darrin Patrick's church The Journey.
https://twitter.com/scottythom

Although if you go to the Ministry Development segment for leadership at The Journey you may not necessarily find Thomas.  He may have finally resigned his membership at Mars Hill or perhaps he hasn't.  See if you can find Scott Thomas listed in leadership at The Journey on The Journey's website.  He must be there and, at any rate, he preached a few sermons. Acts 29 seems too  complementarian to have their one listed person in Ministry Development be someone named Katie unless Patrick is more egalitarian than the average Acts 29 pastor.

http://thejourney.org/leadership/staff/ministry-development

Bubba Jennings is poised to plant Mars Hill Tacoma and is currently listed as lead pastor at Mars Hill Federal Way.

http://marshill.com/pastors/bubba-jennings

Then, in very late October 2007 there was Tim Beltz.  That Tim Beltz was a consultant in earlier 2007 has been established.  "Consultant" would not mean actual pastor at Mars Hill would it?  Even if it could have been said that Beltz was an employee by way of being a consultant he couldn't have been a full-time consultant while he was COO at CRISTA Ministries.  He was also listed as an elder candidate in June 2007 which would have made it impossible for him to be eligible in October 2007 to be an executive elder right away.  But he wasn't installed until October 29, 2007 after the firings of Meyer and Petry got wrapped up and the newer by-laws were passed.  By that time the purchase of 2333 Western Avenue, the old club Tabella, had also been wrapped up.  So there were four executive elders in place at the time the bid was made and it would appear there was unanimity of some kind about the purchase and the purchase price.  After all, that's what the by-laws would have called for.

So where the purchase of 2333 Western Avenue by Mars Hill was concerned , to go by the June 2007 statement,  the executive elders who would have overseen that process were Mark Driscoll, Jamie Munson, Scott Thomas, and Bubba Jennings.  Church Advisors also seemed to play a role in significant real estate acquisitions undertaken by Mars Hill from roughly 2005-2007 and has announced that the old Tabella (i.e. 2333 Western Ave) is available for sale at a price of $4,500,000. 

What is also clear is that Munson was willing to say the real estate had been appraised at $4,950,000 and that Mars Hill having bought the real estate meant one million dollars in instant equity.  How he got this number and why he and other executive elders thought it was a reliable number remains a mystery.

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