JACKSONVILLE, Fla. -- The news was a shocker. First Baptist Church, said Pastor Heath Lambert, "was in cardiac arrest."
So in September the largest landowner downtown put most of its real estate on the market.
Once one of the largest Southern Baptist churches in the state, First Baptist's membership dropped by 20,000 in the last decade, with church attendance declining from 10,000 to 3,200. The budget shrank while routine maintenance of $5 million took about one-third of its budget, and deferred maintenance more than half.
The former mega church was "bleeding from its pores," Lambert said.
To solve the debt crisis, the congregation took the bold move of deciding to consolidate its operations into the original church building at 124 W. Ashley St., and offer the remaining 10 blocks for sale.
First Baptist's financial crisis is unusual only in its scope and scale. All of downtown's churches are experiencing declining membership and a drop in revenue.
There are several factors. People are attending suburban churches rather than driving downtown. And fewer people attend church, especially millennials, and when they do attend, they give less money than previous generations.
Churches are having to ask themselves tough questions about who they are, what they do and where they do it.
Two San Marco churches, Southside Assembly of God and South Jacksonville Presbyterian, recently have made major decisions about their property.
Southside Assembly sold its property on Kings Avenue last year for $6 million to Chance Partners, which is building a 486-unit apartment complex called San Marco Crossing. The congregation bought property at Southpoint for a new building that will be known as Lineage Church.
South Jacksonville Presbyterian is selling 2.1 acres of its 2.87 acres on Hendricks Avenue to Harbert Realty Services of Birmingham, Ala., which plans to build 143 apartments called Park Place at San Marco. The church will retain the sanctuary and office space.
In downtown, the Providence Center, adjacent to the Basilica of the Immaculate Conception, is expected to go on the market next year. The former parish school was renovated in the 1980s into offices for Catholic Charities and other ministries of the Diocese of St. Augustine. Catholic Charities moved to the du Pont Center this summer and St. Francis Soup Kitchen is moving to a new location at the end of the year.
And last year, Simpson Memorial United Methodist Church moved out of its deteriorating Springfield property, and now shares space with First United Methodist Church.
It's part of a trend seen across the country. Churches are repurposing their property, either through sales or long-term leases. Some do it out of economic necessity, others as an investment.
In New York, Marble Collegiate Church, a historic church where Norman Vincent Peale was once pastor, is collaborating with HFZ Capital Group. The church, which is a partner in the venture, sold part of its property and air rights to HFZ, which plans to build 600,000 square feet of office space.
"There's a trend throughout the country of urbanization," Casey Kemper, executive vice president at Collegiate, told the Wall Street Journal. "So those religious properties that are well-located in urban areas are attractive to developers."
In Manhattan, St. John the Divine Episcopal Church receives about $5.5 million a year from 99-year leases it holds on two apartment towers, which include market rate and affordable housing that were built on its 11-acre campus.
In Atlanta, two Episcopal churches, All Saints and St. Luke's, which together own eight blocks in high-priced Midtown, are considering partnering with private developers to repurpose some of their property.
Elsewhere in Midtown Atlanta, St. Mark United Methodist Church sold a portion of its property to StreetLights Residential, which plans to build a 26-story mixed use apartment tower.
"If you're sitting on several million dollars of equity that you could trade ... and have millions to help people, then why shouldn't you do it?" Atlanta's Bull Realty founder Michael Bull told Bisnow, an Atlanta real estate publication.
But one church is sitting on several billions of real estate – Trinity Wall Street.
The Episcopal church founded in 1696 in New York City was gifted in 1705 with 215 acres from Queen Anne. Once farmland in Lower Manhattan, it is now some of the highest-priced real estate in the country.
Most of the land was sold over the centuries, but the congregation is still one of the largest landowners in the city with 14 acres valued in 2015 at $3.5 billion. The holdings include 5.5 million square feet of commercial space in Hudson Square that in 2011 brought the church $158 million in revenue and $38 million in net income.
Though the value of the property has waxed and waned over the centuries, Trinity is credited with a recent revival of the Hudson Square area as a creative hub. That caught the eye of the Walt Disney Company, which has signed a 99-year lease with the church for its new headquarters. The deal is valued at $650 million.
Trinity Wall Street is in a league of its own, but the Rev. Lang Lowrey thinks more churches should follow Trinity's lead.
"People say that churches are in decline. I look at it differently. Churches are consolidating and coming out stronger when they do," Lowrey said. "And that leaves a lot of real estate that can be used for mission purposes or income purposes."
Lowrey is the canon of Christian enterprise for the Episcopal Diocese of Atlanta and helps churches figure out what to do with their real estate.
"I tell churches, never ever, ever sell their property," Lowrey said. "You probably won't do that well. Churches get taken advantage of by developers. They want to buy low and sell high."
Some churches are in trouble financially and eager to get out from under their high-maintenance buildings, but Lowrey tells them to think long term.
"Some of these properties are in transitional areas but in 10 years it could be a tony area. You don't want to sell in the valley years. You want to control your property because you might want to have a church there again."
He recommends a long-term lease, usually 99 years, that will give the church revenue while retaining ownership of the property. The paperwork has to be drawn up so the church's nonprofit status is protected and to allow the lease to be transferred if a developer decides to sell. The church pays taxes on the income.
For some churches, it means that the congregation will move to a new location while retaining ownership of the property that is redeveloped.
"It takes a lot of courage by a congregation to relocate," Lowrey said. "Faith isn't just about God. It's also faith in a place. The building becomes part of the faith. What happens is they give and give and give more money to the walls? Why would you worship walls? Why not find a cheaper place to worship and use the property for income?"
In downtown Jacksonville, Michael "Scott" Luckey, pastor of First Presbyterian Church, agrees that church is partly about faith in a place. First Presbyterian brands itself as "the church with the red doors."
The church celebrates its 180th anniversary next year and prides itself on being the "mother church" for other local Presbyterian churches like Riverside and South Jacksonville.
Membership peaked at about 2,000 in the 1940s and 1950s, and is now between 400 and 500, Luckey said.
Some families have been members for five or six generations, Luckey said. Members come from all over the city, including a few who live Downtown. But Luckey said he is hoping membership will rise as people move into the new Downtown residences.
"I'm convinced Downtown has an exciting future, and we want to be part of it," Luckey said. "From our vantage point, we're here for the long term.
"I would love for the city to recognize there are vital churches here in the heart of city. We have something wonderful to offer the citizens of Jacksonville. We want to be part of the greater story."
Luckey said churches are one of the few places where people of all social strata mix. "We have everyone from penthouse dwellers to the homeless. It's an unusual mixture. We welcome and embrace and want to be a resource for all people."
Several times a year, First Presbyterian hosts a musical series, Music on Monroe, which has included concerts by a French pianist, a renowned harpist and a Renaissance music festival. And the church will be part of the inaugural Christmas in the Cathedral District on Dec. 4.
The buildings have an assessed tax value of $2.5 million, but the congregation hasn't considered offering the property for redevelopment, Luckey said. But several nonprofits meet at the church, including the Downtown Ecumenical Services Council, which provides food, clothing and financial assistance for the needy.
The church is involved with Cathedral District-Jax, a nonprofit started by St. John's Episcopal Cathedral to foster the redevelopment around the Cathedral.
The Cathedral has been involved in downtown redevelopment since the 1960s, under the leadership of Dean Robert Parks, who left in 1971 to become rector of Trinity Wall Street. Parks built three high-rises for about 650 seniors and a rehabilitation center Downtown.
More recently, Dean Kate Moorehead established Cathedral District-Jax, which is spearheading the redevelopment of the old Community Connections (YWCA) property next door to the Cathedral. The Vestcor Company is buying the property and plans to build the Lofts at the Cathedral with market rate and affordable housing.
Lori Boyer, chief executive officer of the Downtown Investment Authority, said the churches are an important player downtown because they bring people downtown. But since churches are tax exempt, they haven't contributed to the economic base of downtown.
"The possibility that some church property could be available for development has the potential for activation on more than Sunday and Wednesday, but five or seven days a week," Boyer said. "And it would put those properties on the tax rolls and help contribute to the overall tax base."
The unique thing about churches is their architecture. Sanctuaries are not the most adaptable structures but offices and classroom space are.
That has been the challenge facing the old Snyder Memorial United Methodist Church property on Hemming Park. The historic church, founded in 1870, is on the National Register of Historic Places. The Gothic Revival building of granite and limestone was constructed in 1903 to replace the sanctuary destroyed in the Great Fire of 1901.
The church closed in 1992 and the property was bought in 2000 by the River City Band, which performed in the sanctuary. The city took over the mortgage and has owned the building since the early 2000s after the band moved out.
Several ideas have been floated to convert the church into a museum, a visitors center or a club but nothing has materialized.
Boyer said Snyder is a high priority for redevelopment.
"It's a wonderfully iconic building in the center of downtown," Boyer said. "We have quite a bit of interest. I'm really hopeful we will have some genuine offers within the next 12 months."
At least three groups have expressed interest lately, including one from out of town. Boyer said all of the proposals are revenue-producing.
Also generating a lot of interest is the First Baptist property, 12 acres in the Cathedral District that has seen little redevelopment.
"I think they're trying to be deliberate about what they do with the property so they get what they want and not just sell it off to the highest bidder," Boyer said.
"I would love to have a master plan for that property. From a city perspective, there are few places in the urban core that have that quantity of land that is available. There's an opportunity to do something much bigger, a medical campus or a university presence. It would take time to pull it together, but I'd like to see the possibilities before we lose the opportunity."
First Baptist has not disclosed its plans, but in September, when asking for the congregation to support the sale of the property, Lambert said, "I want to stop the decline of the Downtown church and want to be a better neighbor to Downtown. I think this plan allows us to simultaneously do both."
Downtown, once dominated by the massive presence of First Baptist Church, will have a new look.
Lilla Ross, a former Florida Times-Union editor, lives in San Marco.
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