Until then, the race is on to see which Colorado Springs industry kick-starts the local economy to solidify its spot in what will become the city’s historical narrative.
All of the usual suspects are talking a big game for 2011, but right now the frontrunner has to be the faith industry, and churches in particular.
Last week we talked to The Springs Church, which got money flowing into the real estate market when it purchased the Phil Long Expo Center for $5 million and then hired a local contractor to manage the build-out.
This week we bring you the Pikes Peak Christian Church, which will be dropping $4.5 million on a build-out that will double its space.
Pikes Peak Christian Church was running into the same capacity problems that provoked The Springs Church to invest in a larger building.
“Our services are crowded and our children’s rooms are full,” said Assistant to the Executive Director Betsy Smith. “We had five full Christmas Eve services and the auditorium was overflowing,”
That auditorium, which previously sat 500, will accommodate 850 after the renovation, and the church’s total square-footage will double to around 56,000.
The church had to get creative to finance the project.
“We looked at getting a loan, but the interest rates were too high,” Smith said.
Instead, it found Miss.-based Rives, Leavell & Co., a firm that specializes in faith-based financing, to assist in underwriting a $4.5 million bond issuance.
The bonds went on sale Jan. 9, and as of this printing will be available for public purchase for another week.
The return is not bad — yields range from 2.9-percent to 7.1-percent, and the bonds can be purchased in maturity increments of six months to 30 years.
Still, investors should research carefully before buying. The bonds are secured by the church property, which is estimated at $5.1 million, but they’re not backed by any higher authority.
The Colorado legislature last year passed House Bill 1141 to comply with the federal government’s SAFE Act.
The purposes of both initiatives were noble, but the Colorado Association of Realtors is working to rein in what it sees as unintended consequences of the law.
In the wake of the mortgage crisis, the federal government moved to ensure the legitimacy of loan originators by requiring all mortgage lenders obtain a license.
That seems sensible (and reactionary) enough, but according to CAR, the blanket legislation impinges on a rare, but important type of transaction.
There are times when a buyer and a seller in the real estate market come together to form a perfect match, but the tight credit market prevents the buyer from securing a loan. If the seller is financially capable and only working on his own behalf, the seller can act as the bank by extending personal funds as a loan to the buyer.
However under the SAFE Act, the seller now has to be licensed as a mortgage lender just to sell his own property. Under the CAR proposition, a seller could engage in three such seller-financed transactions in a year without going through the licensure process.
“We think the folks in D.C. overreacted a little to the fraud problems out there on the mortgage broker side,” said CAR Government Affairs Director Rachel Nance. “But they quickly realized that there are situations where a single person shouldn’t have to go through this process for just a few transactions. It’s nice to see common sense prevail.”
These transactions occur predominantly in rural-area purchases of farms and ranches. CAR’s proposed changes would also apply to attorneys assisting in seller-financed transactions.
CAR is not expecting any resistance to the proposed changes, and an impressive roster of legislators have already signed on.
Rep.-elect Ray Scott, R-Grand Junction, and Sen. John Morse, D-Colorado Springs, will assist in introducing the bill, and two public officials with mortgage lending backgrounds have also signed on.
Sen. Ted Harvey, R-Highlands Ranch, a mortgage broker, and Rep.-elect Chris Holbert, R-Parker, former president of the Colorado Mortgage Lenders Association, are both backing the bill.
Jonathan Easley can be reached at firstname.lastname@example.org or 719-329-5235. Friend him on Facebook, find him on Twitter, and follow his blog at www.csbj.com/realestate/.