Fund Defends Brokers System
Officials of the Lutheran Church Extension Fund say that the fund’s regional brokers are a key element in the success of its “advance site program,” designed to provide land for new churches cheaply.
Before the brokers, they say, land was purchased locally without adequate study of previous titles, encumbrances and government plans for condemnation, placing in jeopardy the LCEF loans. Some parcels are still being held by the LCEF, with little prospect that they will be used for churches or sold commercially.
“We’ve got some real dogs here,” said Gerald Wendt, the LCEF’s vice president for mortgage loans.
In general, he and other LCEF officials explained, tracts are purchased with the idea that a portion will later be sold off at the market rate in order to sell the church sites at an affordable price to new congregations--making money for the fund and regional church administrations at the same time. With the fund’s deep pockets, the regional brokers are able to make cash offers for choice land destined to rise in value if held long enough.
Sometimes, the land purchased for advance sites becomes so valuable that the entire parcel is sold commercially and a smaller, alternative site is found for the church. Each time one of these commercial transactions takes place, the “regional broker” receives a commission. In the last three years, according to the LCEF, the number of advance site purchases has risen dramatically to 175 parcels, valued at $32 million.
Among the more spectacular success stories, provided to The Times by the LCEF are:
* 20 acres in Penasquitos in San Diego County, purchased in 1978 for $163,280 ($8,164 an acre); less than a year later, 17 acres of this parcel were sold for $450,000 ($26,470 an acre); the remaining three acres--now worth about $240,000 ($80,000 an acre) on the open market, are available to a local congregation for $33,569 ($11,190 an acre).
* 20 acres in Phoenix, purchased in 1971 for $90,000 ($4,500 an acre); in 1978, 16 acres were sold for $146,331 ($9,148 an acre); the remaining four acres--now worth an estimated $360,000--are available to a local congregation for $28,040 (7,021 an acre).
* Eight acres in Lilburn, Ga., outside of Atlanta, purchased in 1974 for $48,373 ($6,000 an acre); in 1985, 2.9 acres were sold for $222,148 ($76,000 an acre); the remaining five acres were sold in 1986 to Oak Road Lutheran Church for $18,010 ($3,602 an acre).
