LDS church announcing downtown plans tonight!

[Archaea]

Originally Posted by UteStar

Just as surfah has said, the church has money everywhere. Besides all the land that has temples, church houses, etc...there is double that in land that doesn't have anything on that and is simply waiting to do something with it like putting up more churches, temples, etc. On top of that, the church has thousands and thousands of acres of land that is being used for dairies, agriculture, etc.

The church comes off looking really good in regards to 'spending' this money...but the church fully expects to make quite a bit of money over the next 20-30 years thru leases, etc. to make up that cost. Generous by the church initially, but the church will do well in getting its return especially when you figure that there will be over 120 stores paying rent every month (and most likely, an expensive lease for each of these businesses) along with the housing units, etc.

You have this development project to go along with Gateway, the new library, the Delta Center, Trax, the Bees stadium and the capitol and you have some good things going on downtown.

You may be correct as the entire project as not been presented to me, even in an executive summary form.

I do know a little about Church finances, and although the Church has positive cash flow, it's not wealthy beyond imagination. Most of its assets do NOT produce income but rather require cash to sustain them. Some of you are characterizing the Church as possessing untold wealth, richer than kings and kingdoms. Not true, the Church must continue ot operate under sound fiscal principles and a series of bad financial decisions could severely hurt the Church.

[SeattleUte]

Originally Posted by fusnik11

I am assuming they feel that if downtown is protected, than the headquarters of the church will always be protected.

It's great for the city, and potentially could be great for the church as they could receive a significant return on their investment, but I could see how it doesn't make much sense for an out of stater.

Two billion dollars cash is a lot of scrilla, makes you wonder how much money the church has and what exactly is the value of the church. The membership is not growing as fast as they claim, Mormons aren't richer than the average American, Utah isn't a center of commerce, I can only assume that outside business ventures of the church are highly successful.

I do find it ironic the church is developing a 'progressive community' as that is what it appears it will turn into.

Back to my Soviet analogy. This really is a planned economy type of thing. Typically, successful developers respond to an instinct for when and where a commercial project will return a profit. Ideally, they build it with borrowed money, lease it up, ideally when it's on the drawing board given the complexity and expense of TI's such as multi-plex and restaurant fixtures, which need to be amortized in the leases. Then because they don't want to be landlords (not their specialty), they'll sell the project to real estate investment trusts and other institutions who want a steady return on something solid. In this sceario the banks are re-paid in cash after earning a good return and everyone is happy, most of all the developer who made a killing. (As a class I've found real estate developers to be kind of crass, unrefined, and flim flam, which to me gives rise to a sublime irony that our great, majestic cities--the pillars of our great culture--are the brain children of these folks. I love capitalism and its manifold ironies.)

When things go wrong, however, the developer has to go through the agony of bankruptry, foreclosure, loss of credit rating, etc. Yes, he may have a corporation to hide behind, but more times than not the bank wants a personal guarantee, and even when protected by the corporate veil he emerges with his reputation in tatters and cannot be spared the agony of protracted litigation. It's a tough, risky business, and when developers get extremely rich, as they sometimes do, it's probably well earned.

My points are: First, no, the Church doesn't have $2 billion cash lying around; it's borrowing the money, and tithing won't be tapped into only if the commercial project is successful. Second, you can't make these types of projects successful just by throwing money at them. I've seen plenty of gleaming, empty, drafty malls in places like Oklahoma, Texas and Alaska where the developers guessed wrong and got killed or came too late and got crushed at the door when the economy softened (is that other mall at Second South going to take this lying down? Seems there's a lot of competition). The Church seems to be acting like local government here. Yes, there are examples such as the Riverwalk in San Antonio, downtown Baltimore and many others where the city injected resources and helped to make a dismal area bloom. But invariably it's a delicate marrying of private enterprise and risk taking and public incentivizing that makes it work.

Hoya and others here know the actual facts; I don't. Who will be the tennants? Most important, who are the anchor tennants? Is the Church selling municipal backed bonds? (ACLU, are you listening?) Is there a commercial lender? Is the temple being pledged as collateral? (This is giving me an idea for a great comic novel spoofing LDS utah culture.) Has anybody seen their pro formas, cash flow projections? Are their assumptions realistic? If law firms were publically traded I think James Cramer would be issuing a buy recomendation for the ones in SLC. Consturction contractors are notorious litigation predators. It will be interesting to see this unfold.

[Surfah]

The website I provided earlier shows the anchor tenants.

[SeattleUte]

Originally Posted by Archaea

You may be correct as the entire project as not been presented to me, even in an executive summary form.

I do know a little about Church finances, and although the Church has positive cash flow, it's not wealthy beyond imagination. Most of its assets do NOT produce income but rather require cash to sustain them. Some of you are characterizing the Church as possessing untold wealth, richer than kings and kingdoms. Not true, the Church must continue ot operate under sound fiscal principles and a series of bad financial decisions could severely hurt the Church.

Yes.

[Surfah]

Originally Posted by Archaea

You may be correct as the entire project as not been presented to me, even in an executive summary form.

I do know a little about Church finances, and although the Church has positive cash flow, it's not wealthy beyond imagination. Most of its assets do NOT produce income but rather require cash to sustain them. Some of you are characterizing the Church as possessing untold wealth, richer than kings and kingdoms. Not true, the Church must continue ot operate under sound fiscal principles and a series of bad financial decisions could severely hurt the Church.

Perhaps I am overstating the wealth. It's not Catholic wealthy. But in perspective, as a small church not even 200 years old it's gross income would certainly thrust the church into the Fortune 500.

You're correct that the Church must continue to use fiscal wisdom in its investments, but that applies to any company no matter their cash flow. Positive cash flow means little when companies like Google and Yahoo can catapult up the Fortune 500. And on the other side of things look at the companies who have fallen out of the Fortune 500. AT&T for example went from in the top tier to out of the list in a single year I believe.

[fuegote]

It's too bad that Real Salt Lake wouldn't build their soccer stadium downtown.

[Mormon Red Death]

Originally Posted by SeattleUte

My points are: First, no, the Church doesn't have $2 billion cash lying around; it's borrowing the money, and tithing won't be tapped into only if the commercial project is successful. Second, you can't make these types of projects successful just by throwing money at them. I've seen plenty of gleaming, empty, drafty malls in places like Oklahoma, Texas and Alaska where the developers guessed wrong and got killed or came too late and got crushed at the door when the economy softened (is that other mall at Second South going to take this lying down? Seems there's a lot of competition). The Church seems to be acting like local government here. Yes, there are examples such as the Riverwalk in San Antonio, downtown Baltimore and many others where the city injected resources and helped to make a dismal area bloom. But invariably it's a delicate marrying of private enterprise and risk taking and public incentivizing that makes it work.

the church has a lot more money than you think. As a financial clerk of a small poorer ward I was very surprised how much money in tithing the church gets. Even when I was a financial clerk for student singles ward at the U the tithing was around 4k a week. If we say that is the average for all the wards in the world (~30,000) we get about 6.4 billion a year in tithing.

[UteStar]

No, I do agree that the church doesn't not have liquid money coming out of their ears. A lot of church property is taken up with its buildings, etc. that do eat money (though that is also tithing payed for)...but the church does have a lot of money in land development (thru ag, dairy, etc.) that do generate some cash.

The church also has some significant money in investments that they can access though they rarely do. This project is not a humanitarian project...they are doing it to preserve downtown SLC (temple square, etc.) as well as to recoup and make money. And as SLC continues to grow, the church is 'risking' a 1.5 billion dollar investment...but it is a project that the church fully intends to recoup the majority of its costs.

[fusnik11]

I was under the assumption the church is not borrowing any money for this project, is that wrong?

If they aren't, that is a lot of liquid money the church has, a lot more than I ever imagined the church had.

The businesses involved, are they going to be held to higher standards?

For example:

Will 'Buckle' be able to sell slut clothing?

Will 'Chili's' be able to sell alcohol?

Will 'Nordstroms' be able to open on Sunday?

Is the church leasing the property or selling the units? If they sell, how do they ensure that the businesses maintain certain standards?

[Archaea]

Man I'm being excoriated just for asking a question on CB.

http://www.cougarboard.com/noframes/...tml?id=2151464