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Old 10-04-2006, 06:21 PM   #41
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Originally Posted by SeattleUte View Post
I wouldn't call MRD's estimate scientific.
That $6B number came from the Time magazine article a few years back. A fellow I know who is a retired accountant who worked for the church told me he thinks its a decent number. If it's off, it's not off by an order of magnitude, and that's how far it would be off to substantially alter the point I was making.
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Old 10-04-2006, 06:23 PM   #42
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Seriously, this seems very strange to me. Spend $2 billion to attract heathens to Mecca, surrounding the sanctum sanctorum with all the glitz and latest trappings of popular Western culture--fancy hand bag shops, multi-plexes, sushi bars, bars. It sums up LDS culture's myriad contraditions. It actually reminds me of some ill-fated Soviet initiative in Siberia. Whatever, it's your tithing dollars at work.
There isn't any tithing being spent on the project. I don't see this as being a religious project in any sense of the imagination. The church is part of the culture of Salt Lake City. It has a major incentive to help the city flourish. The city needed a large investor, and there isn't anyone willing or able to help outside of the church. They stepped in and filled a LARGE gap. I say kudos to them.
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Old 10-04-2006, 06:26 PM   #43
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Okay, sorry to sound a discouraging note, but why should the Church spend that much money to spruce up downtown SLC?

How does that benefit Church membership, especially outside Utah? We could use that much to set up a university in Latin America or to really jump start research at BYU.

Whether tithing or other monies are used is irrelevant. If it's not tithing, then tithing will be used for other purposes to which this largesse of "nontithing" could be otherwise used. The Church is not that wealthy that Two Billion is insignificant. Count me in as perhaps the only card carring member who doesn't think this is a great investment for the Church and its members at large.

I will never reside in Utah and what goes on at HQ doesn't benefit anybody I know.
They are spending a ton of money, no question about it. But as the saying goes, you have to spend money to make money. View this as an investment for the church. They will be raking in huge amounts of rent for a long time. They will have real estate valued through the roof when it is over with and can eventually sell it off if needs be at an enormous profit. They will be selling condos as well.

The church is involved in lots of businesses (one of the largest being real estate). They own more land than the federal government owns in almost a dozen states. This is not out of the ordinary for the church.
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Old 10-04-2006, 06:27 PM   #44
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I have no opinion on how rich the church is. I don't know how anybody not in the highest levels of leadership could. I assume, as Archea said, it must adhere to sound financial decision-making.

But gross revenues are meaningless. Ford MC's revenues are a great deal higher than 6.4 billion and it's going broke. As Archea noted, the great majority of the Church's assets are not income producing. I also assume that until now the Church's investments have been pretty risk-free and stodgy--low reliable return. This I would put more in the high flying category.
Like I posted from the time article over on cougarboard, it was estimated that the church's non-tithe income from it's investments are over $600 million/year. This is a 5 year project and has been in the planning for 3 years. I don't see why it's not believable that the church is not having to take out loans on this.
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Old 10-04-2006, 06:29 PM   #45
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The articles have indicated everything will be closed on Sunday.
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Old 10-04-2006, 06:32 PM   #46
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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.
I would disagree with you. Financially, the church is better off than the Catholic church, IMO. The Catholic church has been devastated by a loss of liquid reserves through litigation awards and failed enterprises. Most of their wealth today is somewhat illiquid (and priceless) in the form of cathedrals, art, etc. While they could sell them (and indeed have sold some small cathedrals of late), could you ever actually sell most of what they hold? Hard to imagine.

The church has lots of liquid reserves. Lots. This project is well within their capabilities.
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Old 10-04-2006, 06:33 PM   #47
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The articles have indicated everything will be closed on Sunday.
I assume alcohol will not be allowed.

It will be interesting to see how they will attract restaurants.
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Old 10-04-2006, 06:34 PM   #48
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I have no opinion on how rich the church is. I don't know how anybody not in the highest levels of leadership could. I assume, as Archea said, it must adhere to sound financial decision-making.

But gross revenues are meaningless. Ford MC's revenues are a great deal higher than 6.4 billion and it's going broke. As Archea noted, the great majority of the Church's assets are not income producing. I also assume that until now the Church's investments have been pretty risk-free and stodgy--low reliable return. This I would put more in the high flying category.
Yes, but you forget some important aspects of the church. They pay for all buildings up front. No debt on any of them. Their land in the US (and most other nations) is tax free. That leaves them with maintenance costs, utilities, etc. Not a tremendous amount of expenses compared to, say, Ford. They pay no workers. There isn't a church union. Trust me when I say they are doing very well.

I don't know with a certainty, but I would be shocked if they were borrowing anything for this project. That goes completely against the church's MO (even though you can actually save a ton of money by borrowing).

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Old 10-04-2006, 06:44 PM   #49
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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.

I'm catching up to all the posts in this thread.

SU, I thought you were a smart lawyer dude. This post is extremely naive and unreasonably skeptical.

"Are their assumptions realistic?" Give me a freakin' break.

"Is the church selling municipal backed bonds?" Are you from a cave and today is your first experience with the church?
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Old 10-04-2006, 06:52 PM   #50
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I'm catching up to all the posts in this thread.

SU, I thought you were a smart lawyer dude. This post is extremely naive and unreasonably skeptical.

"Are their assumptions realistic?" Give me a freakin' break.

"Is the church selling municipal backed bonds?" Are you from a cave and today is your first experience with the church?
Rhetorical questions.

You think their assumptions are sure fire? Why did SLC need an LDS church bail out if downtown SLC is such a sure fire thing for developers? Assumptions are always debatable in this context, dip yewt. You aren't showing me any knowledge other than regurgitating the propaganda. Are their pro formas an instance of modern revelation like the wide streets in downtown SLC?
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