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secure a month-to-month lease well below Market Rates provided we did our own repairs. - PowerPoint PPT Presentation


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From the beginning, space was an issue in Gilbert. We were the first tenants to occupy space and we watched as a Preschool and Nail Salon moved into the Plaza.

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Presentation Transcript
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From the beginning, space was an issue in Gilbert. We were the first tenants to occupy space and we watched as a Preschool and Nail Salon moved into the Plaza.

We wound up subleasing space from Sunrise Preschool who didn’t use their facility on Sundays so that we could offer Sunday School in a more inviting manner.

When the Preschool closed, we approach the Landlord about leasing out the space. We were able to

secure a month-to-month lease well below Market Rates provided we did our own repairs.

Soon after the Preschool failed, so did the Nail Salon. A new Nail Salon is trying to make a go of it, but they are off to a slow start. The Lease for the Nail Salon will most likely have a non-disturbance clause allowing them to operate their business – we cannot see the lease until Escrow is opened.

Fortunately, the IRS does understand Tax Exempt Business rent space to others. As long as Substantially All of the Property is used for the Tax Exempt Business (as defined by the IRS to be 85%); space can be rented and not jeopardize the Tax Exempt Status. Likewise, other Suites can be rented out, but Missional Functions would be preferred to keep within the 85% Rule. Still, we can always file an Unrelated Business Tax Return Form 990-T and not lose our Tax Exempt Status.

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RESOLUTION REGARDING PURCHASE OF GILBERT PROPERTY

WHEREAS, God has given us the opportunity to begin a worshipping community in Gilbert through the purchase of land and the leasing of worship space, and

WHEREAS, that worshipping community has developed a unique identity and mission in the place where it has been planted, and

WHEREAS, God has now given us the opportunity to purchase the entire professional plaza where we are now leasing worship and Sunday School space, thereby reducing our monthly costs, and

WHEREAS, ownership of the plaza will provide an opportunity for increased witness, mission outreach, and additional worship space on a long-term basis, and

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WHEREAS, the Desert Cross Lutheran Church (Ministry) proposes to borrow the sum of $1,887,000. ($1,100,000 for

the Professional Plaza plus $787,000 outstanding on the Spectrum land) from the Mission Investment Fund (MIF) of

the Evangelical Lutheran Church in America under the following conditions:

  • the loan proceeds are to be used for the purpose of
  • purchasing property (Professional Plaza) and refinancing the
  • existing “second site” (Spectrum land) loan with MIF,
  • the loan is to be secured by a first mortgage, or first lien deed
  • of trust or other security instrument, on all of the real property
  • of the Ministry, specifically the church buildings and grounds
  • as well as the personal property of the Ministry,
  • the loan will be for a term of 25 years at an initial interest rate
  • of 4% to be adjusted every 5 years to current rates,
  • the Ministry will maintain at least one investment with MIF
  • through the life of the loan,
  • the Ministry will allow MIF to have a presence on Ministry’s
  • Website, therefore be it
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RESOLVED that (a) the Ministry is authorized to borrow the sum of $1,887,000. from the Mission Investment Fund of the Evangelical Lutheran Church in America, to be used for the foregoing purpose and to be secured by real property of the Ministry as set forth above; (b) the President and/or Vice President of the Ministry are authorized to execute the promissory note and mortgage, or deed of trust or other security instrument , to evidence said borrowing, with such changes in those documents as such officers of the Ministry may approve, (c) those officers are also authorized to take all further actions and execute all such further documents as may be necessary to carry out the foregoing borrowing; and (d) those officers are also authorized to agree to any extensions in the payment dates or due dates under that promissory note as are acceptable to the Mission Investment Fund, and be it further

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RESOLVED that the officers of Desert Cross Lutheran Church also be

authorized to take all further actions and execute all such further documents

as may be necessary to carry out the purchase of the professional plaza, and

be it further

RESOLVED that the congregation council of Desert Cross Lutheran Church

appoint a task force to develop a mission plan (both short and long term) for

the use of the professional plaza on the corner of Lindsay and Pecos and the

land owned within the Spectrum subdivision.