Buy into a Multiuse Project Being Developed
Basic Description:*
NSUC finds a multiuse project under development in an area of the North Shore to which it is willing to relocate. The project, as envisioned by the developer and partially designed by the developer’s architect, will include a building a portion of which could be reasonably adapted to use as a church. NSUC comes to agreement with the developer on how to adapt this portion of the building for our church, and agrees to purchase the space when it is built.
NSUC enters into a binding contract to buy the space for a fixed price, based on agreed plans and specifications for the space, and pays a significant deposit toward the purchase price. When the space is completed and ready for occupancy, NSUC closes on the acquisition, pays the balance of the purchase price, and moves in.
*Note: This scenario is intended to illustrate the general case of buying into a multiuse project under development by a generic developer, and not the particular case of Seylynn Village being developed by Hynes Developments Inc. That particular case is considered elsewhere (see Seylynn Village).
Pros:
- Because land and parking will be shared, should be major cost savings as compared to scenarios where NSUC buys its own land and provides its own parking
- Should allow more money to be put into the budget for building and equipping the structure
- Should be savings from developer’s economies of scale
- Developer should be able to design and build NSUC's portion of the overall project more cheaply than NSUC could design and build a comparable amount and quality of building as a one-off development
- The responsibility and costs of zoning the land to permit church use would be up to and handled by the developer
- May be able to structure the deal so that NSUC does not have any risk or responsibility for construction cost overruns
- If the multiuse project is a large one, it may well be located near public transit and other public and community facilities
- May allow our church to be closer to and integrated with other uses and activities – be more visible to and more easily able to serve the larger community
- If the overall project includes housing, might permit combination with housing development of some type, such as senior or elder-care housing
Cons:
- Location is limited to wherever such multiuse projects are being or can be built
- Major loss of control, both in the design and construction phase, and in the ownership and operation phase
- Our design flexibility is limited to what will work for the overall project, and by how willing and able the developer is to adapt the building design to suit NSUC needs and desires
- Our preference for following sustainability and “green building” principles will be largely limited to what the developer is willing and able to accommodate
- Since NSUC will own only part of the building, decision making must be shared with other owners in the building, and perhaps with owners of other buildings in the project
- Must share also the responsibility and costs for maintenance of common structural elements and areas
- To get church use permitted in the project, we need to get involved early in the project, before the developer completes the overall rezoning process, and long before project completion. At this early stage, less can be known about the ultimate success of the project.
- Parking must be shared
- Risk that developer will fail to complete our space as agreed, and we have to sue to get our deposit back
- Assuming our space is properly completed and we move in, we have risk that the rest of the project will be greatly delayed, or perhaps never successfully completed
- May result in our being in a “construction zone” for a substantial period, or worse
- Since we cannot spend money or make firm commitments until our contract for Mathers sale becomes unconditional, we can’t make much progress toward securing a used church until then
- Would require moving NSUC into interim space for the period of time it will take after closing for NSUC to find and commit to space in a project, and then for the space to be completed
- Results in an ownership form with which NSUC is not familiar (e.g., an air space parcel, or perhaps a strata unit). We won’t have the satisfaction of owning the ground (“feeling the dirt”) in the traditional sense
- Could be difficult to have convenient access to outdoor space or to natural surroundings
- Probably difficult to design in flexibility for future expansion if needed later
Hypothetical Budget Study
For a hypothetical budget study based on this development option, using arbitrary but hopefully reasonable assumptions, please see Table 3 below.
