Partner With Another Organization to Build a Joint Property
Basic Description:
NSUC agrees to joint venture or “partner” with another organization to jointly buy land and build a structure that both can use. (For example, NSUC agrees with a private school to search for land together, then construct one or more buildings on site to house the church and the private school.) Each partner will own and have primary use of a part of the building or buildings, but other portions will be shared, such as the parking, the grounds and portions of the structure.
Pros:
- Potential “synergies” by being able to share costs and resources, such as land, parking, and parts of the building. This could mean cost savings for land acquisition, building construction, and maintenance and operation thereafter.
- For example, with a private school, NSUC and the school might be able to share parking (since NSUC’s peak parking demand is on Sunday, when school not in session), share the sanctuary (which school could use during weekdays as school auditorium), some classrooms (NSUC needs them only for Sunday school), playgrounds, etc.
- Though ownership is shared, the sharing is with only one other organization. This may permit ownership form that is less complex than for a multiuse project, and not too different from traditional land ownership (we can feel the dirt, even if we have to share its ownership with our partner)
- May make it possible to bid on and buy a parcel of land that is too big or expensive just for a church
- Probable ease of access to outside space
- Might be possible to design in flexibility for future expansion if needed later
- If the partner is a housing organization, might permit combination with housing development of some type, such as senior or elder-care housing
Cons:
- Control must be shared, thus requiring every major decision to be agreed to by the other party, which greatly complicates decision making
- Complicates the process of finding a suitable site and rezoning since needs and uses of two organizations must be served
- Larger site needed than for just a church
- Parties may well have different needs and desires as to visibility, openness and access to the surrounding community and public transit, etc.
- Requires rezoning to accommodate the uses of both partners
- Complicates the process of designing and building the structure
- Parties need to agree on the main architect to undertake or coordinate the overall design, and to agree on the main architectural style, features, finishes, etc.
- Likewise must agree on the builder, the building budget, time schedule, and all the key construction decisions
- May be difficult to design a structure that meets the architectural aspirations of both partners (e.g., could be difficult to design a joint building that is both a distinctive church and a distinctive school)
- Carries high risk from construction cost overruns and delays because the two parties together must fund all design and investigation costs upfront, and have full exposure to cost overruns, construction delays, etc.
- Each partner carries the additional risk that the other partner may not be able to carry out its share of the financial burdens. If either partner fails, the joint venture fails
- Since the two partners would share the operational and maintenance costs over the life of the joint venture, NSUC would be dependent on its partner’s ability to operate successfully and continue to meet its long term financial obligations
- Would require moving NSUC into interim space for the period of years it would take to find and buy a site and then design and construct the new building
- 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
- Unless the partner is a housing organization, this option not likely to permit combination with housing development of any type, such as senior or elder-care housing
- May reduce long term investment value
- If we ever wanted to sell, would have to find a buyer who would be a compatible organization to share the joint-venture property with our partner. This could be a very limited market (e.g., if our partner is a private school, we could only sell to a buyer suitable to share with a school).
