The Sky's the Limit

Holy Cross Roman Catholic Church in New York City sold its air rights and a vacant parking lot to a development company, and the company erected the 50-story residential building that now looms over the church. (By Michael Falco -- Religion News Service)

In the District, Calvary Baptist Church at Eighth and H streets NW sold a building and a parking lot to make way for office buildings in a rejuvenated neighborhood. The $11 million profit was quickly consumed by church renovation projects, and cost overruns put the congregation in the red.

But gleaming new facilities -- five kitchens, a recording studio and a rock-climbing wall -- have reenergized the parish.

Calvary's pastor, the Rev. Amy Butler, said that the young professionals who now call the neighborhood home have helped double attendance on Sunday mornings and that the facilities allow the church to host several new programs.

"This is big-time real estate," said Butler, who said the deal has been both a blessing and a curse, "and we don't know what the hell we're doing."

A few blocks away, First Congregational United Church of Christ plans to raze its 1960s-era building for a new facility that will include condominium units. Church officials are negotiating a deal that will preserve social service programs on site, and proceeds will help build the church's endowment.

Some Catholic churches have gotten in on the game, with St. Paul's Catholic Church near New York's Lincoln Center selling air rights in two deals worth a total of about $35 million. But the most active players appear to be mainline Protestant churches, including Episcopal, United Methodist, Presbyterian and Lutheran congregations. Unlike Catholic churches, in which bishops and cardinals have the final say, the semi-independent status of mainline congregations lets them play the market more freely.

After decades of declining membership, many congregations are using their biggest asset -- their property -- to rethink their ministry and presence in U.S. cities.

There are risks for churches not accustomed to the cutthroat world of urban real estate. Ministers trained in sermons and counseling often find themselves unprepared for hardball negotiations and high finance.

"I'm a new pastor, and it's been Real Estate Development 101 from day one," said the Rev. Donna Claycomb, pastor of Washington's Mount Vernon Place United Methodist Church, which is selling two classroom buildings for an office project worth several million dollars.

An artist's rendering of an eight-story atrium in Claycomb's new building is optimistically filled with young parishioners and children. The average age of her 50-member congregation is 82. "Unfortunately," she said, "the people don't come with the building."

Some church leaders are concerned that a lucrative real estate market has made churches vulnerable to the lure of development. Presbyterians in New York, for example, have launched a citywide building survey to determine which properties could be sold off and which should stay.

The members of West Park Presbyterian Church on New York's Upper West Side were offered $40 million for their crumbling building on Amsterdam Avenue, but they decided to sell air rights for about $15 million to build a 21-story mixed-use condominium tower that will fund repairs to the church.

"We wanted something more creative than finding a developer and just selling [the building] to the highest bidder" and walking away, said West Park's pastor, the Rev. Robert L. Brashear.

Real estate veterans say the big-dollar "walk-away" deals are tempting for aging churches, but they caution against moving too quickly.

"Whatever you do, do not sign anything with the first person who contacts you," said the Rev. Canon Andrew J.W. Mullins, rector of New York's Episcopal Church of the Epiphany, which is planning a condominium project. "I don't care if it's John D. Rockefeller. Don't sign anything."