Development Has Become New Savior for City Churches

By Paul Schwartzman
Washington Post Staff Writer
Wednesday, October 31, 2007

The slate roof was deteriorating, the interior walls were crumbling, and the stone steps leading to the sanctuary were leaking. Running out of cash and down to their last 88 active members, congregants at Mount Vernon Place United Methodist Church were resigned to their spiritual home fading away.

Then they found a savior, one decidedly more secular than the one they're accustomed to celebrating: a developer willing to pay cash for property the church owned next door, a parcel in the newly gilded neighborhood around the Washington Convention Center.

The $26 million sale allowed the congregants to not only restore the 90-year-old church but also buy space in an adjoining building, part of which they plan to rent to a coffee bar. A steaming latte, the pastor hopes, might be just the ticket to draw young professionals into the church.

"We were nearing death," said the Rev. Donna Claycomb, Mount Vernon's pastor, seated in a construction trailer outside the church, her makeshift office during the project. "Now we're building and growing."

A generation ago, as waves of residents left the District, a flurry of Washington congregations began selling churches and moving to the suburbs. But a new pattern has emerged as the city has undergone a renaissance. Congregations still sell their earthly possessions, only now they're using the cash to renovate their existing churches and bolster ministries.

The deals have thrust pastors into a realm unplumbed at the seminary: high-stakes real estate, with its arcane zoning, massive construction projects and multimillion-dollar deals.

One downtown church has even envisioned a way to sell the air over its sanctuary and build a new home at the same address.

"If congregations are going to physically and fiscally stay in the city, they have to become as savvy as other property owners, or they'll be priced out like anyone else," said Terry Lynch, executive director of the Downtown Cluster of Congregations, a consortium of 43 churches and synagogues. "To meet the array of financial challenges is a huge drain on resources."

In recent years, at least eight Washington congregations and one religious organization have negotiated deals with developers that allowed religious groups to fortify their ties in such neighborhoods as Penn Quarter, Logan Circle and Glover Park.

The Catholic Archdiocese, for example, leased a portion of the block it owns along 10th Street NW to a developer who built an office building. The deal generated revenue that allowed the archdiocese to open a downtown office for Catholic Charities.

On Wisconsin Avenue, St. Luke's United Methodist Church made $6 million selling an adjoining parking lot to a developer, who built Georgetown Heights, a condo with apartments priced as high as $2 million. Before the sale, the church's Sunday attendance was down to two dozen worshipers. "It was sell the land or close the doors," said Shalom Mulkey, a church administrator.

In Penn Quarter, members of First Congregational Church spent years trying to divine ways to replace their antiquated sanctuary without moving from 10th and G streets NW. The answer, it turned out, was skyward. The church is close to selling its air rights to developer PN Hoffman, which is planning a 10-story office building; the first two floors will be occupied by First Congregational.

The church will still have space for its meals program, serving hundreds of homeless people daily.

A few blocks away, Calvary Baptist Church raised $12 million selling two parcels and air rights to a developer who put up offices at Eighth and G streets NW.

The congregation's usual dilemma, how to raise money, was supplanted by how to use it. Replacing the church steeple and reconstructing two buildings were obvious needs. But a kitchen the church had planned for feeding the homeless seemed outdated, partly because the area had become more affluent. Instead, Calvary uses the kitchen to teach youngsters, one of the youth programs the church now hosts as a result of the development.

The project also created problems that tested the congregants' resolve, problems that went beyond practicing their faith amid the dust bowl of a construction site. Building costs soared so high that, by the end of the project, the church had no money to add to its endowment fund.

"We were dealing with large sums of money and the huge vastness of a project that is unfamiliar to us as a congregation of faith," the Rev. Amy Butler said. The costs "are natural parts of multimillion-dollar development," she said. "But how could we know that? If we were developers, we would have."

Churches began leaving the District in the 1980s for more space, easier parking and greater proximity to their congregants. The exodus included three large congregations that moved to Prince George's County: Evangel Temple, Jericho City of Praise and Turner Memorial AME Church.

Congregations are still migrating to the suburbs -- Metropolitan Baptist Church in Logan Circle is moving to Largo -- even as others use their land to secure their place in the city.

Yet not all churches are playing the real estate game. Shiloh Baptist Church has incurred the wrath of neighbors in Shaw by allowing seven buildings it owns to sit vacant for years. The Rev. Wallace Smith said the church prefers to turn the properties into affordable housing rather than allow developers to build condos, drive up neighborhood prices and "displace persons."

"We have no intention of allowing people who ran away from the city to now come back and buy our properties for what they would consider to be a pittance," he said. "We've been here."

The Mount Vernon church has also been a fixture, occupying its neoclassic-style home on Massachusetts Avenue since 1917. The fact that the church is enmeshed in its own construction project is a striking reversal of fortune.

A few years ago, the church's membership, which had reached 4,500 in 1960, had fallen below 100, with an average age of 82. Unable to draw new members and with $1 million in the bank as it faced mounting repairs, congregants resolved to "basically die with the church," Claycomb said. "The thought was, 'We tried to do everything, and nothing was working.' "

But the church's future improved when a developer, CarrAmerica Realty Corp., became interested in land Mount Vernon owned next door. Claycomb found herself in negotiations that grew rapidly more complex as CarrAmerica was bought by another company, which then sold its District holdings to Tishman Speyer Properties, a New York real estate company.

"It was the closest thing to hell I've ever experienced," Claycomb said of the period of negotiations, during which the church existed in limbo. "There were 80-year-old congregants wondering, 'If I die, where's my funeral going to be?' "

Carr Properties eventually bought the parcel, less than half a city block in size, and razed two small church-owned buildings. Carr is planning a 12-story office building, and the church will own a portion of three floors, including space for the coffee shop. As a result of the deal, the church is financing a $9 million renovation.

The sale, Claycomb said, has given the church a chance to recruit a new generation of Washingtonians moving downtown. She glanced out her window toward the horizon at CityVista, a condo rising in the distance with a rooftop pool.

"If we don't reach them, we're doing something horribly wrong," she said.

Claycomb described her role as one she never imagined during her religious study. "I'm developing a congregation and this building at the same time," she said. "I'm a spiritual leader and a developer."

The gush of money created by the sale, she said, poses challenging questions for a church typically more focused on spiritual concerns. "We're spending millions on these buildings; is that good?" she asked. "It depends on how you use the money, if you're using it to work on city problems. We can't just come back and have tea parties."