By Paul Schwartzman
Washington Post Staff Writer
Tuesday, February 24, 2009

On a downtown Washington corner, where generations of babies were blessed and marriages celebrated, where prayers were recited and God was praised, is a crater -- 40 feet deep and silent.

The worshipers at First Congregational United Church of Christ did not want their land to appear this way, not by this point.

Two years ago, fed up with their broken-down church and eager to raise money, the congregants sought salvation in the development company PN Hoffman, which offered to erect a 10-story office building and create a new sanctuary within its first two floors.

But the crippled economy has disrupted that plan, as it has at other local churches. Unable to sign a major tenant, the developer has suspended the project, after having demolished the church and digging a hole for a foundation. The church's 100 active members have had to relocate their services to temporary quarters, sharing space with two other congregations wrestling with their own real estate headaches.

"I might die before I see the new church," said Peg Lorenz, 82, a member since 1940 whose mother and grandmother attended First Congregational. She met her husband there as well.

Whenever she goes downtown from her home in Baileys Crossroads, Lorenz stops at 10th and G streets NW, the church's address since the Civil War, hungry for any sign of rebirth. "I want to see some action," she said. "We don't have a place to call home."

In the frenzy of the real estate boom, a wave of Washington congregations formed partnerships with builders, selling parking lots and development rights to raise cash to fix up buildings and strengthen ministries.

But as the economy has faltered and construction has all but ceased, congregations are postponing or altering plans. In one case, a substantial portion of the profit that St. Luke's United Methodist Church made selling land on Wisconsin Avenue was lost in the stock market, helping to force the congregation's merger with another. In another, Metropolitan Baptist Church's 2,000 congregants are worshiping in a school after construction on a new sanctuary in Largo stalled midway because the church couldn't find a bank to lend it additional funding, the Rev. H. Beecher Hicks Jr. said.

"Timing is everything," said Terry Lynch, executive director of the Downtown Cluster of Congregations, a consortium of more than 40 churches and synagogues. "Those who got their projects done are in a much better situation. Those that hoped to redevelop or modernize are facing tremendous challenges."

First Congregational's plight is unusual because the project stopped after work began. PN Hoffman needs to secure construction financing before it continues, something it cannot obtain without leasing 60 percent of the building. The developer has not found any tenants and acknowledged that it could be as long as two years before work resumes.

In the meantime, First Congregational's members have had to adjust to sharing space at another church eight blocks away and shifting their Sunday worship to the afternoon.

An organization that served the homeless at First Congregational for more than 30 years followed the church to its temporary quarters. But the project's difficulties are causing awkward discussions about whether the program can return when the church rebuilds.

The church members have learned that they are not alone in coping with a dramatically altered economic landscape. Their temporary home is First Trinity Lutheran Church, whose leaders have found their own talk of redeveloping their property at Fourth and E streets NW affected by the turbulence of the real estate market.

Thomas Knoll, First Trinity's pastor, said discussions have grown more difficult because developers are unwilling to specify how much they would pay, perhaps because land values are in flux. At the same time, he said, builders express eagerness to start planning.

"If we said we're ready, we'd go to the congregation and they'd ask, 'What do we get?' " he said. "And we can say, 'We don't know yet -- we're going to start the process, and we'll find out when we're ready to start building.' The congregation's not going to go for that."

First Trinity is also the temporary home of St. Matthew's Evangelical Lutheran Church, which knocked down its home in Southwest Washington last year and hopes to build housing and a new sanctuary. The changing housing market has forced St. Matthew's, in partnership with the Trammell Crow Company, to substitute rental units for condos in its plans.

"The uncertainty of the economy has caused us to move more slowly," said Phil Huber, the church's pastor.

Huber worries that the church's prolonged absence from Third and M streets will weaken its ties to the Southwest community. In December, Huber returned to the church's lot -- now vacant and fenced-in -- to sell Christmas trees and hand out holiday music. "More than anything, it was to remind them that we hadn't left," he said.

In the past year, construction has slowed markedly across the region, leaving a rash of vacant properties. During past downturns, developers have turned such sites into cash-generating parking lots. But District officials hope to encourage more lively uses, launching what they call "Temporary Urbanism," in which they identify parcels where farmers markets, flea markets or other forms of retail venues could operate until construction begins.

"There are great things about parking but surface lots are, in a lot of ways, the very thing that would epitomize blight," said Harriet Tregoning, director of the Office of Planning.

First Congregational's site cannot be used for anything because the entire lot is a hole. At the edges are banners still touting the development, including one that reads, "We're building a new church on this site!"

The church was founded by abolitionists in 1865 and was the District's first integrated congregation, members said. Its original home on the site, a stone building, was torn down more than 45 years ago and replaced by a brick structure that fell into disrepair before being razed last year.

In 2006, at the height of the real estate market, the congregation and PN Hoffman reached an agreement to redevelop the property.

In their first plan, the developer and the congregation envisioned a condominium that included the church and the homeless services program. The developer switched to offices after the condo market tanked.

From the start, PN Hoffman and the church have touted the importance of including the homeless program in the new building. But now it's uncertain whether the program will come along when the church moves back.

In August, as it prepared to seek financing from banks, PN Hoffman and the church imposed parameters on what services the organization, known as the Dinner Program for Homeless Women, could offer. They barred the program from offering ongoing psychiatric counseling as well as medical treatment. And the developer wouldn't grant them a lease.

Steve Earle, a PN Hoffman executive, said the developer is a supporter of the program, having raised $50,000 for it at a 2007 charity golf tournament. He also said that the program has grown since it relocated and that PN Hoffman wants to confine its services largely to the meals it had provided when the church and developer formed their alliance.

No lease will be offered the homeless program, Earle said, because "if they break the rules and they don't fix it, we need the right to get them out of there."

Erika Berry, the program's executive director, said it had offered the psychiatric and medical treatment before relocating. She is concerned that the program won't be able to continue providing HIV and tuberculosis testing. Although she hopes to find a resolution, Berry also said, "Our focus is on making sure there is no negative impact on" clients.

Meg Maguire, a church leader, said that offering a full menu of services to the homeless became more problematic as the economy faltered and lenders grew concerned that the site would be less attractive to prospective tenants. "What they don't want is full-service psychiatric and medical treatment," she said.

At the moment, Maguire said, completing the project is the church's main focus. "We're a faith community," she said. "There's a lot of faith that this will happen. It's just a question of time."