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Churches Look to Residential Real Estate Development to Support Congregations

"We've always wanted to serve the whole man," said Peebles, who moved the church to larger quarters where it could be closer to its congregants and expand its ministries. The apartment complex, which includes 110 affordable-housing units, complements the church's Christian training center, elementary school and youth center, she said.

Jericho, which paid off its mortgage in seven years, purchased the property for the apartment complex in 2007 for about $4 million, according to land records. It took out a mortgage on the property for $3.6 million.

Evangel Cathedral, another megachurch in Prince George's, with a membership of about 4,200, is seeking approval of a detailed site plan for a more expansive project. It would include 640 townhouses and multifamily units and 3,000 square feet of retail space on about 50 acres. Known as the Moore property, the site is in an unincorporated, rural area north of Route 4 just outside the District. The Evangel project is part of a larger 534-acre mixed-use development known as Westphalia, which would include 15,000 homes and about 6 million square feet of retail and commercial space, hotels and restaurants and a half-dozen schools.

The United House of Prayer in the District, which has built hundreds of apartments in the Shaw neighborhood, filed an application in March with the Zoning Commission to rezone property the church owns off Rhode Island Avenue NW, between Sixth and Seventh streets. The application to rezone the building for 16 apartments is scheduled to be reviewed Sept. 10 by the commission.

Parker, who is general counsel for Greater Morning Star Apostolic Ministries, said the church bought 50 acres off Ritchie-Marlboro Road in Largo when it moved from Northeast Washington in the mid-1980s. The church planned to build its sanctuary on the top of a hill and leave the rest of the property vacant but recently decided to bring in housing developer Trammel Crow Residential to plan a project on 15 acres there.

Like all of the other church developments, the Trammel Crow project is intended to appeal to many buyers but will provide congregants the opportunity to live within walking distance of their church.

The Prince George's District Council, which is made up of the County Council and reviews zoning cases, granted conditional approval of the project last year. Trammel Crow is preparing its detailed site plan.

"People are still working projects through the approval process on the assumption that financing will be available a year or two from now," said Tom Bozzuto, chief executive officer at Greenbelt-based Bozzuto Group, a construction and management firm that has worked on numerous church projects. "But in terms of actual starts, it's tougher to get financing than it was a year ago."

Patrick Ricker, a broker and developer who is working on the Moore property project with Bishop Don Meares, senior pastor of Evangel, said he will begin negotiations to sell the 375 lots to builders after the detailed site plans are approved. The plans have been filed, but it is not clear how long approval will take, said Ricker, who is not a member of Evangel.

"From a church standpoint, it's smart" to diversify, Ricker said. "It's just like any other investment, like buying a CD or buying stock." The Moore property is not Evangel's first real estate investment. Several years ago, the church sold land next to its sanctuary on Route 214 to a builder to construct an active-adult complex. Cameron Grove has 735 homes, including single-family houses, duplexes and condominiums.

For the developers, one advantage is that they can get tax credits for agreeing to work with nonprofit groups. Tax credits vary based on the project's location.

Bozzuto Group first began partnering with churches in 1994, when the company worked with Reston Interfaith Housing to build 48 apartments in Reston's North Point neighborhood. The units are for working families who pay below-market rents. Since then, Bozzuto has seen an increase in the number of churches becoming involved in housing developments.

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