PazNaz Annual Meeting, April 30, 2023
Agenda Item for Congregational Vote
Potential Sale of Valley Center, a Campus Owned by PazNaz
The PazNaz Valley Center site is located at 5119 N. Valley Center Ave, Covina, CA. The site is 1.51 acres, and the church facilities are approximately 16,000 square feet.
A Brief Bit of History
PazNaz became responsible for the Valley Center church in 2012 and provided pastoral staff and resources for eight years before the congregation determined it was time to close. Subsequent to the closure, the site was rented to a church who wanted to purchase the site but ultimately chose not to do so. Effective April 30, 2023, the current tenant will leave the site.
After extensive discussions about the future of the site, the church board does not think it wise to be a landlord of a property so far from our Sierra Madre Boulevard campus due to the personnel and financial resources necessary to maintain the property. Further, the PazNaz church board has determined that envisioning, launching, and resourcing a ministry 16 miles from the PazNaz campus does not seem a wise use of resources, given the post-pandemic challenges of restoring ministry at the PazNaz campus.
What Is The Site Worth?
In 2022, in anticipation of a possible sale to the current tenant, the property was appraised at $4,800,000. The appraiser is of the opinion that the 2022 appraisal is accurate in April, 2023.
How Much Interest Is There In The Site?
While determining how best to proceed, it was decided to test the market to help inform whether to continue leasing or to sell the property. When the property was made available for sale or lease we were inundated with organizations that wanted to tour the property and possibly purchase the site.
With an asking price of $4,800,000, three organizations, two churches and a school for preschool/Headstart students, submitted purchase offers ranging from $1,750,000 to $5,000,000. We also have one offer to lease a portion of the building.
A Recommendation To Sell
Given the foregoing stated reasons to sell, along with the strong interest of potential buyers, the church board has voted to recommend to the congregation that the church approve the sale of the property and that the board accept the offer that has the highest net return with the fewest contingencies.
How Will The Funds Be Distributed?
Sale proceeds would be distributed in the following manner:
1. Recovery of PazNaz operating losses of approximately $300,000 will be returned to the church operating fund.
2. Cost of sale are projected at 5% - approximately $240,000
3. The Los Angeles District Church of the Nazarene will receive 30% of the net proceeds remaining after 1 and 2 above. - approximately $1,278,000
4. PazNaz will receive 70% of the net proceeds remaining after 1 and 2 above - approximately $2,982,000
How Can The Funds Be Used?
The Manual of the Church of the Nazarene (104.2) indicates that proceeds from the sale of church property may be used for:
1. Capital expenditures
2. Planting new churches
3. Exceptions may be granted by the District Advisory Board
How Would PazNaz Use Our Share Of The Proceeds?
The proceeds that are repayment of the operating losses would go into the PazNaz general operating account.
From the 70% of net proceeds PazNaz would intend to set aside a portion for the following:
1. Capital expenditures for critically needed repairs (such as water penetration, fire system replacement, etc.).
2. Capital reserves to help alleviate future deferred maintenance costs which will be passed to future generations.
3. Community investment in programs to help alleviate suffering and economic hardship in our community, such as employment training, transitional housing for homeless or persons in recovery, bad weather shelter equipment for the homeless, etc. This use of proceeds would require approval of the District Advisory Board.