McGraw-Hill Report Finds Construction Market to Increase 11% in 2010

McGraw-Hill Construction of New York, N.Y., part of The McGraw-Hill Cos., released its “2010 Construction Outlook” in October 2009. The report, a mainstay of business planning for construction—including church building—forecasts an increase in overall U.S. construction starts for next year. According to the report, the level of construction starts in 2010 is expected to climb 11% to $466.2 billion, following the 25% decline predicted for 2009.

McGraw-Hill Construction recently released its “2010 Construction Outlook” that forecasts growth in the institutional sector and all construction segments in the coming year. Cover image printed with permission from McGraw-Hill Construction.

“The U.S. construction market in 2010 will be helped by growth for several sectors, following three straight years of decline that brought total construction activity down 39% from its mid-decade peak,” says Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction.

Highlights of the “2010 Construction Outlook” include a stat specifically related to institutional construction, of which churches are a part. According to the report, institutional buildings will begin to stabilize after losing momentum in 2009. Square footage will retreat another 2% after sliding 23% this year. The dollar amount of construction for this sector is anticipated to edge up 1%.

The “2010 Construction Outlook” was presented at the McGraw-Hill Construction Outlook Executive Conference in Washington, DC, which brought together top management from all parts of the construction industry, including firms involved in building product manufacturing, architecture and design, contracting, engineering, industry associations and other industry professionals.

For more information on the “2010 Construction Outlook,” visit http://construction.com/AboutUs/2009/1016pr.asp.

Solomon Awards Winners Honored at WFX Charlotte

At Worship Facilities Conference & Expo (WFX) at Charlotte, N.C.’s Charlotte Convention Center at the end of October, church leadership congratulated the following winners of the annual WFX Solomon Awards. These church teams, individuals and vendor partners achieved excellence in the areas of facility design, management, marketing, usage and audio-visual production.

• Best Facilities Manager or Team - Dave Wagner, Grace Community Church, Noblesville, IN
• Best Tech Consultant and/or Contractor - Mankin Media Systems, Project: Southeast Christian Church, Louisville, KY
• Best Technical Director - Daryl Cripe, Grace Community Church, Noblesville, IN
• Best Technical Production Team - Grace Community Church, Noblesville, IN
• Best Overall Church Project - Mariners Church, Irvine, CA
• Best Overall Church Technology Project - Southeast Christian Church, Louisville, KY
• Best Building Contractor - Cogun, Inc., Project: Elevation Church, Charlotte, NC
• Best Church Architect - Visioneering Studios, Project: Elevation Church, Charlotte, NC
• Best Church Design: Expansion Project, 301-800 Seats - Visioneering Studios, Northside Christian Church, Walnut Creek, CA
• Best Church Design: Expansion Project, 801-2000 Seats - BLDD Architects, Second Presbyterian Church, Bloomington, IL
• Best Church Design: Expansion Project, 2001+ Seats - Merriman Holt Architects, Peachtree Presbyterian, Atlanta, GA
• Best Church Design: Renovation Project, 1-300 Seats - Southwest Community Church, Minooka, IL
• Best Church Design: Renovation Project, 801-2000 Seats - Visioneering Studios, Elevation Church, Charlotte, NC
• Best Church Design: Renovation Project, 2001+ Seats - Revival Productions, Inc., Faith Community Church, Santa Barbara, CA
• Best Church Design: New Project, 1-300 Seats - Soma Ministry, Tuscaloosa, AL
• Best Church Design: New Project, 301-800 Seats - YWS Architects, Congregation Ner Tamid, Henderson, NV
• Best Church Design: New Project, 801-2000 Seats - Meyer Sounds Labs, Grace Community Church, Noblesville, IN
• Best Church Design: New Project, 2001+ Seats - Visioneering Studios, Mariners Church, Irvine, CA
• Best Construction Management - Aspen Group, Rock Prairie Baptist Church, Frankfort, IL
• Best Design, Implementation and Operation of an Audio, Video & Lighting System - SECC - The Block, Southeast Christian Church, Louisville, KY
• Best Green Initiative - Service U, Vineyard Christian Fellowship, Anaheim, CA
• Best Special Project or Initiative - Pastor Chad Gilbert, Edgewater Baptist Church, New Orleans, LA
• Most Innovative Production - Westover Church, Greensboro, NC

For more information and to see the winners of the WFX New Products Awards, go to www.wfxweb.com.

Northland Chooses ZeeVee Technology to Broadcast Services on Campus

Northland, a Church Distributed, in Longwood, Fla., reports saving money by using new technology from Littleton, Mass.-based ZeeVee Inc. to broadcast services live across its multi-building campus.

Florida’s Northland, a Church Distributed, uses ZeeVee products to cost-effectively distribute VGA and component video source as an HD cable TV channel over existing coax wiring across its campus buildings. (Click image for larger version.) Image courtesy of ZeeVee Inc.

Rather than investing in expensive SDI displays, distribution gear and new cabling, the 12,000-member church sends signals over existing coaxial cable to existing off-the-shelf HDTVs. The system Northland uses is the ZvPro 250 HD encoder/RF modulator, which can distribute any VGA or component video source as an HD cable TV channel over standard existing coax wiring. The new channel can then be viewed using the digital cable tuner built into every HDTV.

“We can broadcast services immediately to campus buildings where we already have coax and an HDTV, and we can extend our coverage inexpensively,” says Bret Hoskins, the church’s senior technical engineer. “ZvPro costs a fraction of what the SDI-equipped gear costs, and we can use existing HDTVs or buy modestly priced new ones as needed. We think this is a great value for wiring our congregation.”

For more information on ZeeVee’s HD video distribution products, see www.ZeeVee.com.

Seattle First Presbyterian Secured with Award-Winning CyberLock Product

Videx Inc.’s CyberLock electronic locking cylinder is the choice of downtown Seattle’s Seattle First Presbyterian Church. Photo courtesy of Videx Inc.

Seattle First Presbyterian Church is a downtown church that makes security a priority. The church campus encompasses one city block with 17 doors serving as points of entry. According to Jace Allen, church elder, “Our perimeters had been breached many times and we experienced vandalism and thefts of our sound and audio equipment. We wanted our church to be a safe place for our people in an unsafe environment, so we were tasked with finding an access control solution.”

First Presbyterian chose CyberLock by Corvallis, Ore.-based Videx Inc. because their existing door locks could be easily retrofitted with CyberLock electronic cylinders. As Allen says, “CyberLock offered the quickest and least expensive action we could take.”

Videx’s XD Rechargeable CyberKey also won a WFX New Product Award for “Best Overall Building System/Material Product” at WFX Charlotte in Charlotte, N.C., this fall. For more information on the CyberLock and XD Rechargeable CyberKey products, see www.videx.com.

Financial Considerations for Third Places

By Scott Rolfs

Scott Rolfs, managing director of the church and school financing division, Ziegler Capital Markets, Chicago

Third Places have become an extremely important ministry tool for a number of churches in the past decade. Most lenders are generally very comfortable with providing financing for such places because they add to the overall effectiveness of the ministry. Small group socialization can be hard to come by these days given our increasingly impersonal society. The megachurch trend the past 20 years has somewhat contributed to this as larger groups of people congregate in bigger and bigger sanctuaries. Creation of a Third Place such as a coffeehouse, cafe, or bookstore within your church provides an ability for people to interact in an informal small group setting and create meaningful bonds that will last beyond the weekend service.

When contemplating creating a Third Place, there are a few financial considerations to keep in mind. First, do not plan on the venture being a money-maker or providing surplus cash flow to make debt service on a building loan. There are a number of Third Places that are profitable, but many are not. After you get done accounting for the operational costs, it can be a challenge to make a profit. While most Third Place planning sessions talk about the basic costs of goods and services (i.e., food, coffee, books, etc.) they do not take into account the administrative and regulatory costs of operating something like this on a large scale. Depending on the level of food service you provide, there will be certain state and local health regulations that will need to be followed. Storage and inventory costs will arise. The tracking of sales and inventory will also require greater accounting burdens on your office staff. In some cases, if the operation becomes too large (and successful), it may require you to pay unrelated business taxable income on any earnings.

Finally, there becomes a question of pricing of goods and services. While most congregants will understand the need for a Third Place to generate cash flow to pay for operations, there may be some resentment if the prices are the same as or higher than at similar for-profit stores. The goal is to create a space for ministry and personal interaction rather than to create a for-profit business.

Due to the potential complexity of the operations discussed above, it is impossible for a lender to make a reliable projection as to the cash flow that will be generated from a Third Place to debt service a loan. Therefore, churches should budget for any debt service related to the construction of a Third Place from tithe and offering revenues. If successfully implemented, a Third Place should help your church grow and reach new members which, in turn, will increase the giving base.

Despite the fact that lenders will many times not rely on Third Place income when qualifying for a loan, they do like to see such places incorporated into the design of new churches. Large narthex areas with gathering places, coffee shops, etc., will not only help your ministry thrive but also will enhance the marketability of your building if you ever choose to move. There are a number of church buildings on the market right now that do not have a large narthex nor the ability to establish or operate a Third Place. These buildings generally are the last to sell and will sell at a lower price when compared to a facility that has Third Places or the space to create one. Even if your church does not have plans for a Third Place as part of a new building project, we’d encourage that the design incorporate a large narthex area that will provide the flexibility to create one in the future if desired.

www.ziegler.com/investment_banking/church_and_schools