“The wealth of knowledge and expertise that the CRE Consulting Corps team provided is viewed as a wonderful blessing for St. Michael’s. We are confident the CRE team’s guidance will help us move into a positive future”
Rev. Jeunée Godsey, St. Michael’s Episcopal Church
St. Michael’s Episcopal Church property, located in historic Bon Air, Virginia―a suburban community in northern Chesterfield County, just south of Richmond―encompasses several parcels totaling approximately 12 acres. The church and school buildings, built from the late 1950s through 2001, are aging and display some obsolescence. The property is owned by the Episcopal Diocese of Southern Virginia with the Church as Steward. In the summer of 2018, the on-site Lower School will relocate to a new campus about three miles away where the Upper School moved in 2008. The loss of income from the School for operating expenses and shared use space will have significant financial impact on the Church. Both the Church and the School have appointed Transition Work Groups that have been meeting separately and jointly to develop a Transition Agreement governing the orderly exit of the School from the facilities.
The immediate short-term need was for a workable exit strategy (Transition Agreement) for the School that would alleviate the immediate financial burden on the Church while the property is repositioned. The Church leadership recognized the timing was right for development of a viable strategic plan for the current and future use of all the facilities on the Church campus that would: maintain the presence and relevance of the Church within the community; maximize potential land use for the needs of new users; and, create synergies and/or catalysts for additional community and economic development to create a viable revenue stream. In addition to taking into account the objectives and interests of the Church, the plan needed to incorporate the economic and social development efforts of Chesterfield County and the City of Bon Air as set forth in the recently adopted Bon Air Special Area Plan.
Prior to the site visit the team reviewed briefing materials, including such items as the Chesterfield County Bon Air Special Area Plan; maps, photos and dimensions of the facilities; proposed transition documents exchanged between the Church and School; and budgets and operating statements. The five-day site visit included tours of the facilities, the environs, and the new school campus, as well as interviews by the Consulting Corps Team with key stakeholders. The team also consulted with local CRE members and area professionals to obtain further perspectives on the market area.
After focused deliberations, the team drafted a Proposed Transition and Mutual Rights Agreement and presented their recommendations. They prepared a private briefing for client representatives and a public briefing that included press coverage. In addition to the agreement, the team recommended that St. Michael’s Vestry establish a strategic plan for the property for discussion with and approval by the Diocese of Southern Virginia that: (1) defines the future use of the property in mission-based terms; (2) addresses transaction management for the portions of the property to be monetized and asset management for the portions of the property to be retained; (3) considers how cash flow from the property will be applied; and (4) identifies plans for staff and volunteer development in order to manage the change and growth implied in the re-use of the property.
“The mutual respect that permeated our internal deliberations, the courtesy shown to the interviewees, and above all the professionalism shown to our client in both our final meeting and the public presentation, provided a strong example of the Counselors’ ability to not only present insightful recommendations for real estate-based alternative strategies but also, as an individual of our client’s vestry stated, a “Solomon-esque” solution to their current real estate hurdles.”
William R. Quinlivan, CRE, Colliers International, Consulting Corps team member