Proposed Congregational Vote:
Northwood proposes and intends to re-plat and sell approximately 11 acres of its land to a local developer, which will allow Northwood to repay its existing mortgage and begin final plans for building its permanent home on 105th Ave N in Maple Grove, MN. This vote will likely take place on May 21.
Why are we proposing this sale of land?
Northwood currently owns approximately 21 acres of land on 105th Ave N in Maple Grove, originally purchased in 2009. We currently owe approximately $708,000 on this land. Northwood desires to build on this land, and prefers to have city sewer & water, utilities available to it. The city of Maple Grove needs a “revenue source” in the area, to speed up the process of bringing city utilities to the property. By selling a portion of our land to a developer, this brings a “revenue source” to the city and brings utilities to our property. Selling a portion of our land creates proceeds that Northwood can use to repay all of its existing mortgage, and puts additional funds in the bank, allowing us to move forward with specific building plans and putting us in a position to obtain construction financing and a final loan from a lender.
When are we planning on building?
Plans have to be drawn, costs must be estimated, city utilities must be coordinated, construction financing must be obtained, and we must raise funds. As those plans fall into place this year, we would expect to break ground in the spring of 2018 and look to be able to worship in our new permanent home by Christmas 2018.
Original cost to purchase vs. sales proceeds:
Original cost of land = $1.8 million ($85,700 per acre) for 21 acres, purchased in 2009
Sale price of 11 acres = $1,155,000 ($105,000 per acre); expect to retain 10 acres.
Use of proceeds:
Estimated sales proceeds = $1,155,000 less sales commission, closing costs = $1,100,000
Remaining amount of mortgage as of October 1, 2017 = $681,000 (currently $708,000 at April 1)
Remaining cash in the bank after sale proceeds = $1,100,000 – $681,000 = $419,000 (estimated)
What will a new building cost?
We won’t know the final answer for several months, but we currently believe the cost to be in the $200-$220 per sq ft range. Many factors affect the cost, and the range has consistently increased over the past 7 years. So, a 12,000 sq ft building could be in the $2.4 – $2.6 million range, and a 16,000 sq ft building could be in the $3.2 – $3.5 million range.
Can Northwood afford to build a new building?
Yes, we can, but we need everyone’s help to do so! Depending on the size of the building, we may need to borrow up to $3 million. The new building will create additional operating costs, and our growth will require additional staff to support our various ministries. We will plan on creating a three-year funding campaign, beginning this fall, to help us raise the necessary funds to build our permanent home.
All Northwood Fellowship and Church members are eligible to vote on this proposal. Absentee ballots must be secured from the church office by May 19 and will be accepted by Church Chairman Rik Wenell prior to the May 21 meeting.
Who can answer my question(s)?
Scott Fjellman, email@example.com
Rik Wenell, firstname.lastname@example.org