December 15, 2006
Like many churches, the buildings of Emerson Unitarian Universalist Church in Houston were sorely underutilized during the week. So when the church built a new, 23,000 sq. ft. educational building in 2004, to accommodate its own growth, it aggressively marketed rental availability to both charitable and for-profit organizations. The efforts yielded a lot of activity but only modest revenue from a small non-profit pre-school and occasional community groups.
In early 2006, the church went back to the drawing board. The building use committee, under Laura Emerson and Jerry Wendelin, decided that instead of marketing broadly, it would identify and target ideal tenant candidates.
The criteria were:
The committee decided that an adult education program would be ideal and contacted Leisure Learning Unlimited (LLU), a well known and regarded, for-profit company that offers non-credit courses to adults in Houston. Timing was serendipitous, since LLU wanted to wrap up its current lease. On the other hand, this tenant appeared to be one of those "be careful what you wish for" lessons: it would require far more rooms, hours, and people (12 rooms for 100 people on Monday-Thursday nights from 5-10 p.m., with fewer rooms on Friday night and Saturday day) than the church had originally contemplated, but would also generate greater revenue, exposure, and name recognition than previously conceived. In other words, this tenant appeared to fit all nine of the church's criteria.
The complex set of negotiations (both within the church and with the tenant) over four months resulted in a $100,000+/year rental for a two-year term, with renewal options, unanimously supported by the congregation and staff. Overall, the process was a smooth one, which we regard to be the result of several judicious steps.
Emerson Church knows that a tenant of this size will change the feel of our campus from a very quiet place on weekdays to something more analogous to a bustling community center. We are even negotiating with caterers to offer cold meals in the evenings.
Note: Laura Emerson says the agreement won't affect the church's non-profit status since it is not sharing in a tenant's profits and because the contract is a license agreement rather than a lease. Congregations considering agreements with for-profit firms should always check first with a real estate lawyer, she notes.
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Last updated on Wednesday, September 14, 2011.
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