From the Twitter feed of KHOU reporter Alex Sanz, Swamplot hears news that Houston’s city council has postponed a vote on a proposal to sell the former Compaq Center at 3700 Southwest Fwy. in Greenway Plaza to Lakewood Church, for an-appraised-but way-below-assessed-value price of $7.5 million. As Swamplot explained yesterday, the church has more than 20 years left on a prepaid lease for the property and an option to extend the lease for an additional 30 years after that for a little more than $22 million — both of which significantly affect the present value of the property to the city.
Is the postponement of the sale a setback for Lakewood? Why should it be!? Followers of church pastor Joel Osteen, who’s now written 3 books filled with real-estate investment advice, know that he advocates patience — especially in complicated sale or purchase situations. Why wouldn’t he want councilmembers to feel entirely comfortable with the decision they come to?
Here’s how Osteen explains it in a relevant passage from his latest book, It’s Your Time:
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A young couple from our church told me about the challenges they had while trying to sell their house. They had only a few prospects in the first few weeks. They weren’t having much luck.
The market was tough. Realtors told them it may take six months, a year, maybe even two years to sell. But this couple had an attitude of faith. They were prisoners of hope. And even though it didn’t look good, they kept reminding themselves, “We are closer than we think. It could happen any day.”
This one couple came back to look at the house a second time. They wanted to spend a couple of hours really studying it to see if it was right for their family. The owners were okay with that. But they debated whether they should take down their personal pictures of themselves and their children, just so they could remain more private. After they thought about it, they felt good about leaving those pictures where they were.
The potential buyers came to look at the house, and the owners left so they could take their time. A few hours later, they received a call from the real estate agent saying the couple definitely wanted to purchase the house. The buyers told my friends that they’d been torn between their house and another one. But during that last visit, they’d seen something that convinced them to buy my friends’ house.
“We saw a picture of you and your pastor, and we thought: ‘These people love God. They go to Lakewood. This must be the house for us!”
My friend told me: “Joel, you helped me sell my house.”
I told him that was great: “Now let’s talk about my commission.”
- The Houston City Council has postponed the sale of seven acres of city-owned land to Lakewood Church. [Twitter]
- Previously on Swamplot: Real Estate Lessons from Joel Osteen and Lakewood Church: It Is Better To Lease, Then To Buy, Your Best Deal Now: Will Lakewood Buy Its Own Church?, Joel Osteen on Real Estate: Enlarge Your House by Enlarging Your Vision, Joel Osteen Townhome Sales Technique: Give and Ye Shall Receive Full Asking Price, Joel Osteen, Deed Restrictions, and the House Flip from Heaven
Photo of Lakewood Church: Flickr user viajero28
This guy makes my stomach upset. That is no church. It’s a self-help book business with a religion wrapper for tax purposes.
Yep, that’s why Jesus shed his blood on the cross, just so some nincompoops can sell their house in a down market.
I suspect some of the councilmembers realize that not everyone who votes is a member of Lakewood. Or were reminded that not everyone who votes is a member of Lakewood. When their phones started ringing off the wall.
This deal stank to begin with. And stinks even more now. It’s our land. Not theirs. Mayor White gave away a parcel of land for what is nothing more than a private park \worth $45 million. That should have been the last time a mayor gave away anything. It is ludicrous to believe this land is only worth $7 million. And that is what the city is attempting to sell it for. The lease was not a lease/purchase with 100% of the rent applied towards the purchase price.
If the city sells it, hopefully someone will sue the city for defrauding the taxpayers.
Is there a line of Joel Osteen miniatures available at the Lakewood gift shop? I want to bury one in my yard next time we sell our house. That St. Joseph guy has a real sketchy record.
Brad I agree, but I’m beyond stomach upset. He makes me want to hurl.
It is ludicrous to believe this land is only worth $7 million
No one is saying that. If the city gets $7.5 mil from the Church they still get to keep the money that they got from them for the next 20 years of the lease. Lakewood is not getting this land for a simple $7.5 mil.
What a creepy vile evil huckster this snake oil salesman is. Make him pay taxes.
jgriff, wrong, once they buy the property they no longer make lease payments.
jgriff, wrong, once they buy the property they no longer make lease payments.
How can you stop paying pre-paid payments? They already paid them.
I’m not sure which thing he makes me want to do more:
1) create my own “church” and make disgusting amounts of money from selling books full of feel-good anecdotal bullshit to money-hemorrhaging suckers
-or-
2) vomit.
Now we know what to do with the astrodome!
ha, ha, ha…another happy ending, in direct opposition to the real-world situation, for a lakewood follower. how unique!
No one is saying that. If the city gets $7.5 mil from the Church they still get to keep the money that they got from them for the next 20 years of the lease. Lakewood is not getting this land for a simple $7.5 mil.
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A contract is a contract is a contract. Lakewood has a lease contract with the city. Not a sales contract. The $22 million is the amount of rent. It is not applied to a sales price. Nor is the amount Lakewood spent on improvement. Improvements belong to the landlord. Just ask Weingarten!
If HCAD says the property is worth $35 million, that is pretty much where the sales price should be. So the sales price is a little off. Which several city councilmembers realize. Nice to know something finally woke them up.
For a mayor who protrayed herself as a fiscal conservative, Annise Parker is not being very fiscally conservative by selling a property worth $35 million for $7.5 million just to make up a deficit. The city will see no further return on that $7.5 million. And eat the loss.
Just another sweetheart deal by a mayor. With an odd sweetheart if you ask me.
If HCAD says the property is worth $35 million, that is pretty much where the sales price should be.
Wrong.
Lakewood has a 20 year lease on the property that is already paid for. Why would someone pay $35mil for a property that will create no income for another 20 years? When the city leased the property to Lakewood the value to a potential buyer dropped enormously.
jgriff, I thought you were talking about the lease payments for exercising the extension, but given they are 20 years out, the NPV of those payments can’t be worth much. The trust is the orignal deal killed the value for our life time.
I am not familiar with commercial real estate transactions and after reading the posts I am somewhat confused. If the church prepaid rent of 22 million for 20 years and then bought the property the city keeps the outstanding balance?
I am not familiar with commercial real estate transactions and after reading the posts I am somewhat confused. If the church prepaid rent of 22 million for 20 years and then bought the property the city keeps the outstanding balance?
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The city keeps the $22 million either way. They leased it to Lakewood. They didn’t sell it or agree to sell it. They leased it.
Of course at the end of the lease, the city still owns the property. Which would be worth far more than $7.5 million. And probably far more than $35 million.
If the city sells it, they will have only received $7.5 million. The mayor can twist and turn that any way she wants. The bottom line is the bottom line. She will have sold a property worth $35 million based on the HCAD appraisal for $7.5 million. Not very fiscally conservative or even fiscally smart.
Why would someone pay $35mil for a property that will create no income for another 20 years?
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I would suspect in reality Lakewood is enjoying a very nice income as it is and have probably recouped the $22 million they paid on the lease. They will enjoy an even nicer income if they own the property outright.
Maybe they should ask for incorporation as well and just get their own zip code and call it Osteen City. As it stands they probably rival Vatican City in terms of the loot hidden away.
A little correction. Lakewood only paid $11.8 million on the current lease. If it extended it, it would have paid $22 million.
So, let’s see. $11.8 million plus $7.5 million is $19.3 million. The city has already spent the $11.8 million. And will spend the $7.5 million. And Lakewood will have a property it won’t pay taxes on worth $35 million according to HCAD and the city will have absolutely NOTHING.
“Don’t blame me. I didn’t vote for her.”
NPV. look it up. The second lease is at the Church’s option so potentially the city is locked in for a stream of payments for another 40 some odd years. Wait for the money or take the NPV now? Of at the end of the payments, the city would still own the property so that should be factored in also but anyone care to guess at the value of the land 40 years out (building assumed to be zero).
Of at the end of the payments, the city would still own the property so that should be factored in also but anyone care to guess at the value of the land 40 years out…
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Let’s see. The building aside, you have seven acres in an established and viable business district with freeway and underground parking access linking it with the rest of the business district.
Right now that is probably worth a lot more than $7.5 million. And probably worth a lot more than $7.5 million adjusted for inflation 50 years from now.
Anyway you look at it, Lakewood has a sweetheart of a deal. And the city ends up with nothing. Which means the taxpayers end up with nothing. But of course the taxpayers don’t matter to politicians trying to buy votes by giving land away. Even if the taxpayers own the property. Which the taxpayers do. It’s our property. Not City Hall’s.