Houston’s City Council voted 13-2 yesterday to sell the former Compaq Center to the nation’s largest megachurch for a grand total of $7.5 million dollars. Sure, that’s considerably less than the $22.6 million the city would have received for a 30-year extension of Lakewood Church’s current lease on what used to be homecourt of the Houston Rockets. But the city wouldn’t see the beginning of that income stream for 24 years, and it might be a full 54 years before the city could get the building and those 7 acres of Greenway Plaza land back — presuming either is worth anything at all by then. And really, who’s even going to want to be around this city in 2064?
That $7.5 million isn’t exactly chump change, either. If each of the church’s approximately 43,500 weekly visitors throws a dollar into one of those collection buckets, it’ll take them all of 3 and a half years just to pay the darn thing off!
But did the city even have a choice in the matter?
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Where else to look for an answer that question, but from the man who has now clearly earned his rightful place in the pantheon of Houston property leasing, sales, and acquisition mavens, Lakewood Church pastor Joel Osteen? In his latest book of real estate and related advice, It’s Your Time: Activate Your Faith, Achieve Your Dreams, and Increase in God’s Favor, Osteen explains:
. . . this one blessed opportunity — acquiring the Compaq Center — thrust our ministry probably fifty years further down the road. As far as reaching people, as far as credibility, that one event did more than I could do in my whole lifetime in my own effort.
This was planned before the foundation of time. I met a man who helped design the Compaq Center; he was one of the original engineers. He explained that way back in the sixties, he laid out the entry and exit ramps of the freeway to flow perfectly into this building. He worked with the city to time all the traffic lights so people could get in and out of the center quickly.
As he spoke, I thought about how good God is: Forty years ago he had people working on our behalf!
My friend, God has it all planned out.
- City Council OKs sale of ex-Compaq to Lakewood [Houston Chronicle]
- It’s Your Time: Activate Your Faith, Achieve Your Dreams, and Increase in God’s Favor [Amazon.com]
- Previously on Swamplot: More Real Estate Wisdom from Joel Osteen: Let Them Get Comfortable with the Transaction, and Show Them My Smiling Face, 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 coverage [Swamplot]
Photos: Flickr user mlsnp (top); Paul Duron (bottom)
Lakewood’s revenue stream should not be evaluated in terms of Sunday offerings. Rather, book deals, television contracts and membership fees of the feckless masses who frequent Mr. Osteen’s weekly motivational seminars will, very quickly, raise the needed capital.
@Landed Gent: Amen, dude.
Please make it stop. The least we could do was make them pay property taxes on the place.
Makes you wonder what our mayor will “fire-sale” to cover up the deficits she helped create while controller. Any way you twist or turn it, she sold a property worth $35 million according to HCAD for $7.5 million. You gotta love these fiscal conservatives.
I guess we should be grateful the city doesn’t own the sports stadiums.
she sold a property worth $35 million according to HCAD for $7.5 million. You gotta love these fiscal conservatives.
I doubt the HCAD value takes the pre-paid 30 year lease into account though.
Here’s a quote from Dawn Ullrich in an article that was in the NY Times in 2004 stating why the arena was leased to Lakewood in the first place.
because the church was willing to pay rent that equaled the appraised value of the arena.
It sounds like the city basically sold them the arena twice. Lakewood has also spent 10s of millions renovating the building. That probably made the appraisal go up a bit.
Maybe not a bad deal, assuming that Lakewood Church will really continue to inhabit the building for another 54 years. And if there’s one thing we all know, it’s that mega-churches and their pastors have a spotless record for lasting decade after decade.
But did the city take into account the (incredibly remote) possiblity that Joel, et al, might have some reason to default in the next 54 years, returning the property to the city? I wonder if I can get odds on Lakewood being sold in the next 54 years to provide proceeds for a legal defense fund.
I fail to see how this is a bad deal for the city. Lakewood “prepaid” $12 million in 2002 to cover first 30 years of the lease term and their lease runs thru 2034, so Lakewood effectively controls the property thru 2034 and after that they have a 30-year extension effectively controlling the property for another 30 years. Am I missing something? Who else would buy this property???
I still call it “the Summit.” So there.
———Who else would buy this property???———–
The City could have sold it in a heartbeat to an office building developer for an up front cash payment that may have been close to all the rent Lakewood paid in their first 30 years.
After redevelopment, we’d have a nice building worth $100 million or so generating millions of property tax dollars EACH AND EVER YEAR for the next 100 or so years. On top of that, the new building would be a ad value by creating space to accommodate thousands of workers, many of whom would have lived inside the City limits creating an enormous amount of commercial and social activity in the core of our great city.
I guess one could argue that there are other office development sites around town, but still… This whole deal with Lakewood is a squandering of precious assets on an epic scale. The incompetence of our elected local leaders is nothing short of staggering.
That’s less than the asking price of a lot of private homes in this town–even in this market!
This stank to began with. Stinks even more at this point. The reality is it is property that belongs to the taxpayers. Not City Hall.
The city definitely shouldn’t be in the business of subsidizing religion. But apparently it is.
Of course all those holy rollers vote….
Bernard — what are you talking about? What developer would pay more than $7.5mm for a property that pays $0 for the next 21 years while the developer has to pay taxes on it? And then in 21 years the developer probably starts to receive just $700k/year for the next 30 years. When exactly is this “after redevelopment” going to occur?
By the way, developers have known the City might sell for over 4 months.
Time for a pop quiz: no one has shown up and offered to pay more because ______ (fill in the blank).
That’s one stadium down. And at least it’s being put to use. Now they just need to find a similar deal for the Astrodome. Maybe 2nd Baptist needs a new home?
If the city had told Les Alexander to go build his own stadium, he probably wouldn’t have. Isn’t anyone fed up with the city allowing developers, and now a church, to enrich themselves off the taxpayers?
The point is, which no one understands, is that after the lease term expires, the city no longer owns what will be a very valuable piece of property. That once belonged to the taxpayers.
PT Barnum must be the patron saint of Houston. There appear to be two suckers born every minute here. And another who relocated.
Praise the baby Jeebus!
Now, can we tax the f@ckers?
–“This was planned before the foundation of time. [The man who designed the building] worked with the city to time all the traffic lights so people could get in and out of the center quickly. As he spoke, I thought about how good God is: Forty years ago he had people working on our behalf!”–
WTF? It’s called forward-thinking traffic design, Joel, which is necessary for a large capacity building, whatever its use may be. That’s like saying God allowed penicillin to be invented so I would survive a bad illness in my youth.
Why would God go through all the extra work? Seems like an awfully inefficient use of time and effort. Why wouldn’t God just build the building himself, or not allow me to have become ill at a young age?
Gotta love those mental gymnasts!
Count me among those who don’t believe God was working on Osteen’s behalf forty years ago when the Summit was constructed with e-z flow in-and-out traffic. If anything, he was looking out for the stoners who drove out from the hundreds of heavy metal concerts there over the years. ;)
Matt Mys — What about the dead restrictions on the site? It can’t be anything that competes with the rest of Greenway Plaza (remember, the developers gave it to the City for free — for an arena — and so they restricted the use). This is NOT a valuable property. No one else wants it. No one else can use it.
It can’t be anything that competes with the rest of Greenway Plaza (remember, the developers gave it to the City for free — for an arena — and so they restricted the use). This is NOT a valuable property. No one else wants it. No one else can use it.
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What one gives, one can take back. Including restrictions. At some point, that restriction might have been lifted and the value of the land for commercial development would obviously been worth far more than even the $35 million appraised the property for.
Did the city consider the long-range implications of this deal? Of course not.
As for city council approving this on the basis that the $7.5 million would help cover a $12 million deficit, how are they going to cover the looming $135 million deficit?
The city, again, should not be subsidizing religion. And that is what it has done. And hopefully the voters will get angry finally and start “retiring” everyone at City Hall. Including the mayor.
And it imight be pointed out the Kenneth Schnitzer donated the land for use to benefit the tax base of the city – I doubt he would have donated the land if he had known the city would eventually lease and then sell the land, never mind the structure, to a church which would no longer support the tax base.
Crescent should have nipped this in the bud prior to the city leasing it. And definitely should have protested the sale.
No doubt the mayor will probably propose selling Memorial Park or perhaps selling oil leases to cover the huge deficit which we are facing which she helped create by sitting by and rubber-stamping whatever Bill White wanted rubber-stamped -hopefully if she does the Hogg Trust will take it back. And put an end to City Hall giving away what doesn’t belong to them.
“Don’t blame me I didn’t vote for her.”
A lot of us didn’t vote for Bill White either.