Building Update

1. What is the current estimate of our building project?

Answer: 3.74 million

2. What areas have yet to have a firm bid?

Answer: We do not have a firm bid on the costs for a right turn lane into our new driveway. We estimated at 100k.

3. What did we accomplish in 2023?

Answer: We received our first bids on the project in late March at 3.64 million. We secured additional bids from local contractors. We found some savings in re-bidding from local contractors. Our property was clear of any wetland restrictions. Engineering was completed on the driveway and turn lane. We received preliminary loan approval at three bank institutions and also at Orchard Alliance.

4. What things did we not accomplish in 2023?

Answer: We had a goal to break ground in 2023, but the project began to bog down in the Spring/Summer of 2023.

5. What is left to do in 2023?

Answer: We are pursuing clarity from Carver County on the right-turn lane. We need to apply for the building permit this winter (good for one year). Our builder suggests we re-bid the whole project this winter.

6. What issues did we run into with our builder?

Answer: Initially we were very pleased with the bid in March, but discovered that local contractors were not involved. Our insistence on using local contractors resulted in several months of delay due to the backlog in construction schedules.

7. What conditions will help us to continue to move forward?

Answer: We are all disappointed to be so close to building in this time of record inflation, rate increases and construction delays. Our building team and builder are committed to being patient while continuing the building process. We pray that LRC body will remain patient and joyful through the economic trial we are all facing. We pray for steadfastness to continue to pray and believe and give towards the vision of building a home for LRC. We also pray for lower inflation and interest rates and more favorable economic conditions overall to help the home and the church prosper.    

8. What are the banks telling us about interest rates?

Answer: During the past 18 months we have seen interest rates climb from 4% to 8% with more increases likely to come. This translates to a monthly payment on a 2 million loan from $10,500/month to $15,500/month for a typical 25-year commercial loan (with 5-year balloon). Since we lock in our interest rate at the close of construction, it is important we trigger our project after we see interest rates declining.

9. Are we investing our building funds?

ANSWER: We have nearly 1.4 million invested with Merrill Lynch, Orchard Alliance, and a 7-month CD at Citizens Bank.  The current interest rates on our savings are just under and above 5%. 

10. What are some reasons for us to be thankful in these circumstances?

ANSWER:  We can be thankful that the Lord may have protected us earlier this year in deciding to not take the first bid from the builder. If we had gone ahead, we would be locking in our building loan at a very high interest rate today.

We can be thankful for the many surprise gifts that have come in this year for our building project. These invested funds are working for us now and gaining interest. We are also thankful for regular giving though the General Fund (which includes $144,000 towards the building). Lord-willing, our building funds should continue to grow to 1.6 -1.7 million by the close of 2024.

We can be thankful that we have clarity on our project and much of the planning is behind us. The Lord has helped us thus far, and we are prepared to go when it is time to go. Our builder continues to be engaged with us during this design process at no cost.

The LRC elders and building committee
August 20, 2023