Study Team Report for Affordable Workforce Housing

Dear Church Family,

From the moment we began planning the God Dreams series in 2021, we had a shared sense that God was already working to call our church to make disciples in Denton in new and unexpected ways. As we listened to the prayerful dreams of the congregation, we all adopted an inspiring stance of intentional discernment, making space together in our hearts and minds to see what God-sized dreams were in store for our congregation and our city. Yet, over and over, we heard the God Dream to be a church that shines God’s love, cares for our neighbors, transforms our city, and secures a thriving future for our ministry together. 

Even as that prayerful vision came into focus, we had no idea how “God-sized” the dream would be.

This Sunday, we will gather together in the Sanctuary at 12:30pm for a called church conference to vote to accept our Workforce Housing Study Team’s recommendation to develop approximately 185 units of housing which would be affordable to working families earning at or below 60% of area median income, a project which holds the potential to change the trajectories of countless families across multiple generations and to ensure our church’s vitality and impact for the next 100 years.

The study team’s recommendation to pursue this project comes with the unanimous support of the Study Team, your Board of Trustees, Finance Committee, Administrative Council, and the clergy and staff of FUMC Denton. The full text of this recommendation and the report of the Study Team is included later in this email, and we encourage you to read it in advance of Sunday’s conference. If you would like to read on the web or download as a PDF, click this link. If you have any further questions as we approach March 5th, feel free to email the Study Team at workforcehousing@fumc-denton.com.

Our District Superintendent, Rev. Debra Hobbs-Mason, will preside over this historic church conference, in which all professing members of FUMC Denton are invited to join those mentioned above in affirming God’s call on our church to be the heart of our community for generations to come.

In God’s love,

Rev. Don Lee
Rev. Jonathan Perry

The Report of the FUMC Denton Workforce Housing Study Team 

Vision

Throughout its history, FUMC Denton has sought to be a transformative presence in the Denton community, answering God’s call to love our neighbor as ourselves by shining God’s love into every life. After a congregation-wide visioning and discernment process in the 1970s, FUMC Denton answered God’s call by affirming that its continued physical and ministry presence in Downtown Denton was essential to achieving a twofold goal of making disciples of Jesus Christ for the transformation of the world and ensuring that the urban core of Denton remained a vital and vibrant home where all of God’s children could find pathways to prosperity. As a direct result of that commitment, the church spurred public and private investment in Downtown Denton by securing and developing the entirety of its current two-city-block campus. 

The call to shine God’s love in the city of Denton continues in our time. Through a new season of visioning beginning in 2020, our congregation felt a renewed call to make a difference in the lives of our community and bring continued vitality to our church and community by caring for our neighbors. As we listened to the needs of our community through conversations with neighbors, the United Way, Denton ISD and the City of Denton, one of the greatest opportunities for transforming our community came to light: leveraging our God-given assets to lead our city in its response to develop housing affordable to working individuals and families. 

Matching Community Need with God’s Provision and Trusted Partners

Community Need

• The City of Denton identified Affordable Housing as a top strategic need for our community, estimating in 2019 that more than 4600 units of affordable housing would be needed in our community by 2024. The pandemic’s onset in 2020 worsened and accelerated this need.

• Approximately 40% of Denton residents are unable to afford to live and maintain basic expenses in our community. Ever-increasing housing costs which outpace wage growth, especially for rental homes and apartments, is a large factor in this affordability crisis.

God’s Provision

• Our church campus includes approximately two underdeveloped acres of land located in the heart of Downtown Denton. Through Federal programs, and our shared mission with partners like the City of Denton, Denton County, Matthews Southwest and Volunteers of America, we feel called to better deploy our property to address this consequential need in our community.  

• Through Federal Low Income Housing Tax Credit programs, organizations like ours can develop housing that is affordable to asset-limited, income-constrained families such as those identified in the City of Denton’s Affordable Housing Needs Assessment. Successful applicants to this program receive grants which can fund more than 40% of a project’s development cost.

Trusted Partners 

• Volunteers of America (VOA) is one of the largest nonprofits helping build and manage affordable housing across our nation and has experience helping churches and other nonprofits transform the future of their communities and their church. 

• Matthews Southwest is a nationally-recognized real-estate developer, headquartered in Denton County, whose portfolio of successful projects include the Omni Hotel in Dallas, the New Orleans Convention Center, and the Air Force Academy Hotel in Colorado Springs. Recently, they have begun giving back by co-developing high-quality affordable housing developments in partnership with VOA and other faith-based groups and municipalities. 

• Representatives from our Study Team and Trustees visited one-such affordable housing development, The Galbraith, built as a partnership with Volunteers of America, Matthews Southwest, and the City of Dallas. The team walked away impressed by the quality and caliber of construction and dignity of design. They also visited with the property’s management company and residents, all of whom spoke highly of the experience.

• In partnership with Matthews Southwest and VOA, the church engaged Hatch + Ulland Owen, an experienced and highly regarded architecture firm with a record of designing high-quality affordable housing. H+UO has completed many projects in collaboration with the Michael Dell Foundation’s “Foundation Communities” and is experienced in working with churches and other local nonprofits to achieve excellent, mission-focused, and community-appropriate architecture.

The Project and its Impact

The study team believes FUMC Denton and its partners can develop approximately 185 affordable housing units ranging from studio apartments to family-friendly three bedroom units to serve residents earning 60% of the area median income. This level of affordability would enable seniors, families, single-parent households, working in such jobs as local school teachers, registered nurses, first responders, and more, to afford to live in the heart of our city.

•  The financial benefit realized by families each year would be transformational, allowing a family to not only meet its basic needs, but to invest in education, savings, or a future down payment on a home in just a few years. This project will transform in a positive way a family’s story, the fabric of our city, and the future of our church for generations. 

• The project will include a parking garage to preserve all of our church’s current parking spaces and will provide adequate parking for apartment residents and their guests. 

• The project will include first-floor space for commercial tenants, nonprofit partners, and space for the church’s future ministry purposes. 

• The revenue from the property would also be transformational for our church, enabling, expanding, and making more sustainable the church’s ability to do ministry in the Downtown community, contributing an estimated $30 million to the ministry of the church over 40 years.

• The property would be managed and operated by an experienced management company with a proven track record in affordable housing, to be vetted and hired by the church and its partners through the nonprofit entity created for this project. Applications, qualification, and other rental services would be handled by the management company under the guidelines of the Federal Affordable Housing criteria, including income, credit, and rental history checks as well as background checks to ensure a safe and dignified community.

• The church would retain contractual control of the property and land while placing the project into a separate entity for liability and other legal purposes. After a 15-year compliance period, the church will have the option to return to sole ownership or continue in a partnership structure.

• The church and its partners will share any pre-development costs for services like geological survey, civil engineering, and architectural services. All costs will be refunded to the church upon the successful close of financing and beginning of construction.

• The Board of Trustees, serving as the church’s building committee, will represent the church’s interests in design, development, and construction, and work with partners to support the mission, values, finances, and facilities needs of the church. 

Affirming God’s Call

We believe that this project is the most significant way that our church can change the story of the future of Denton, the trajectory of thousands of lives, and ensure the sustainability and expansion of the future ministry of First United Methodist Church of Denton. 

The project has been endorsed unanimously by the Study Team, as well as by the Board of Trustees, the Finance Committee, and the Administrative Board of the First United Methodist Church of Denton, Texas.

In 1970, the congregation did not know what the land it was acquiring would be used for, but they knew it would be important for God’s vision for the future ministry of our church as we seek to shine God’s love into the lives of Denton. This project is the next step in answering the call that our church had 50 years ago in a way that only God could dream. And it is a pathway to living into God’s dreams of a future with hope for our church and community for the next 50 years and beyond. May God be with us in this work.

The Study Team

Courtney Banatoski
Nancy Chadwick
Steve Cobb
Ross Garrison
Tom Grems
Dalton Gregory
Chuck Rives
Jeff Springer
Kathryn Stream

Proposal for Church Conference:

Therefore:  

In light of God’s calling on us as a faith community, the ever-growing need for affordable housing in our community, and FUMC Denton’s ability to leverage its God-given assets to develop such housing, the FUMC Workforce Housing Study Team, authorized by the Board of Trustees, recommends that the Church Conference of First United Methodist Church, Denton, held on March 5, 2023, accepts the recommendation to authorize the church’s lay leadership and clergy to undertake all steps necessary to develop approximately 185 units of affordable workforce housing in partnership with Matthews Southwest (MSW) and Volunteers of America (VOA), including those described herein. 

Designate:

• The FUMC Denton Board of Trustees to serve as the body responsible for making all decisions on behalf of First United Methodist Church of Denton to achieve the above Workforce Housing objectives, to serve as the Building Committee and assign others to a subcommittee as necessary.

Authorize:

• The FUMC Denton Board of Trustees to enter into a memorandum of understanding and binding agreement with Matthews Southwest and Volunteers of America, in which MSW/VOA and FUMCD share equally in the pre-development costs of a workforce housing development, and allow the church to contribute from cash on hand up to $850,000 in pre-development phases over time, with all costs to be paid back to the church immediately upon the successful close of financing for the development.

• The FUMC Denton Board of Trustees to execute any necessary subdivision and/or transfer of church-owned real property to a third party for purposes of retaining exemption from property taxes and gaining other economic incentives provided the transfer is to an entity controlled by FUMC Denton and that FUMC Denton retains the contractual ability to acquire the property from the entity at a future date for a nominal cost.

• The FUMC Denton Board of Trustees to negotiate terms and enter into formal development agreements with third parties for the purposes of developing affordable workforce housing, including but not limited to Matthews Southwest and Volunteers of America.

• The FUMC Denton Board of Trustees and/or Finance Committee to secure long-term project financing through the newly formed development entity.

• The FUMC Denton Board of Trustees and/or Finance Committee to secure any bridge/gap financing necessary for the project, with the assurance that debt service be paid with proceeds generated from the workforce housing project.

This proposal received the unanimous endorsement of the Board of Trustees, Finance Committee, and Administrative Board