Update--Sun, April 11th, 2010

We were able to extend the due diligence window by one week, which gave us time to further explore issues surrounding water. Basically, there are forms to fill out with the state that will change our use from 'domestic' to 'commercial', and will also allow us to drill a new well onsite. We are currently working with the property owners to complete paperwork (should be completed Monday), at which point we will take downtown to Denver to file with the appropriate state agency. All in all, we are confident that we will be able to have a functional water and sewer system upon occupancy of the property (estimated to be Summer 2010).

All the inspection reports we have ordered are completed and have come back favorable. There is going to be plenty of work to do, but structurally the buildings and land look very sound.

This coming week, we will turn our attention to the Development Agreement amendment process. This is the document that will stipulate, in a legally binding format, how and when the property will be 'redeveloped.' We will be working with an agency of the Town, the Development Planning Committee, who makes recommendations to the Town Council regarding development, building code, etc...The Planning Committee has agreed to amend the existing Agreement so that we will not have to connect to Town water/sewer services until we build new buildings on site. This process will likely take around 6 weeks, and Cornerstone will have legal representation to help us in this process with the Town. After that, the Town Council has to approve, and a likely scenario at this point is that we could be on the agenda for the June 1st meeting (the Council only meets every few weeks). However, things could go more quickly or also take longer depending on other variables.

There is a chance that the Town could allow us to build a relatively small structure (for example a 2,000 sf worship hall) without triggering the redevelopment costs. This is a major item for prayer. Just as Nehemiah approached the King and received everything he asked for (Nehemiah 2: 1-9), we will be approaching the Town with specific requests. May God grant us these requests, and even more...according to His will and good purposes for us. Not to us, but to Him be the glory!! (Psalm 115:1)

Land in Castle Rock

As we move forward with purchase of this property, it is interesting to consider the costs of land in Castle Rock. In general, even in the midst of a down economy, raw land is running from $6 to $18 per square foot. An acre of land is 43,500 square feet. So one acre will cost anywhere from $261,000 to $783,000. The price ($270,000) we negotiated with the sellers of 2607 5th St. comes out to be $2.94 per square foot, and that is just for the land. There is also 4,500 square feet of building space on site.

Another important financial consideration is that this property is already zoned for church use. In Castle Rock, changing the zoning of a property can cost tens of thousands of dollars and a lot of administrative work. So being already zoned for church use is a big advantage.

Update--Sat, April 3rd, 2010

Here is an overview of some of the findings from the due diligence investigations this week:

1. The General Inspection was completed on Thursday. In general, everything looked as good as could be expected. There were some minor issues with plumbing and electrical, but can likely be fixed at minimal cost. The roof on the main building is fairly new and in great shape. Obviously there is a lot of cosmetic work to be done, but there does not seem to be anything major in terms of repairs or improvements that will be needed.

2. The Septic system was also inspected on Thursday. It is a 2,500 gallon tank, and everything looks to be operational with this unit.

3. On Friday, Kumar and Associates in Denver conducted a soil sample test. 4 holes were bored at various points on the property to determine how fit the land is to build and expand. We should have preliminary results on Monday. The key question we need answered is can we build other buildings (especially a sanctuary) on the land?

4. The church received some excellent, in depth legal counsel this week concerning the purchase agreement, title work and other issues.

5. Much investigation was conducted regarding water. Currently the property has a well and septic system instead of city water and sewer services. Our purchase agreement (contract) includes the existing well permit. However, the well has not been producing potable water and city will not allow occupancy without it. So we either have to fix the existing well, or drill a new one. We may be able to fix the existing well by replacing the pump (which is substantially cheaper than drilling a new well). If we have to drill a new well, we will need to secure an expansion permit. It looks as though this will be straightforward in terms of getting the paperwork and approvals from the state agency. Early next week we will be working with the state, a well drilling company, and a pump installation company to determine what else we need to do to make sure we have potable well water upon occupancy.

6. We received a statement from the town's Development Planning Committee outlining the proposed changes to the current Development Agreement. These changes include not having new owners tap into city water and sewer lines until 'redevelopment' occurs. We are going to lobby the Town to define 'redevelopment' as anything over a 2,000 square foot structure. This is the existing language of the Development Agreement that was approved in 1990. However, that agreement also stated that the current ownership group (which bought the property in 1986) had to connect to city water/sewer by 2005. The Town has agreed to lift the date restrictions and allow occupancy of the existing buildings which are serviced by septic and well; however we are not yet clear as to whether or not we will be able to get the Town Council to allow us to make small expansions without connecting to Town water/sewer. But we have a high degree of confidence that at minimum we will be able to occupy and use the existing 4,500 square feet of building space.

7. On Friday, we requested an extension of the due diligence window. Currently we have until Tuesday to get all the information we need. However, we still have some outstanding items that we want to pursue further. We anticipate that the purchase agreement will be amended to extend the diligence window for at least one week.

Please continue to pray for this process. Above all, pray that any buildings and land our church might be able to purchase would further the establishing of God's kingdom in Castle Rock. We don't want to have property for the sake of having property; rather, we want to pursue property as a means to and end--the end meaning God's glory (1 Cor 10:31). May God use us to boldly proclaim the Gospel and make mature disciples of Christ in our community and to the ends of the earth.