$8,000,000 Loan Helps Oak Grove UMC Expand Its Ministries

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Founded in 1836, Oak Grove UMC is a historic landmark located in Decatur, Ga. For eight years, Rev. Dr. Glenn Ethridge, senior pastor, has led this vibrant congregation of 3,000 members in fulfilling its mission of creating life-changing communities through Jesus Christ.

“We emphasize the plurality of communities because it is a large church. Therefore you have multiple communities: youth, children, music, covenant groups, small group discipleship, and mission opportunities,” Ethridge said. “Then we look at creating long-term community relationships through our overseas mission work with receiving agencies located in countries such as Liberia, Costa Rica and Honduras.”

Oak Grove UMC is once again in the midst of a renaissance. Should voters choose to unify the Lakeside and Briarcliff communities during a November referendum, the Church will find itself located in the heart of the newly formed city of LaVista Hills.

The Church experienced rapid growth for the first time in the 1950s and 1960s as Atlanta began to expand outwardly and farmland became suburbia. Then the area aged. In the last 15 years, Oak Grove UMC began growing again as young people moved back into the city.

“We needed to finance a $10 million building program that included renovations to existing buildings, the demolition of a 10,000-square-foot building, and the addition of a 30,000- square-foot facility that is designed to meet the needs of our growing youth and educational ministries,” Ethridge said. “We will break ground in August. The first phase will encompass 20,000-square-feet of finished space that spans two floors. The interior space of the third floor is projected to be completed in approximately three years.”

An outside stewardship consulting firm estimated Oak Grove UMC could raise $5 million in the first three years of its building program. The congregation pledged $6.3 million.

“The members of the congregation responded extremely generously with widespread support reflected in their giving, votes, interest, and participation,” Ethridge said. “When they completed their pledge cards, it was clear the Church was ready to build. We will have a second campaign at the conclusion of the first three-year period and hope to raise an additional $3.7 million.”

Finding the right lender to finance an $8 million loan on a $10 million building project was a top priority.

“My initial impression was that the Georgia United Methodist Foundation works primarily with smaller churches because I had tried to borrow $3.5 million from them before, and they did not have the capacity,” Ethridge said. “It’s a very different economy today than it was just 10 years ago, and I discovered the Foundation did in fact have the ability to handle a large loan for us.”

Rev. Charles W. Savage II, retired president/CEO of the Foundation, explains. “As the Foundation has grown in the number of assets we manage from $58 million in 2005 to $130 million in 2015, our ability to make larger and larger loans has grown as well,” he said. “Our current goal is to increase the value of our loan portfolio from $24 million to $55 million. This would enable us to reinvest about $330,000 into the ministries of the Annual Conferences in Georgia.”

Cost was the main reason Oak Grove UMC chose to partner with the Foundation.

“They easily saved us $75,000 to $100,000 in taxes and fees,” Ethridge said. “For example, the commercial lender wanted us to have a certified audit, which would cost about $25,000 per year, whereas the Foundation was satisfied with a financial review conducted by an outside firm.”

A shared mission focus was also an important consideration.

“Some members of our church were concerned about performance covenants and being in a relationship with a lender that is potentially adversarial. Those fears were calmed by entering into a relationship with the Foundation whose purpose is to partner with United Methodist churches rather than having conflicting mission purposes and profit motives,” Ethridge said. “Our congregation felt better working with the Foundation versus a commercial lender. It is also rewarding for me to know that the proceeds of our interest expense help other churches grow and develop in their time of need.

“As we went through that spirit of partnership, the Foundation was interested in our needs and alleviating our concerns. We were not handed a template stating this is the only way we loan money - take it or leave it. We had conversations about the timing of our money and the structure of the loan.”

Before the Church’s loan had even closed, Ethridge referred First UMC of Lawrenceville in Lawrenceville, Ga. to the Foundation for assistance with its financing needs.

“I did it in part to help out the Foundation and in part to help out First UMC of Lawrenceville because of the positive benefits and enormous savings that would be realized,” Ethridge said. “Every United Methodist church that is dealing with debt should contact the Foundation.”

The loan is enabling Oak Grove UMC to keep its commitment to going green, a measure that also offers considerable cost savings. For example, the Church replaced incandescent bulbs with LED lighting, switched to a variable refrigerant system, and installed energy-efficient windows. Ethridge said the lights alone on one old fixture consumed the same amount of electricity as 27 of their new fixtures.

This article was originally published in the Georgia United Methodist Foundation's 2014 Annual Report.