Both The Journal and The Pasadena Star-News, a daily newspaper that frequently reports news of the WCG, have attempted to learn the sale prices.
In an interview with WCG controller Ron Kelly Sept. 13, Mr. Kelly explained that confidentiality is necessary in such business proceedings. (See " Church Official Discusses Future Role of the WCG," The Journal, Sept. 20.)
He pointed out that Sares-Regis is a developer and needed to keep the sale amount secret for business reasons. He said that in the selling-and-buying process all parties signed confidentiality agreements.
Incentive to speak up
Yet the Star-News reported recently that Sares-Regis paid the WCG "just over $4 million per acre for the 12-acre parcel," which figures out to about $48 million for the "east campus."
The quote, attributed to a Sares-Regis official, was part of an article reporting the city's desire to build new parks.
The Pasadena city council had intended to charge developers a city-imposed fee amounting to a tax of $3,659 for each new housing unit constructed in the city. But now the city is talking about increasing that fee to $19,743 for every new housing unit constructed.
In the Nov. 9 issue of the Star-News appears an article by Gary Scott titled "Parks Fee Hike May Spur Lawsuit."
In it Mr. Scott quotes Ed Eyerman, a representative of the Sares-Regis Group who said the $19,743 is "legally defective."
Sares-Regis, according to the report, plans to build 832 condominiums and apartments on the east campus of the former church and Ambassador College property at Green Street and Pasadena Avenue.
Mr. Eyerman said the fee increase will add $12 million to the cost of the project.
"Sares-Regis paid just over $4 million per acre for the 12 acre parcel," the article quotes Mr. Eyerman as saying, "leaving the developer little room to absorb the unexpected cost."
Just over $4 million per acre times 12 brings you to $48-50 million as the sale price of the east campus.
WCG controller denies figure
So on Dec. 6 this writer spoke with the church's controller, Mr. Kelly, and asked whether he could confirm or deny that the church sold the east campus for $48 million.
"I can confirm that was not the selling price," answered Mr. Kelly.
He also reiterated that both parties to the sale signed confidentiality agreements that prohibit them from releasing the sale price to the public.
Mr. Kelly would not say whether the price was higher or lower than $48 million. He said that to say anything about the price would violate the agreements signed.
Then why did Mr. Eyerman, director of business development for Sares Regis, state the price?
Mr. Kelly said Mr. Eyerman may believe that enough time had passed so there was no need for continued secrecy.
The Journal asked Mr. Scott, the Star-News writer, if he could follow up on his report.
Mr. Scott, on Nov. 17, E-mailed this writer, stating that Mr. Eyerman had stated to him that the original confidentiality agreement was the WCG's idea, not his company's.
"I asked what they [Sares-Regis] paid for the land," said Mr. Scott, Mr. Eyerman "answered as it appeared in print. And WWCG [Worldwide Church of God] was the one that insisted on secrecy about the sale price, not the developer."
Mr. Scott, in a Dec. 7 E-mail to this writer, further stated that Mr. Eyerman declared there had been no agreement in the first place.
"According to Ed Eyerman," wrote Mr. Scott, "there was no confidentiality agreement at all" and that "the land cost just over $4 million per acre for what is roughly 12 acres of land."
Mr. Eyerman declined to talk with The Journal. He advised this writer that any further information should be obtained from Bill Montgomery, president of multifamily acquisitions and development at Sares-Regis.
So The Journal contacted Mr. Montgomery Dec. 16. He said it is against policy of Sares-Regis to reveal a selling price.
But was a confidentiality agreement signed between the WCG and Sares-Regis?
"Yes, there was," Mr. Montgomery said.
Then why did Ed Eyerman say there was not?
"Ed Eyerman was not a part of the transaction," he said.
The sale price of the lower campus to Harvest Rock and Maranatha is not publicly known. The WCG has said that it, Harvest Rock and Maranatha signed confidentiality agreements.
The lower campus has 13 acres, which includes the Ambassador Auditorium.
The Journal interviewed Doug Huse, director of operations for Harvest Rock, on Dec. 13 concerning the purchase.
Mr. Huse agreed that a confidentiality agreement exists that binds the three parties to the sale: WCG, Harvest Rock Church, and Maranatha High School. He said it was a mutually acceptable arrangement.
Mr. Huse also said the confidentiality agreement made it difficult for the buyers to raise money for the purchase, since no one was supposed to reveal the asking price.
He gives God the credit for paving the way for the purchases.
"No one could have put together the parties that wanted to keep it [the lower campus] intact," he said. "The WCG is happy, Harvest Rock is happy, and the city is happy about all this."
The Journal asked how buyers of the property could ask for money from their donors and motivate them without spelling out the amounts they needed to complete the transaction. How does the would-be buyer communicate with its constituency if its goals are shrouded in financial secrecy?
Mr. Huse said the buyers have learned to live with the restrictions on full disclosure and are indeed meeting their financial goals.
He said the buyers "got a good value." He said no one could replace the property for what it cost but that it was not sold "for a bargain-basement price."
Mr. Kelly had earlier said that Harvest Rock is telling people it bought the land and property for considerably less than its fair-market value.
"But that is true only if they had to construct those buildings new at today's prices," he said. "They purchased the property at fair market price."
A press release at Harvest Rock's Web site ( www.harvestrockchurch.org) posted the following:
"Q: What was the purchase price of Ambassador Auditorium?
"A: We have agreed with Maranatha High School (MHS) and the Worldwide Church of God (WCG) that we would not disclose the price of the Auditorium or the overall price of the campus that was acquired. However, we can say that the mortgage of the money owed by HRC [Harvest Rock Church] to Evangelical Christian Credit Union [acting as a mortgage company] is $7.5 million that must be paid in full within five years."
The Q&A on the Web site did not point out that the purchasers might have borrowed money from other sources as well. That is likely.
Maybe next year
The Journal asked Mr. Kelly if the WCG will release a financial report to church members that includes the sale prices. Similar reports used to be released yearly to WCG members in The Worldwide News.
"Probably not this coming year," he said, "but it may be done the following year."