BREA, Calif. -- Not even Ambassador Family Church could avoid California's current plague of foreclosures.
In mid-April, $1 billion Evangelical Christian Credit Union foreclosed upon the Ambassador Family Church campus in Oceanside, Calif., taking back the 15-acre property at a trustee's sale, said Jac La Tour, communications and public relations manager.
Constructed in 2000, the property consists of a 25,000-square-foot church building, a large parking lot and plenty of room for future development. As of January 2007, San Diego County records valued the property at $5.6 million. ECCU's 5300 report from Dec. 31 showed $5.5 million in repossessed assets on its books.
La Tour said the foreclosure is the first of its size in the credit union's history, as far as he knows. ECCU's members are mostly nonprofit evangelical organizations like churches, schools and missionaries; so, compared to other natural person credit unions, ECCU has few consumer members. Despite serving a nonprofit FOM, the credit union has effectively managed credit risk, La Tour said.
"Our loan losses are historically very low," he said. "In 2007, for example, we had 0.13% charge-offs, compared to industry average of 0.15%, so this is a very unusual occurrence for us."
The $1 billion 12,000-member credit union's March 31 financial performance report showed zero charge-offs for first quarter 2008. The credit union didn't post any charge-offs during 2007 until the third quarter.
La Tour declined to comment on why the church was unable to make payments on the property, saying that story was the church's to tell.
According to an Ambassador Family Church press release regarding the matter, two issues contributed to the foreclosure.
"Through a series of unexpected events, the cost of the building rose far above original estimates," the release stated, blaming conflicts with building contractors, unexpected city requirements, time delays, noncompliant contractor lawsuits and rising interest rates.
The release also addressed the public divorce of Senior Pastor Barry Cook, which drove away members and other church leaders. In 2005, as the church prepared for the building's grand opening, the church had 800 members. By early 2008, membership had decreased to 200 members. Though Cook is still involved with the church, another pastor has been brought in to lead the congregation.
La Tour did say that the events that led to the foreclosure were unusual and not indicative of a larger economic problem among evangelical ministries.
The credit union was making its final choice among commercial real estate agents at press time and anticipated placing the property on the market by May 9. La Tour said the credit union doesn't have any experience selling repossessed church campuses, so he doesn't know what kind of demand the northern San Diego County market will provide.
"We can't control who buys it, but we would desire another church or school," La Tour said.
The odds aren't bad they'll find a buyer they like. According to the Hartford Seminary's Institute for Religion Research, Southern California is a hotbed of mega-churches, defined as a "protestant congregation with a sustained average weekly attendance of 2,000 persons or more in its worship services."
As of 2005, there were 1,200 mega-churches, twice as many as Hartford found in its 2000 survey. More than half are evangelical and are located in southwestern and southern states.