Financial Update

While the property isn’t for sale, it can be bought. We’ve had a few interested parties but they are all looking for too good of a deal. We take the stewardship of our property seriously and have no intention of selling it below value. Besides, God may still have us open a campus there. Please be in prayer for us to make the best decision regarding this property. If it is God’s will that it be sold please pray that he will bring the right buyer.

The purchase price of the building was $5M up front with an additional $1.15M due in 8/2014. Construction was a little over $4.5M with just over $4M of that financed.

We have made every payment on time. That said, there have been months where we were well below our threshold of comfort. In fact, since construction finished our bank account balance has been below our stated reserve policy. This policy states that we are to maintain a consistent balance of $150,000 in the bank at all times. Over the last year we have maintained between $60,000 and $80,000 most months. The Leadership Team has been watching this closely and made the strategic decision to allow this in order to fulfill the nZone vision given by God. This was expected and the up-side is that we haven’t bounced a check yet!To put all this in context, The nZone income will likely contribute about $260,000 toward mortgage payments this year while Way Beyond contributions will make up about 380,000. This left us short 240,000 which came from savings.

It’s tight. Our account balance had reached $100,000 just before our last payroll cycle ran. As far as Way Beyond, we will likely receive very close to the total amount committed. This is in large part because new people have stepped up to fill in the gaps where some people have dropped off. We are meeting our overall expectations for giving. The same is true with the New Life general fund. Our income is slightly behind budget but we have been able to keep expenses below budget to make up for it. Tough decisions have been made so we could be wise financial stewards of your gifts.

Some day it will. Most small businesses operate with negative cash flow for the first 1-3 years. The reason most fail is due to lack of enough capital to make it through the initial lean times. The nZone has covered all operational costs including payroll since we opened. It contributes to our mortgage some months, but not all. It will continue to contribute more and more in the coming months. The nZone should grow $400k in revenue next year and at least 50% of that should flow to the bottom line or said differently our cash flow should grow by at least $200k from nZone operations. A cafe, while it will cost $150-160k, will also produce an additional $40k per year in cash flow. Lastly, we are exploring any opportunity that meets the mission of the church that can help the nZone. We are particularly excited about an operation called “Romp N’ Roll.”

As anyone who has to find parking during services knows, attendance is up. We have been up nearly 300 people per Sunday since we opened the nZone. Yay God. He is drawing people to Him just as we have prayed. This also means income is up but not on a per-capital basis. It is not surprising that new comers to a church are slow to invest financially. We are still building trust with many people.In short, People are coming to New Life who had not attended a church in recent years. About 45 people have been baptized so far this year. Lives are being changed.

There are many things we’d like to build. As cash allows we will improve the nZone. The exact priority list is dynamic and changes based on need. Some of the main priorities along with rough estimates of cost are as follows:

• Baptistery $50k
• Café $160k
• The remainder of the roof $300k
• Permanent outdoor signage $60k
• Office area improvements $300k
• Misc Improvements including fully “boxing” field 1, ventaliation fans, A/V in the keg room, and more for $200k.

We also have the lump sum payment of $1.15M due in August of 2014 and would love to buy the property just to our North (toward Rt. 50). It is currently for sale for $2.5M. It was bought for $2M in 2007ish and has $.5M in entitlements. This would be a great place to build parking, turf fields and a performing arts center.

The lawyers are still working with the county to make all of our temporary permits permanent. We expect this to all go well… it’s just slow going. Our next meeting with the county will be in late February. Once this is complete we will file the paperwork to expand our ability to setup more chairs (utilizing parking across the street). Unfortunately, we were unable to get the property taxes removed from the property given the primary usage being sports related rather than church related. That’s a $80,000/yr hit we had hoped to avoid.

Overall, well. We’ve struggled with some partners and thrived with others. We are finding out what works and what doesn’t. We have a great staff and they are coming together to provide the kind of environment we want. We are still generally hearing mostly positive feedback and are addressing areas that don’t reflect well on the church or ultimately, God. If you have experience as an “nZone customer” that you’d like to share, please speak with Travis Huff or Beth Tapp. They are both working hard to make the nZone the best place it can be.