Update: The proposal that Fourth Church purchase a new manse for the use of its current and future senior pastors was approved by the congregation at the May 6, 2018, congregational meeting.

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This synopsis summarizes the full proposal that was mailed to the homes of Fourth Presbyterian Church members on Thursday, April 12, 2018.

The accompanying letter to Fourth Church members is posted here.

I. Introduction

Fourth Presbyterian Church has provided a home for its senior pastor for more than 80 years. Because the church was founded in 1871, more than 40 years before occupying its current sanctuary, the church has in all likelihood provided a home for more than 120 years. The current Sanctuary and Parish House were opened in 1914 and contained a manse for the senior pastor. In the mid-1990s, Dr. John Buchanan moved his family out of the old manse. The increasing noise and congestion along Chicago’s booming retail corridor made living and raising a family there undesirable. Since the Buchanan family left the old manse, it has been converted to other uses, including office, function, and meeting spaces.

The church supported Dr. Buchanan’s desire to leave the manse and modified his compensation package to include financial assistance for other housing. In 2014 Fourth Church called its current senior pastor. The economic challenges of relocating a family to Chicago were discussed at the time of her call. Among other things, she was told the church would within a reasonable time review the issue of housing support for its senior pastor.

In September 2016 several church officers, including the Clerk of Session, the President of the Board of Trustees, the Chair of the Joint Finance Committee, the Co-Chairs of the Personnel Committee, the Treasurer, and the Director of Business Administration, began to discuss the manse need. The Session and the Board of Trustees then appointed that committee to study the matter and make a proposal to address the church’s need for a modern, functional, and accessible home for the current and future senior pastors. The committee was charged with finding the best, lowest-cost option so as to minimize undue strain on the operating budget.

II. Call for Action

Section G-4.0101 of the Book of Order provides that the congregation shall approve the acquisition of property by the church.

The Session and the Board of Trustees of Fourth Presbyterian Church, having carefully considered this proposal, the need it addresses, its costs and benefits, and reasonably available alternatives, endorse the following proposal and respectfully request that the congregation vote in its favor.

III. The Proposal

The Session and the Board of Trustees recommend the church acquire a home for the use of its current and future senior pastors on the following terms:

Proximity to the church: The new manse should be within a reasonable distance of the church to facilitate the senior pastor’s ready presence to fulfill responsibilities that may arise at any hour, any day of the week, as senior pastors of Fourth Church have done since its founding.

Acquisition cost and financing, as well as estimated annual costs: The committee recommends that the acquisition cost be borrowed under the church’s existing credit line, at a rate that is below the cost of a standard mortgage and significantly less than the annualized return on the church’s invested funds over the last fifteen years. (Detailed numbers are included in the full proposal mailed to Fourth Church members.)

Financial benefits: Among the financial benefits of the church acquiring a new manse is that, under Illinois law, a church-owned manse is exempt from property tax, a substantial economic benefit. Also, the estimated annual cost for owning a new manse would be substantially less than market rent for renting senior pastor housing. Finally, the proposal excludes estimated increases in the manse’s value that accrue over time to the church’s benefit. (Again, full details are included in the full proposal mailed to Fourth Church members.)

Implementation: The church is consulting with a real estate broker, independent of the church and experienced in the neighborhoods near the church, who will lead the search. The Property Committee of the Board of Trustees, charged with overseeing all church property, would manage the new manse, too. The church will own the manse.

Its current and future senior pastors will be expected to live in the manse rent-free.

Additional points in favor of acquiring a manse:

(a) The church will not need to recruit future senior pastors without offering the certainty and security of nearby housing. This will enhance the congregation’s ability to attract the strongest candidates in the future.

(b) With ownership, the church will benefit by appreciation in manse value.

(c) The financing cost is relatively low and avoids reducing the church’s invested funds on which it depends to support the operating budget. Appropriate church committees will monitor the borrowing rate and investment returns to determine when best to pay down borrowings. They will also consider whether to raise funds in a capital campaign to reduce borrowing.

(d) The committee studied extensively all reasonable alternatives. All other options cost more, and none is free of property taxes. A professional estimate concluded rehabbing the old manse would be significantly more expensive.

(e) The senior pastor has agreed to a compensation reduction that reduces church costs by an amount in excess of estimated annual operating costs. Thus, to the extent the church raises money to pay off the borrowing, it will own a new manse for essentially no added annual cost.

(f) Ensuring that the current and future senior pastors will not be subject to the vagaries and costs of the Chicago rental market will help solidify the church’s relationship with their senior pastor.

Respectfully submitted by the Senior Pastor Housing Committee:
     Robert Doak, Treasurer
     Arlene Faulk, Co-chair of the Personnel Committee
     Armon Haagen, Recent past chair of the Joint Finance Committee
     Marilee Hopkins, Former Treasurer
     Andrew McGaan, Clerk of Session
     Marc Miller, Co-chair of the Personnel Committee
     Chris Pfaff, Recent past president, Board of Trustees
     Marty Sherrod, Director of Business Administration
     Shannon Kershner, Pastor (ex officio)