Church facing ruin over property

A Whangarei church that spent more than $7 million on two properties in two days faces a multimillion-dollar debt and the prospect of liquidation after failing to come up with money owed.

"We were naive and we have made some big mistakes," the church's minister said, and a judge has ruled that the church has no arguable defence.

Crossroads Community Church, through the Whangarei City Assembly of God Property Trust, spent more than $7 million on the two properties in October 2007.

Unconditional contracts were signed - for the Placemakers site in Walton St and a building at Regent occupied by Steve Perkins Upholsterer and owned by the Perkins Family Trust - for $5 million plus GST and $2.4 million plus GST respectively, on October 18 and 16.

The church occupies the building adjoining the upholstery business, drawing average Sunday attendances of about 400. It failed to come up with the money on either settlement date - April 1, 2008, for Placemakers, and February 20 last year for the other.

Steve Perkins said yesterday the only money Crossroads had paid since the contract was signed 28 months ago was a $177,000 deposit, plus GST.

Crossroads director Donald James said the church had planned to sell the whole Regent building and carpark at the back to pay for establishing a new church base at the Walton St site.

He said "property and financial people" had recommended the strategy as a way of financing a suitable property, big enough to cater for a large congregation, and the decision to go with it "showed up our inexperience in the property market".

The church board and the congregation had unanimously supported the proposals.

The Perkins Trust has filed an application to put Crossroads into liquidation. The trust has already successfully sued the church for damages. Proceedings were initiated last November.

- APN