sethpayne wrote:For years I've been reading comments about how the City Creek Mall is an example of the church wasting funds that could be used to help the poor etc...
I suppose what puzzles me a bit about this criticism is that people talk about this money as if it were just thrown away. In reality, the church converted one asset (cash) into another asset (property and other businesses). The key difference being that City Creek has the potential (and is quite likely) to produce consistent returns in the coming years. In other words, the church still retains a value of 2 billion but in reality, the asset has a much higher value when we consider the Net Present Value. Depending on the expected return rate and the cashflow generated by City Creek, perhaps the value is now 3 or 4 billion (probably more).
City Creek was not an expense, it was an investment because no value was lost and the investment will provide returns. These returns can then be used to fund a wide range of church activity -- including providing for the poor. Keeping this in mind, doesn't the investment demonstrate responsible stewardship? Spend the cash and its gone forever. Build City Creek and cash returns continue for as long as the business remains operational/profitable.
What am I missing?
It's been a while since I've looked at speculation regarding the profitability of City Creek, but it seemed to me at the time that the Church timed the market very badly for a real estate venture. The brethren cast their greedy eyes upon Dubai, and sought to build their own similar city, and like Dubai and everyone other baron, real estate profiteer, they may have lost their white shirt. It begs the question to say that the net present value justifies the investment (or doesn't) out of the concept of a NPV alone; it must be demonstrated the NPV is in the black. And further, the risk class of the investment must be taken into account. If The mall generates profits equal to or slightly better than holding bonds or something, then it's still a failure. I'm sure some Mopologist can pull out some "Enron math" to show fantastic future payoffs.
But for me, the biggest revelation was that it shows the Brethren just don't consider it worthwhile to invest in the Church, to reactivate and so forth. Sure, it can be argued they are diversifying, and everyone diversifies. But this goes beyond diversification. It's why I said that the Church had switched industries effectively, from religion to real estate. I also drew parallels to Dubai. In a sense, Dubai is diversification as the profits from oil are so high, but there must be some consideration that oil profits will only be in the ground so long, and they will need to switch industries. It's the same for the Church. They have analysts like crazy, and it doesn't take a great one to see that the market for Mormonism has pretty much matured worldwide. There just aren't many converts left in the ground.
And of course, the question is raised, just how financially successful does the Church need to be? If there's only going to ever be 30 million members, say, then have an organization that costs the membership enough to support 30 million members. Why have this ultra-rich side -- which it won't if this is a flop -- that is way out of balance with the wealth of the members? why should a family of 5 struggling to make ends meet pay tithing while the Brethren paint the stretts of Salt Lake with gold? If sacrafice is a blessing, then well, there is some hypocrisy going on here.