wfn.org | $16M ends United Methodist role in Pacific Homes

[NewsDesk <NewsDesk@UMCOM.UMC.ORG>]

March 30, 1999 News media contact: Tim Tanton*(615)742-5470*Nashville, Tenn.
10-71B{175}

By Jim Johnson*

With an electronic wire transfer of more than $16 million to two United
Methodist annual conferences and the General Council on Finance and
Administration (GFCA), the 19-year saga of Pacific Homes and its
relationship to the church has ended.
	
The payment of $16.4 million on March 18 retires the full loan amount
provided to Pacific Homes by the California-Pacific Annual Conference, the
Desert Southwest Annual Conference and GCFA in a 1993 debt restructuring
agreement.  
	
Under terms of the final settlement, the Desert Southwest Conference
received $2.6 million, the California-Pacific Conference nearly $9.1
million, and GCFA $4.7 million.
	
The settlement followed the merger of Pacific Homes, California Lutheran
Homes and FACT Retirement Services. The merger and subsequent debt
restructuring resulted in the retirement of the United Methodist Church
loans.
	
Retirement of the loan brings to a close a series of actions dating back
nearly 20 years, to when the former Pacific Southwest Annual Conference
faced the prospect of the bankruptcy of Pacific Homes and resulting
lawsuits. 

Pacific Homes provided retirement housing in Arizona, California and Hawaii,
and ran into trouble when cash flow problems arose.

In 1981, through a reorganization settlement agreement, a $19.5 million loan
was given to Pacific Homes. Funds were obtained from local churches in the
Pacific Southwest Conference, all other U.S. annual conferences, the GCFA
and the Board of Global Ministries.

The loan was again restructured in 1993 with a resulting $7.5 million
payment to the two conferences. The funds were used to repay all the other
annual conferences that had provided funds as well as the Board of Global
Ministries.

GCFA "is very pleased to retire the loan," said Sandra Kelley Lackore, top
staff executive of the agency. 
 
"The process of developing budget recommendations for the 2001 through 2004
quadriennium is occurring now, so this payment is very timely," she said.
"These funds will be put to good use financially supporting worldwide United
Methodist mission and ministry."
	
Virgil Stites, chairman of the California-Pacific Conference Pacific Homes
Negotiating Committee, said retirement of the loan "is a moment to rejoice
in our connectional system." Pacific Homes has prospered during the
restructuring, he said, "and, more importantly, the residents have been
secure."
 
Stites said the conference's joint council for coordination, in cooperation
with the bishop's cabinet and the council on finance and administration, is
developing recommendations for the use of the funds. The recommendations
will be presented to the annual conference for approval in June.
	
Joel Huffman, Desert Southwest Conference treasurer, said the settlement
funds will be placed in an investment account with the Desert Southwest
Foundation until action at the annual conference session in June.
	 	   
# # #

*Johnson is editor of the Circuit West United Methodist Review, the
newspaper of the California-Pacific Annual Conference.

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