BusinessReport.com

The land baron
By Timothy Boone
Tuesday, October 9, 2007

 

The year was 1979. The Rev. Jimmy Swaggart was rapidly running out of room for his church, which had settled in Baton Rouge a little more than 10 years earlier.

Ronald Goux, who was serving as vice president and chief executive officer of Swaggart’s ministry, was tasked with looking for a new site to replace its Goya Avenue headquarters behind Bon Marché Mall.

Goux, now living in Mandeville, says he checked out sites along interstates 10 and 12. Frances Swaggart, Jimmy’s wife, liked a site at I-12 and Airline Highway.

“There was not a whole lot out on Bluebonnet,” Goux says. “But we all looked at the piece of property and prayed about this and decided that was the place where we needed to be.”

When Swaggart first looked at the land that would become the core of his ministry, Bluebonnet Road was still being built. But he could see that section was a growing area with plenty of available property. “I didn’t think about the potential for this area. I’m not a businessman. We needed land to construct our ministry. That’s what we were looking for,” Swaggart says.

Swaggart told Goux to start negotiations with D.H. Holmes, one of the property owners. After Goux acquired the land, he went back to his own business.

“You could see with the expansion that was planned for Bluebonnet and the expansion of Baton Rouge, that was the place to go,” Goux says.

Seven years later, Jimmy Swaggart World Ministries had purchased more than 200 acres of land along Bluebonnet Road stretching from I-10 to Perkins Road. The centerpiece was a 7,500-seat church, in front of which the flags of 40 nations flew, representing each of the countries where Swaggart’s services were televised.

By 1986, Swaggart was the country’s top-rated televangelist; The Jimmy Swaggart Telecast was broadcast by upwards of 200 television stations and watched by two million households. His thriving church complex consisted of more than a dozen buildings, including dormitories, television production studios and warehouses to handle the bundles of mail that came into the ministry every day.

Swaggart, a Ferriday native whose parents became Pentecostal evangelists and whose first cousins include Jerry Lee Lewis and Mickey Gilley, was not only one of the biggest private employers in Baton Rouge, but also one of the city’s leading tourist draws. So many people came from out of state to visit his church that a 120-room Quality Suites was built at I-10 and Bluebonnet in part to accommodate them.

“That was one of the epicenters of Baton Rouge,” developer Mike Wampold says, “and one of the finest parcels of real estate assembled in the state.”

And it all fell apart.

On Feb. 21, 1988, Swaggart made a tearful public confession of sin, one day after it was reported that there were photos of him with a prostitute in an Airline Highway motel room in Metairie. The image of the weeping pastor and his admission—“I have sinned”—became one of the defining moments of the year and was widely rebroadcast, discussed and parodied. Three years later, as Swaggart’s ministry started to recover, there was another huge setback. He was found in the company of another prostitute after the pair was pulled over by a policeman in Indio, Calif.

That second fall from grace—Swaggart’s son Donnie announced that his father was temporarily stepping down for “a time of healing and counseling”—reduced Swaggart’s ministry to a fraction of its size. Where thousands of people regularly attended his services, the number of worshippers was down to a few hundred one recent Sunday morning. Despite the dwindling crowd, Swaggart remains a charismatic and powerful speaker, delivering a fire-and-brimstone sermon about the dangers of sin.

“The ministry has had its problems, but it’s still a great ministry,” Goux says. “I wish people knew the real heart of Jimmy Swaggart. He’s built more hospitals and helped more people around the world.”

Buying and selling

At its peak in the early and mid-1980s, the ministry was bringing in nearly $142 million annually. It has been speculated by Baton Rouge’s real estate community that Swaggart became a real estate magnate in order to keep his ministry afloat, selling what was no longer the focus of the ministry, turned his 12-story dormitory into a 300-room apartment complex and leasing office space to the state and local businesses.

Swaggart says he has no plans to sell any more of his Bluebonnet property and leases out little of his core ministry site. “We only lease buildings that we don’t use anymore because the technology changed,” he says, citing the Blanche Appleby Computer Complex as an example.

Because of powerful laptop PCs, Swaggart says he doesn’t need all the space that was built for early 1980s computers. A “for lease” banner, visible from Bluebonnet, currently hangs from the building.

Swaggart made his first move into commercial real estate in 1990, winning a bid for office space from the Louisiana Department of Environmental Quality for $124,793 a month for five years—a deal that totaled $3.4 million.

At one point in the early 1990s, when his ministry was reeling from scandals, Swaggart was collecting $10,000 a day from developer Sam Recile, who had an option on 127.5 acres at Bluebonnet and I-10 for construction of an ill-fated retail complex called Place Vendome. Swaggart collected $2.1 million from Recile, who later ended up in federal prison after bilking investors on the project.

The value of his property increased as Bluebonnet Boulevard became one of the major commercial thoroughfares in Baton Rouge. Today, Swaggart controls 156 acres between the Mall of Louisiana and Tommy Spinosa’s Perkins Rowe development. At one point, Swaggart also owned both of those pieces of property.

Swaggart and his family also own three homes on 25 acres on Highland Road at I-10, across from Country Club of Louisiana. There has been speculation for more than seven years that Swaggart will sell some of his Highland property, which would then be developed as an upscale subdivision.

In 2000, David Watson, a Baton Rouge native who now works as a Dallas developer with former Cowboys quarterback Troy Aikman, expressed interest in building a shopping center and single-family homes on the site. That deal fell through.

“The most valuable homes in Baton Rouge are located on Highland Road,” says Wayne Pugh, a Baton Rouge real estate appraiser who currently serves as president-elect of the Appraisal Institute. Not too far from Swaggart’s land is a nine-acre estate that sold this summer for $2.6 million.

Swaggart has thought about developing the Highland property and talked to engineers, but he has yet to make a final decision on what to do with the land.

“It gets old mowing 20 acres,” Swaggart says. “I’m 72 years old, and I have my hands full with being on TV every day, the radio every day and pastoring the church.”

Swaggart’s Bluebonnet property is just as good, Pugh says. “It’s very well located, with great demographics, right in the middle of the growing areas of Baton Rouge. The only negative about the property is the traffic.”

Several weeks before Hurricane Katrina struck southeast Louisiana, a 15.76-acre tract of undeveloped land that is part of Swaggart’s Bluebonnet headquarters was appraised at $1.65 million. Appraisers say the value of the church’s Bluebonnet holdings have quadrupled in the past five years because of all the businesses and cars on Bluebonnet and the homes nearby. The property and buildings have an assessed value of more than $10.2 million.

“That takes a lot of work and business acumen,” Wampold says. “How that’s been developed out there, that’s one of the finest parts of the city.”

Troubled waters

To those people who have dealt with Swaggart, he has proven to be a tough businessman.

Family Worship Center has been involved in several lawsuits over the value of its property, including a dispute with the city-parish, which offered Swaggart $320,060 in order to run the Picardy/I-10 interchange through his property. Swaggart has argued that an appraisal shows the .3-acre section by the Mall of Louisiana is worth more than $1 million, and the case is currently in court.

The biggest—and most bitter—legal dispute centers around plans to build a new charity hospital or medical research park on a large tract of his remaining Bluebonnet property.

Health Science Center LLC acquired an option from Swaggart for 65 acres of land, but the deal fell through after Katrina. Swaggart’s attorneys accused the developers of wanting to force hurricane relief agencies off the property, and the developers said Swaggart was trying to take advantage of the soaring real estate market after the hurricane. While the lawsuit is still pending, Swaggart has since countersued, saying the church was defamed by Health Science Center’s statements and was the victim of unfair trade practices.

Attorneys for Health Science Center say they still have an option to buy the property, which would seriously reduce Swaggart’s Bluebonnet holdings. Swaggart declined comments on the suit, referring questions to his attorneys. They say the option expired in 2006. The matter most certainly will be resolved in the courts.

‘A real gentleman’

Portions of Swaggart’s property have been sold and transformed into some of Baton Rouge’s biggest development projects, although records show in some cases his ministry sold the land for less than the purchase price.

Dottie Tarleton, vice president of Stirling Properties’ commercial investment division, says Swaggart must need the money if he’s selling land. “If you’ve got a thriving, prosperous business, most of the time you hold on to land because it goes up in value or you’ll need it as the business expands.”

In 1996, Swaggart sold 68 acres at the corner of I-10 and Bluebonnet to Alabama shopping mall developer Jim Wilson for $10 million. That land was acquired by Swaggart in two purchases from D.H. Holmes and the Cadillac Fairview Shopping Center in the mid-1980s totaling $10.2 million. Wilson built the Mall of Louisiana on that tract.

Swaggart says he didn’t sell the mall site at a loss and even made a profit on the transaction, but adds he was not involved with the negotiations.

Another property, at Bluebonnet and Perkins, which Swaggart purchased in December 1986 for $2.3 million as a way of gaining access to Perkins Road, was later sold to Spinosa for his Perkins Rowe open-air lifestyle center, much of which will open later this year.

When Swaggart realized he didn’t need the land, he sold to Spinosa for $1.4 million in June 2000, saying he took the loss because the land was far below the flood plain.

Paul Carlson, the general manager of Perkins Rowe, says Swaggart has been “fantastic” and “a real gentleman.”

“We’ve borrowed a lot of his parking for the construction workers, and we’re going to borrow some more for the grand opening,” Carlson says. “He’s been very accommodating and a real advocate of Perkins Rowe.” Carlson would not disclose how much Perkins Rowe is paying Swaggart to use his parking.

Swaggart did make a profit off the sale of 65 acres on Bluebonnet. Baton Rouge General purchased the site for $4 million in May 1992, about six months after the land was donated to the ministry by Guice Inc.

For his part, Swaggart is pleased with developments such as the Mall of Louisiana, Baton Rouge General and Perkins Rowe, but he says he didn’t have much to do with them. “Those developments enhance the city, this side of town and our property here.”

That Swaggart has sold his valuable property for high-profile projects speaks volume, according to Wampold. “He wants to see nice things built there.”

Wampold made one of the biggest recent deals with Swaggart, purchasing a half-completed dormitory at Bluebonnet Boulevard and Anselmo Lane for $2.05 million in October 2004. The roots of the deal date to May 1992, when Wampold helped Baton Rouge General assemble its deal to buy land from Swaggart for a new hospital—a transaction that helped Wampold get in with the ministry.

About six years later, Wampold approached Swaggart about buying the dorm and the surrounding eight acres and turning it into a hotel. The dorm was under construction in 1988, but Swaggart’s fall and the lack of money coming into the church caused work to stop.

Wampold met with Swaggart and Clyde Fuller, a Tennessee businessman who then chaired the ministry’s board of trustees. “I discussed the building with them, and a week or so later, prepared an offer,”

Wampold says. The deal originally called for Wampold to pay $3.8 million for the building and land. But after conducting a study, he determined the project wouldn’t work at the price and it fell through in 1999.

The property stayed on Wampold’s mind. “I would drive by there and say ‘Something has to be done with this.’”

In 2004, Wampold went back to the church to start talks again. He met with the whole Swaggart family, including Frances, Donnie and grandson, Gabriel. Within 45 days, a deal was done.

“We respect and trust one another,” Wampold says. “There have been no problems.” Earlier this year, a 348-room Marriott Renaissance Hotel, which will feature a Dickie Brennan-branded restaurant, was announced for the site.

But not everyone has an inside track to Swaggart.

Tarleton, one of the leading commercial Realtors in the city, says she approached the church once about working with them. “I never got anywhere with them. They keep a low profile.”

A new lease on life

Because Swaggart operates a ministry, he doesn’t pay taxes on any property related to religious services, such as the church building itself or the bible college. But he does have to pay taxes for any commercial purposes.

Last year, the Family Worship Center Church paid $90,604 in parish taxes for property Swaggart receives rent on, such as the two dormitory buildings that were turned into Bluebonnet Towers, a high-rise apartment complex.

Possible tenants are directed to the ministry’s Web site for rental information. According to the site, a one-bedroom, one-bathroom unit that is 456 square feet rents for $600, a two-bedroom, one-bathroom unit that is 684 square feet rents for $750 and a two-bedroom, one-bathroom suite that is 456 square feet rents for $500. Swaggart says the rental activity isn’t significant. When asked how much rental income is generated for the ministry, he says jokingly, “Not nearly enough.”

One of Swaggart’s biggest tenants is The Advocate, Baton Rouge’s daily newspaper with which he has feuded for decades. The newspaper signed a lease with Swaggart in 2004 and is paying him about $1.37 million annually to lease a 152,000-square-foot office building off Bluebonnet tucked between the Ketchum Health Fitness building—which Swaggart leases for former LSU football player Steve Ripple for $288,000 annually—and the World Evangelism Bible College building.

George Kurz of Kurz & Hebert Real Estate, who helped broker the agreement between Capital City Press and Swaggart, says the deal came together fairly easily, despite the large amount of space involved and the need for the board of Family Worship Center to sign off on the deal.

“They’re all reasonable people over there,” he says. At the time, Swaggart was told only that it was a major employer seeking office space. Capital City Press did not want to publicize it was looking for a replacement for its longtime Lafayette Street offices.

Branon Pesnell, an agent with Beau Box Commercial Real Estate who tracks the local office space market, says he was a little surprised to hear the rental price is roughly $9 a square foot. Pesnell says he’s never surveyed Swaggart’s office space, but presumed it would lease in the $13 to $15 a square foot range, because that’s what similar office buildings in the area go for.

“Those properties have always been off of the radar screen,” he says. “They’ve never been advertised real well, and there’s very little known about what is available over there.”

Pesnell says a “stigma” might exist for businesses about leasing space in a church campus instead of an office park. “It seems like it’s a gated community out there,” he says. But with The Advocate now leasing office space from Swaggart, and the Wampold’s hotel to start construction on land purchased from Swaggart, there could be changes in the future.

“Things have changed along the way and that’s why he (Swaggart) is holding what he has now,” Wampold says. “But there are real good opportunities here for him to get a good price and for something really nice to be put there.”

MAJOR TRANSACTIONS

Major real estate transactions involving the Rev. Jimmy Swaggart:
Sept. 21, 1967: Jimmy Swaggart buys Tara lot for $13,000. The lot becomes his first home in the city.
April 30, 1970: Jimmy Swaggart buys lot at 6746 Goya Ave. from Camp Meeting Revivals for $16,000. This becomes the core of his original headquarters in Baton Rouge.
Jan. 1, 1974: Camp Meeting Revivals donates 22 lots in Melrose East to the Jimmy Swaggart Evangelistic Association.
May 1975: Jimmy Swaggart Evangelistic Association buys four lots in Melrose East for $42,000 in four separate deals.
April 30, 1979: Jimmy Swaggart Evangelistic Association starts to assemble Bluebonnet Boulevard site by purchasing 46.15 acres from EBR Associates, made up of D.H. Holmes, Sidney Lassen and Monumental Properties Trust, for $1.9 million.
June 6, 1979: Jimmy Swaggart Evangelistic Association buys 53.68 more acres from EBR Associates for $2.2 million.
Sept. 20, 1979: Jimmy Swaggart buys 11.558 acres on Highland Road for $231,160 from Rufus D. and Evelyn Hayes.
May 7, 1980: Donnie Swaggart and his wife, Debra Robertson, buy a lot at Highland and Perkins roads for $34,800.
Nov. 14, 1980: Jimmy Swaggart Evangelistic Association buys 2.75-acre lot at Bluebonnet for $300,000 from the Presbytery of South Louisiana Presbyterian Church.
April 2, 1981: Jimmy and Frances Swaggart buy 3.942 acres on Highland Road from Della Hayes for $159,665.
Aug. 6, 1981: Jimmy Swaggart Evangelistic Association buys 3.942 acres on Highland Road Acres for $115,000.
Feb. 17, 1982: Jimmy Swaggart Evangelistic Association buys 36.77 acres on Bluebonnet from Oak Ridge Plaza, a group that includes former Gov. Edwin Edwards, for $750,000.
May 31, 1983: Jimmy Swaggart Ministries buys 29.129 acres on Bluebonnet from EBR Associates for $2.9 million.
March 14, 1984:Jimmy Swaggart Evangelistic Association buys .97 acres on Anselmo Lane from the Griffin family for $125,000.
Dec. 21, 1984: Jimmy Swaggart Ministries buys 6.933 acres on Bluebonnet from the Johnson and Bullie families for $519,975.
Jan. 22, 1985: Jimmy Swaggart Ministries buys 54.795 acres at Bluebonnet and Interstate 10 from CF Baton Rouge Association for $6.5 million.
Feb. 11, 1985: Jimmy Swaggart Ministries buys home at 1269 Tara Blvd. from Frances Swaggart for $197,000.
March 26, 1985: Frances Swaggart buys six acres on Highland Road from Jimmy Swaggart Ministries for $430,000.
April 2, 1985:Jimmy and Frances Swaggart buy six acres on Highland from Jimmy Swaggart Ministries for $430,000.
June 20, 1985: Jimmy Swaggart Ministries buys 13.29 acres at Bluebonnet and I-10 from D.H. Holmes for nearly $2.7 million.
June 28, 1985: Jimmy Swaggart Ministries buys a 14-acre parcel on Highland Road from Rufus D. Hayes for $750,000.
Aug. 29, 1986: Jimmy Swaggart Ministries acquires 23.61 acres between Ward’s Creek and I-10 from Robert Peden for $150,000. The total value of the land was $390,000, but Peden donated $240,000.
Dec. 18, 1986: Jimmy Swaggart Ministries purchases 28.89 acres between Wimbeldon subdivision and Perkins Road from Perkins Road Ltd. Partnership, made up of Eugene P. Sabatier, Henry P. Sabatier and Joseph A. Sabatier, for $2.3 million.
July 10, 1990: Jimmy Swaggart Ministries signs option with Hannover Corp. to sell 68.15 acres at Bluebonnet and I-10 for $11.25 million.
Nov. 16, 1990: Jimmy Swaggart Ministries leases office building to Louisiana Department of Environmental Quality for $124,793 a month for five years. The deal totals $3.4 million.
Dec. 30, 1991: Jimmy Swaggart Ministries reaches option with Byford Beasley, buying for Place Vendome Corp., to sell 177 acres at Bluebonnet and I-10 for $15.95 million.
Dec. 30, 1991: Jimmy Swaggart Ministries receives donation from Guice Inc. for 65.95 acres on Bluebonnet.
May 1, 1992: Jimmy Swaggart Ministries sells 65.95 acres on Bluebonnet to General Health Foundation for $4 million. Baton Rouge General Medical Center is now located on this site.
Jan. 22, 1993: Jimmy Swaggart Ministries extends lease with the DEQ for $5.5 million.
Feb. 17, 1993: Jimmy Swaggart Ministries donates 71.8 acres on Bluebonnet to Family Worship Center.
Dec. 22, 1994: Jimmy Swaggart Ministries sells 14 acres on Perkins to Church of the Highlands for $750,000.
April 9, 1996: Jimmy Swaggart Ministries sells 68 acres at Bluebonnet and I-10 to the Mall of Louisiana for $10 million.
July 20, 1998: Jimmy Swaggart Ministries leases a 13,806-square-foot building to the Office of Public Health, Human Services for $1.17 million.
Jan. 4, 2000: Family Worship Center Church leases building to Hibernia National Bank for $4,927 a month.
June 1, 2000: Family Worship Center Church sells 28.87 acres at Bluebonnet and Perkins to Tommy Spinosa for $1.4 million. Spinosa is building the Perkins Rowe center on the site.
Jan. 31, 2001: Family Worship Center Church leases 161,231 square feet to the DEQ for two years at $5.1 million.
Aug. 16, 2004: Family Worship Center Church signs lease for office building at 7290 Bluebonnet with The Advocate for $1.368 million a year.
Oct. 29, 2004: Family Worship Center Church sells partially built dorm and eight acres to Mike Wampold for $2.052 million.
Jan. 28, 2005: Swaggart Ministries Health Club leases Ketchum Health Fitness Center to Louisiana Athletic Performance Center for $288,000 a year.

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