In God We Bust

The plight of debt-ridden Great Hills Baptist in Austin shows that the financial health of Texas’ superchurches isn’t always so super.

THIS SUMMER, shortly before the Fourth of July, Austin’s Great Hills Baptist Church put on the kind of religious extravaganza that has become commonplace for the huge congregations known as superchurches, where the line between worship service and theatrical performance sometimes disappears. For the special “Celebration of America 1996,” the church choir was decked out patriotically, the men sporting stars-and-stripes vests, the women adorned with red-white-and-blue scarves. At the climax of a tribute to the military, as the audience gasped in astonishment and cheered, a drill sergeant barked out an inspirational message in march cadence and two Marines in full camouflage rappelled down a rope from the ceiling. When diminutive, lion-maned pastor Harold O’Chester finally approached the podium, it was almost a letdown.

In the twelve years since Great Hills relocated to a prominent location on a hilltop on the northwest edge of the city, the church has set itself apart “as a moral voice for Austin,” in the words of O’Chester. “Because of our size,” he says, “we can play that role in the Capital City.” Indeed, Sunday attendance hovers above 2,500, well past the threshold of 2,000 worshipers that lofts a congregation into the superchurch realm. But the exalted status has come at a steep price. During the past decade, when the bulk of its expansion occurred, Great Hills fell deeper and deeper into debt; for the first six months of 1996, the church held services while in bankruptcy. The congregation was reminded of this fact on the day of the patriotic celebration, when the 69-year-old O’Chester announced that the bondholders who had been threatening foreclosure had finally accepted an agreement for payment. The news was greeted with polite applause, but there was little joy in the settlement for either the bondholders, who’ll receive considerably less than they are owed, or the churchgoers themselves, since Baptists believe that paying one’s debts is a Christian duty. “You shouldn’t borrow money unless you can handle what you’ve taken on,” says Bill Holman, the chairman of the bondholders committee and a former chairman of the First National Bank of Henrietta. “The Bible teaches that you’ve got to lay a firm foundation for what you build.”

The eighties, Jerry Falwell once proclaimed, marked the era of the superchurch, and Texas soil proved particularly fertile: Both the First Baptist Church of Dallas and the Second Baptist Church of Houston boast congregations as big as small towns. Second Baptist, in fact, plans to build a second church in Katy. Evangelical churches by definition are dedicated to spreading the gospel to as many souls as possible (the Greek word “euangelos” means “bringing the good news”), and a number of evangelical church leaders embrace a “grow or die” philosophy. Yet if Great Hills’s transformation from a midsize neighborhood church into an ambitious multi-ministry operation with a 3,600-seat sanctuary and a twelve-grade Christian school is fairly common, so is its passage into bankruptcy. Great Hills is the last major church to reach a final settlement out of dozens of churches in Texas that defaulted on loan payments after the economic downturn of the late eighties. A week after the Great Hills announcement, the Church on the Rock held its last service in its cavernous 5,000-seat sanctuary in Rockwall, east of Dallas, before moving to the much more modest sanctuary of Lake Pointe Baptist Church in Rowlett, with which it had swapped property. In that settlement, Church on the Rock bondholders received only about 50 percent of what they were owed.

“Church finance is not for those who don’t want their faith challenged,” says Bruce Bowles, a longtime member of the Baptist Church Loan Board in Dallas, whose lending policies have been copied by the nonprofit loan departments of a number of banks around the state. “Our own default rate is minimal,” he says, noting the board’s rigid guidelines: A loan is restricted to no more than 75 percent of the church’s market value and loan payments to no more than 30 percent of its monthly income. While only two of the hundreds of churches that have received loans from the board have declared bankruptcy, churches that have financed their building programs from banks or bonds (such as Great Hills) have often gotten into trouble. The reality is that churches are just as vulnerable as banks or other businesses to boom and bust—to the perils of overexpansion, to the ups and downs of the marketplace, to the consequences of risky decisions.

Small churches are not immune to financial problems either, says Bowles. He recently counseled a thirty-member church whose future was in jeopardy after losing eight members—more than a quarter of the congregation. In fact, with greater numbers, churches have more places to turn for contributions and can provide more services to attract new members. But larger churches are harder to convert to other uses should the buildings have to be put up for sale. Bowles recalls one big church that was transformed into a recording studio, but such conversions are rare. The real problem with some larger churches, he says, is the outsize ambitions of the preacher or the congregation. “Churches are made of individuals,” he observes, “and people sometimes want more than they can afford. They’ll say, ‘We want this for the Lord’s work,’ when the reality might be that it’s more of the basic human desire to have something bigger or better than your brother down the street or across the country. It’s hard to tell someone he’s doing this because of an ego problem.”

In the case of Great Hills, expansion seemed as inevitable as a child’s outgrowing his overalls. Harold O’Chester arrived in Austin in 1969 after serving a number of churches in Mississippi, all of which grew rapidly under his leadership. As the congregations increased in size, the churches built new sanctuaries, and he found a succession of pulpits elsewhere. “I was told by an old-timey preacher that when you build a building, you should move on,” he says. He stirred up

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