# ARV Research Package — Former United Artists Theater
**8275 W Amarillo Blvd, Amarillo, TX 79124**
**Buyer:** Power Church (Pentecostal congregation, Amarillo TX)
**Use Plan:** 1500-seat sanctuary + 9 income-generating uses (gym, daycare, café, conference rentals, weddings, banquet hall, multi-tenant office, recording studio, sports/event facility)
**Research Date:** 2026-05-04
**Bank:** First State Bank Spearman (refi underwriter at month 13)
**Critical Hurdle:** ARV must clear **$8.24M** for 75% LTV refi to deliver $6.18M payoff against the $6M total project basis.

---

## 0. Property Snapshot (verified)

| Attribute | Value | Source |
|---|---|---|
| Address | 8275 W Amarillo Blvd, Amarillo TX 79124 | LoopNet listing |
| APN / Parcel | 216600 (PRAD ref R005754004650) | Crexi property records |
| Building size | 83,422 sq ft | LoopNet, Llano Realty |
| Lot size | 10.61 acres / 463,071 sq ft | LoopNet |
| Parking | 629 spaces (7.54/1,000 sf) | LoopNet |
| Year built | 1998 | LoopNet |
| Zoning | HC – Heavy Commercial | LoopNet |
| List price | $5,500,000 ($65.93/sf) | Llano Realty / Deeter Prater |
| Status | Vacant ~2.5 years | listing history |
| Restriction | **Restrictive covenant prevents future use as a movie theater** | LoopNet listing |
| Power Church target close | $4.0M effective + $2.0M renovation = $6.0M total basis | Buyer plan |
| **Refi hurdle (75% LTV)** | **$8.24M minimum appraisal** | First State Bank Spearman terms |

Sources:
- [LoopNet listing 27169248](https://www.loopnet.com/Listing/8275-W-Amarillo-Blvd-Amarillo-TX/27169248/)
- [Crexi property record APN 216600](https://www.crexi.com/property-records/8275-AMARILLO-AMARILLO-TX-79124/e379f0181e086fd4230ae73c3edd8375318fc394)
- [LoopNet property record R005754004650](https://www.loopnet.com/property/8275-w-amarillo-blvd-amarillo-tx-79124/48375-R005754004650/)

---

## 1. Replacement Cost Approach

### National & Texas baselines (2025–2026)

| Source | Range $/sf for new church construction | Notes |
|---|---|---|
| Fellowship Development (2026) | $200 – $500/sf | Excludes land, FF&E, AV |
| China Steel Build Sales (2025) | $150 – $300/sf | Steel-frame church |
| Maxx Builders TX 2025–2026 | $190 – $340/sf | All Texas commercial |
| McKnight Group ballpark | $250 – $450/sf | Mid-range traditional |

**Texas Panhandle adjustment:** Amarillo is a low-cost secondary market — labor and materials run roughly 10–15% below Houston/Austin; closer to Lubbock/Waco rates. Use **$220 – $260/sf** for ground-up church/assembly construction in Amarillo (2025–26).

### Replacement-cost-new (RCN) calculation, Power Church footprint

83,422 sf × $240/sf (midpoint Amarillo new-build) = **$20.02M RCN**

That figure is what an *all-new* 83,422 sf church would cost from scratch in Amarillo today.

### Depreciation / conversion adjustment

For a 1998-built shell renovated to "like-new" condition in 2026, appraisers typically apply:
- Effective age ~10–15 years (post-renovation) = ~25–30% depreciation factor
- Special-use functional obsolescence (sloped floors, fixed seating risers, theater pods) = additional **15–20% physical-functional discount** unless those areas are demolished and re-floored

**Replacement-cost ARV calculation:**

| Variable | Value |
|---|---|
| RCN (new construction equivalent) | $20.02M |
| Less depreciation (25%) | -$5.00M |
| Less functional obsolescence — uncured theater pods (15%) | -$3.00M |
| Plus land value (10.61 acres × $5–$7/sf retail-corridor) | $2.30M – $3.24M |
| **RCN-derived ARV** | **$14.32M – $15.26M** |

The cost approach actually delivers the *highest* number because Amarillo new-build costs are high relative to special-purpose resale. Banks discount this by 30–40% when financing special-purpose properties because the cost-to-replicate doesn't equal market demand. A defensible cost-approach number after the bank's haircut: **$10.0M – $11.0M**.

Sources:
- [Texas Commercial Construction Cost 2025–2026 — Maxx Builders](https://www.maxxbuilders.com/texas-commercial-construction-cost-2025-2026/)
- [How Much Does It Cost to Build a Church in 2026 — Fellowship Development](https://www.fellowshipdevelopment.com/blog/how-much-does-it-cost-to-build-a-church/)
- [Cost to Build a Church $150–$300/sf — China Steel Build Sales](https://chinasteelbuildsales.com/cost-to-build-a-church/)
- [Construction Cost Per Square Foot in Texas 2026 — JDJ Consulting](https://jdj-consulting.com/construction-cost-per-square-foot-in-texas-the-2026-guide/)

---

## 2. Income Approach (Capitalized Value)

### Cap rate environment (TX, 2024–25)

| Asset class | Cap rate | Source |
|---|---|---|
| TX commercial broad market Q4 2025 | 7.0 – 8.0% | Terrydale Capital outlook |
| TX class B/C secondary suburban | 6.5 – 7.0%+ | SITG Capital |
| TX special-purpose religious example | 8.23% | Listed San Antonio church (LoopNet) |
| TX multi-tenant retail/event venues | 7.0 – 8.5% | Crexi/LoopNet comps |
| Special-use church (defensive bank) | 9.0 – 10.0% | Bank-conservative haircut |

**Power Church revenue plan (Layer 2 "Conservative"):** $1.2M annual gross revenue from 9 income streams.

### Operating-expense ratio

For a multi-tenant church/event/childcare/gym mixed-use building, opex ratio runs 35–45% (utilities, insurance, maintenance, custodial, basic admin — religious-use property tax exemption applies under TX Tax Code §11.20 for the worship portion only; revenue-generating square footage is taxable). Use 40% midpoint.

### NOI calculation
- Gross income: $1,200,000
- Less opex (40%): -$480,000
- **NOI: $720,000**

### Capitalized value at three cap rates

| Cap rate scenario | Implied ARV |
|---|---|
| 7.0% (aggressive — multi-tenant treatment) | **$10.29M** |
| 8.0% (mid — mixed-use blend) | **$9.00M** |
| 9.0% (defensive — special-purpose church) | **$8.00M** |
| 10.0% (worst case — pure special-use) | **$7.20M** |

**Income-approach ARV range: $7.2M – $10.3M, mid-point ~$9.0M.**

This is the approach a bank actually uses for refi underwriting on a mixed-use cash-flowing property. **Power Church's hurdle of $8.24M sits at an 8.74% cap rate** — well within defensible Texas market range, but it requires the $1.2M revenue projection to be documented (signed leases, daycare enrollment, gym memberships) before the appraiser puts pen to paper.

Sources:
- [Texas Commercial Real Estate Outlook Q4 2025 — Terrydale Capital](https://terrydalecapital.com/market-updates/texas-commercial-real-estate-q4-2025)
- [Cap Rates in Houston and Dallas: 2025 Investor's Guide — SITG Capital](https://sitgcapital.com/cap-rates-in-houston-and-dallas-2025/)
- [Texas Religious Organizations Property Tax Exemption — Freeman Law](https://freemanlaw.com/texas-religious-organizations-property-tax-exemption/)

---

## 3. Comparable Sales

### Direct comps — theater-to-church conversions (recent)

| Property | Date | Sqft | Sale price | $/sf | Source |
|---|---|---|---|---|---|
| AMC Hickory Creek 16 → Thousand Hills Church (TX, Dallas metro) | Dec 2020 | 60,000 | undisclosed (2000 build cost was $12M) | ~$200/sf build | [thousandhillspeople.org](https://thousandhillspeople.org/amplify) / [Cinema Treasures](https://cinematreasures.org/theaters/19284) |
| Cinemagic Rochester MN → Echo Church | 2022 | 44,000 | $4.9M | **$111/sf** | [Star Tribune](https://www.startribune.com/lights-camera-worship-church-buys-shuttered-rochester-movie-theater-for-5-million/601147935) |
| AMC Star Southfield → Triumph Church (MI) | May 2024 | large multiplex | undisclosed | n/a | [Detroit Metro Times](https://www.metrotimes.com/news/politics-elections/kinlochs-megachurch-bought-a-6-6m-theater-in-southfield-then-transferred-to-his-private-company-for-1/) |
| Elvis Cinemas Littleton CO → Redemption Hills Church | Apr 2026 | 34,500 | $2.8M | **$81/sf** | [BusinessDen](https://businessden.com/2026/04/02/littleton-church-buys-shuttered-movie-theater-for-3m/) |
| Westdale Theater (IA) → auction | 2018 | – | $750K | – | [Corridor Business](https://corridorbusiness.com/former-westdale-movie-theater-sold-for-750000-at-auction/) |

**Theater-to-church $/sf range: $81 – $200/sf, weighted toward $100–$130/sf for as-is acquisitions, $180–$220/sf post-renovation.**

### TX church/religious facility comps

| Source | $/sf data | Market |
|---|---|---|
| LoopNet Houston churches average | **$145/sf** | Houston (avg 21,103 sf properties) |
| LoopNet Lubbock churches average | **$75/sf** | Lubbock (smaller, similar Panhandle market) |
| LoopNet Amarillo churches | $495K – $2.95M listings, avg $1.88M | Amarillo (smaller properties) |

### Comp-derived ARV — Power Church post-renovation

If Power Church executes the renovation and the building presents as a turn-key 83,422 sf multi-use facility with 1500-seat sanctuary + 9 income streams, defensible $/sf is:

| Scenario | $/sf | Implied ARV |
|---|---|---|
| Conservative (Lubbock-style Panhandle special-use) | $90/sf | **$7.51M** |
| Mid (Houston-blended Texas religious) | $110/sf | **$9.18M** |
| Aggressive (post-reno like-new comps) | $130/sf | **$10.84M** |
| Premium (mixed-use with executed leases) | $150/sf | **$12.51M** |

**Comp-based ARV range: $7.5M – $10.8M, mid-point ~$9.2M.**

---

## 4. Tax Assessor Records (PCAD)

### Status of tax record query

The Potter-Randall Appraisal District (PRAD) public portal at [esearch.prad.org](https://esearch.prad.org/) is a React-rendered SPA — not directly scrapable via curl/WebFetch (returns the React shell, not data). The portal requires manual interactive search.

### What we know from public sources

- **APN: 216600** (confirmed Crexi)
- **PRAD reference: R005754004650** (confirmed LoopNet)
- Property is listed on PRAD rolls (2025 Certified data available)
- Owner: Regal Cinemas / Cineworld successor entity (private confirmation needed)

### Industry-standard backstop (when CAD value can't be pulled live)

Texas commercial properties are typically **assessed at 70–90% of market value** under appraisal district practice. The seller (Regal/Cineworld) has been paying property tax during the 2.5-year vacancy. Theater properties post-pandemic have seen aggressive assessment reductions — the [American Property Tax Counsel](https://www.aptcnet.com/property-tax-resources/published-property-tax-articles/pandemic-hits-movie-theater-property-values) documents 30–50% reductions for vacant cinemas.

**Estimated tax-assessed value (pre-renovation): $2.5M – $3.8M**
- This implies seller's basis is depressed; supports Angel's $4M effective negotiation.
- Post-renovation re-assessment will reset to market — but the worship-portion (40%) qualifies for **TX §11.20 religious property tax exemption**, materially reducing post-close tax burden.

### Implied market-value floor from tax record

Assessed × (1 / 0.80) = market-value implied floor:
- $2.5M / 0.80 = **$3.13M floor**
- $3.8M / 0.80 = **$4.75M floor**

This is the **pre-renovation** market floor and is consistent with the negotiated $4M effective acquisition basis. **Post-renovation ARV is not bounded by current tax assessment** — it's bounded by the cost and income approaches.

**ACTION ITEM:** Angel should pull the actual PRAD record manually at [esearch.prad.org](https://esearch.prad.org/Property/) before submission. Search address "8275 Amarillo" — takes ~2 minutes and gives the bank-defensible exact figure. Phone: (806) 358-1601.

Sources:
- [PRAD Public Portal](https://www.prad.org/)
- [PRAD eSearch Property Lookup](https://esearch.prad.org/Property/)
- [Pandemic Hits Movie Theater Property Values — APTC](https://www.aptcnet.com/property-tax-resources/published-property-tax-articles/pandemic-hits-movie-theater-property-values)
- [TX Tax Code §11.20 — Religious Organizations Exemption](https://codes.findlaw.com/tx/tax-code/tax-sect-11-20/)

---

## 5. Highest-and-Best-Use Analysis

### The "special-purpose discount" risk

A pure single-purpose church property triggers a **20–30% appraisal discount** from commercial banks because:
- Resale market is thin (limited buyer pool: only other churches)
- Bank treats it as a "single-tenant, single-credit" risk concentrated in the congregation
- FDIC and OCC examiners flag religious-only collateral as illiquid

Quote from Texas Commercial Appraisals: *"Church and religious facilities can be deemed as 'special use' properties from a commercial real estate appraisal standpoint."* — [txcommercialappraisals.com](https://txcommercialappraisals.com/church-religious-facility-appraisal/)

### Why Power Church likely escapes the special-purpose haircut

The buyer's structure deliberately avoids single-purpose treatment:
- **40% of sqft = sanctuary/worship** (33,369 sf)
- **60% of sqft = commercial revenue uses** (50,053 sf)
- Income from revenue uses is projected at 100% of operating revenue (the worship portion is donation-funded, doesn't pay rent to itself in the appraisal)

When 50%+ of building income comes from non-worship commercial leases (gym, daycare, café, conference, multi-tenant office, recording studio, banquet/event), the property reclassifies as **mixed-use special-purpose-with-commercial** and the appraiser is justified in using:

1. **Income approach as primary** (cap rate on the 60% commercial NOI)
2. **Sales comparison as secondary** (multi-tenant event/community center $/sf)
3. **Cost approach as a sanity check ceiling**

This typically reduces the special-purpose discount from 25% → **5–10%**.

### Critical underwriting condition

For the appraiser to weight the income approach heavily (which is what gets to $8.24M+), Power Church needs at appraisal time:
- **Signed leases or letters of intent** for at least 50% of revenue-generating square footage
- **Daycare licensing in process or approved** (TX Health & Human Services minimum standards)
- **Documented historical or pro-forma 6-month operating P&L** for at least 2 of the 9 streams

Without those, the bank's appraiser defaults to special-purpose treatment and the cost approach ceiling — pushing the number toward the **$7.2M – $8.0M** floor.

### Bank-specific behavior — First State Bank Spearman

First State Bank Spearman is a Texas Panhandle community bank. Community banks in the Panhandle on church/mixed-use deals typically:
- Order appraisals from local TX-licensed MAI appraisers (one of ~3 Amarillo firms)
- Weight comparable sales heavily in low-comp-volume Panhandle market
- Apply a 5–10% conservative haircut on appraised value before LTV calc
- Want to see income approach supported by signed leases, not pro forma

**Implication:** Even a $9.0M appraisal from a comp-blended approach gets haircut to ~$8.1–$8.55M for LTV math. **The deal works at appraisal $8.24M minimum, but the safety margin is thin** — Power Church should target the appraiser pulling toward $9.0M+ to leave headroom.

---

## 6. Bottom Line — Three ARV Estimates

### Summary Table

| Approach | Low ARV | Mid ARV | High ARV | What has to be true |
|---|---|---|---|---|
| **Cost (replacement)** | $10.0M | $13.0M | $15.3M | Appraiser uses RCN with standard depreciation; bank doesn't apply special-purpose haircut. Used as ceiling, rarely as primary. |
| **Income (cap rate)** | $7.2M (10% cap, defensive) | $9.0M (8% cap, mixed-use) | $10.3M (7% cap, multi-tenant retail-style) | $1.2M gross revenue documented; 40% opex assumption defensible; 50%+ commercial leases signed. |
| **Comp sales** | $7.5M ($90/sf, Panhandle special-use) | $9.2M ($110/sf, Houston-blend) | $10.8M ($130/sf, post-reno like-new) | Comparable theater-to-church and large TX religious assemblies hold $/sf assumption; renovation delivered turnkey. |
| **Tax-assessed floor** | $3.1M (current vacant) | $4.75M (current vacant) | $6.0M (post-reno reset) | Pre-renovation only; post-renovation re-assessed to market. |
| **Blended (60% income / 30% comps / 10% cost)** | **$7.5M** | **$9.1M** | **$11.0M** | Bank's most likely weighting on a mixed-use cash-flowing property. |

### Most-likely appraisal outcome by scenario

**LOW SCENARIO — $7.5M (deal fails refi)**
- Conditions: Power Church can't show signed commercial leases at appraisal time; appraiser defaults to special-purpose treatment; uses Lubbock-rate $/sf comps and 9–10% cap on undocumented pro forma.
- Probability: 25%
- Outcome: Refi at $7.5M × 75% = $5.63M proceeds. Short by $550K against $6.18M target. Deal needs cash injection or seller-carry extension.

**MID SCENARIO — $9.0M – $9.2M (deal works comfortably)**
- Conditions: Power Church has 3–5 signed commercial leases (gym + daycare + 2 office tenants minimum), 6 months of operating revenue showing, weddings/events booked through end of year 2.
- Probability: 50%
- Outcome: Refi at $9.0M × 75% = $6.75M. Clears $6.18M target with $570K cushion. **This is the realistic base case.**

**HIGH SCENARIO — $10.5M – $11.0M (deal banks easily, equity participation upside)**
- Conditions: All 9 revenue streams operational; weddings booked 12+ months out; daycare at capacity; recording studio with name-talent client; multi-tenant office >85% leased; mixed-use treatment fully embraced by appraiser.
- Probability: 25%
- Outcome: Refi at $10.75M × 75% = $8.06M. Massive cushion; potentially supports cash-out refinance at higher LTV.

### Which approach the bank will use

**First State Bank Spearman, on a mixed-use church-plus-revenue building, will weight:**
1. **Income approach: 50–60%** (this is the bank's preferred method for cash-flowing commercial property)
2. **Sales comparison: 30–40%** (limited Panhandle comps make this secondary but important)
3. **Cost approach: 10–15%** (used as a ceiling sanity check, not a primary driver)

The actual appraisal number will track most closely to the **income approach**, which means **the $1.2M gross revenue projection has to be defensibly documented at appraisal time** — preferably with at least 6 months of actual operating data showing the model works.

---

## Recommended ARV estimate range for the modeler: **$7.5M to $11.0M, with high probability landing at $9.1M.**

**Single-number planning value: $9.1M.** This represents:
- 60% weight to income approach at 8.0% cap on $720K NOI = $9.0M
- 30% weight to comp sales at $110/sf Texas religious-mixed-use = $9.2M
- 10% weight to cost approach with bank haircut = $10.0M

At $9.1M ARV × 75% LTV = **$6.83M refi proceeds**, which clears the $6.18M payoff target with **$650K of cushion** — enough to absorb appraisal volatility, closing costs, and 1–2 quarters of operating capex without breaking the deal.

**Critical execution dependencies for hitting $9.1M:**
1. Sign ≥50% of commercial-use square footage to leases or LOIs before month 11.
2. Get 6 months of P&L showing the income model works before the appraiser walks the building.
3. Use a local TX-Panhandle MAI appraiser who has done church-mixed-use work before — ask First State Bank Spearman for their preferred appraiser list and influence the selection.
4. Document the renovation receipts ($2M actual capital deployed) and present as a labeled improvement schedule by use type.

If any of those four legs is missing at appraisal time, the number drops toward the LOW scenario ($7.5M) and the deal needs structural rescue (bridge loan extension, equity injection, seller carryback).