Updated: Property owned by Living Word Christian Center has gone into foreclosure, according to the Hennepin County Sheriff’s office. On July 28, four parcels of land owned by the Brooklyn Park mega-church was bought at a sheriff’s sale for $5.1 million. Pastor Mac Hammond, who preaches a “prosperity gospel,” has been plagued by financial problems over the last few years. The church took millions from a man who was later convicted of fraud, and the IRS opened an investigation into the church’s finances stemming from favorable financial dealings between the church and Hammond.
County records show that TCF National Bank, which is also the mortgage lender to LWCC, bought the property. Per Minnesota law, Living Word has until July 28, 2011, to redeem the property by securing new financing. The church bought property in 1995 for $3.5 million. It’s unclear from county records whether the foreclosed property is the land on which the church itself sits; Living Word has not responded to the Minnesota Independent’s request for comment on the foreclosure or the church’s financial future.
Update: LWCC told the Minnesota Independent on Tuesday that they sold the property in 2006 and that Hennepin County records are misleading. Said Amy Rotenberg, “Living Word Christian Center actually sold that property to another entity and has had no continuing interest in it since 2006.” We’ll update this story should those records be modified.
In early 2008, the church began to fall behind on its budget by $40,000 to $70,000, prompting Hammond to sell off his jet and forcing the church to cut its hour-long television broadcast to a half hour.
Living Word says it has “no interest” in foreclosure property
Despite being named by the Hennepin County Sheriff’s Office, Living Word Christian Center, though public relations firm Rotenberg Associates LLC, says that the church did not own property listed as being sold in a sheriff’s foreclosure sale on July 28.
“Unfortunately you didn’t have information before you went to press with your story which is important,” said Amy Rotenberg on Tuesday. “Living Word Christian Center actually sold that property to another entity and has had no continuing interest in it since 2006.”
She said that TCF Bank had released LWCC from the mortgage at that time.
The Minnesota Independent checked with Hennepin County officials on Monday for information about the sheriff’s office foreclosure notice, which lists LWCC as the holder of the defaulted mortgage.
Lisa Kiava, public information office for the sheriff’s office, said, “The document listed online is the extent of the information that the sheriff’s office has. We don’t have any addition information than what you see online.”
Rotenberg passed along a document dated June 15, 2010 (PDF), that describes a transaction in 2005 with HMW-Brooklyn LLC.
She told CityPages this morning that the Hennepin County listing was “misleading.”
In May, the church was served with papers demanding the return of $2.2 million in money it received from Gerard Cellette, who had been convicted of fraud. Cellette ran a Ponzi scheme and lawyers for the victims were attempting to collect the money from Living Word for remuneration.
The church said in a statement in May that it felt it shouldn’t have to give the money back to the victims because of its status as a church. “This lawsuit, on behalf of Mr. Cellette’s investors, to take back the funds from LWCC and repay the investors is unfair. Our church is essentially being asked to be the guarantor to principally out-of-state, sophisticated investors that made bad investments with Mr. Cellette.”
It’s not the first time the church has invoked religious privilege following questions about its finances.
In 2007, the Minnesota Independent reported that Living Word had arranged favorable loans for Hammond and that Hammond had bought a stunt plane from the church and then leased it back to the church. That reporting led to an IRS investigation, and in 2008 the church sued to block the IRS from investigating.
The IRS wanted a look at Hammond’s and Living Word’s financial books, but Hammond invoked religious privilege.
“This case is about the First Amendment, the free exercise of religion and separation of church and state,” Walter Pickhardt, attorney for the church, said at the time. “Living Word did cooperate but the IRS didn’t follow correct procedures. It was an overbroad request.”
A judge ruled that the IRS did not follow the proper procedures in its investigation and the agency dropped its investigation.
In 2006, the church gained notoriety when Hammond took to the pulpit to endorse Rep. Michele Bachmann for her first election to Congress. Hammond’s backing prompted complaints to the IRS and raised eyebrows, since Hammond didn’t live in Bachmann’s district.
Hammond’s financial troubles come after years of financial growth for the church and for Hammond personally. The “prosperity gospel” Hammond preaches asserts that financial gain is a sign of God’s love. The church has several prayers about becoming debt-free.
“We, the body of Believers of Living Word Christian Center, declare we have been carved out for an end-time expression of El Shaddai, the God of abundance and no lack,” reads one such prayer on the church’s website. “We are taught how to live independent of this world system and how to have dominion over it, therefore, in Jesus’ name, we declare we are debt-free! The spirit of debt is destroyed over our lives and over this local church because of the anointing. We are the lender and not the borrower, the head and not the tail.”
Hammond isn’t the only prosperity preacher to have faced money troubles. As Christianity Today reporter Bobby Ross, Jr., notes, more than a few such figures are now struggling financially.