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Christmas Miracle for Construction: New Churches Rising

It's been a rough year for commercial contractors. Unless they've made a "niche" business in churches.

"Looking forward to 2011, we are forecasting to have our best year yet," says Ryan Regina of BIG SKY Enterprises, a developer in N.J.

Regina says seven years ago, 25 percent of BIG SKY's projects was building churches. Now it's 80 percent. "What we see in various builders' magazines, there seems to be a steady increase in church construction."

San Miguel Archangel Catholic Church, in Texas. Photo by Cindeka Nealy/Reporter-Telegram.
Source: mywesttexas.com
San Miguel Archangel Catholic Church, in Texas. Photo by Cindeka Nealy/Reporter-Telegram.

One church he's building is a brand new complex for Victory in Christ Christian Center in Deptford, N.J. "We are building a new church from the ground up," says Pastor John Edmondson, who started the church ten years ago with 11 people.

"It's costing us $4.3 million for what we're doing," he says. "Phase One will allow us to build a 500-seat auditorium, and Phase Two will add more classrooms and a larger sanctuary that would allow us to build a 1,200 to 1,500-seat auditorium."

It's hard to say if there's a church building boom on a national level or if, like all real estate, it's location, location, location. Some areas are prospering from growing attendance and growing revenues in the recession, while other churches shrink with the economy.

"Overall we are seeing a difficult economy for congregations, but it is really to be expected as this is the pattern for churches in multi-year recessions," says Phill Martin of the National Association of Church Business Administration. "The last year is always the hardest."

That is not the case in the middle of west Texas. The Catholic diocese in San Angelo is in the middle of a building boom, with 17 different construction projects.

"I've never had so many building projects going on at once," says Bishop Mike Pfeifer. Last Sunday he dedicated the new, $4.2 million San Miguel Arcangel Catholic Church in Midland, able to seat 1,100.

The old church could only accommodate 300. "Normally it takes 30 years to pay off a church," says Deacon Mike LaMonica. "We raised almost 75 percent of the funds needed in the bank before the church was dedicated, which is a miracle as far as I'm concerned."

Churches are able to take advantage of lower labor costs, faster permitting in a recession, and low interest rates ("Thank God," says Bishop Pfeifer). But church leaders also credit the recession with forcing some people to reexamine their priorities.

"People are looking for meaning in their life," says the Bishop. "They want to feel connected, they want to feel loved, they want to feel accepted."

Watch Jane's TV report about the church construction boom today on "Closing Bell" at 4pm ET on CNBC. And, check out Jane's "Funny Business" blog.

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  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.