Thanks to a slick real estate broker, a network of churches in Northern Colorado is embracing blockchain technology to securitize their sanctuary. Pray for its investors.

_{By Nina Bambysheva, Forbes Staff}

In the Middle Ages, the Church held sway over souls with the sale of indulgences—essentially, money in the form of silver or gold coins exchanged for a faster ticket out of purgatory. Fast forward to the 21st century in Northern Colorado, where a different kind of church token is being offered—one that doesn’t promise salvation but instead aims to purchase Fort Collins’ oldest church.

Move over, GoFundMe. Enter a modern twist on community investment, led by local pastor named Blake Bush, who is spearheading an effort to raise $2.5 million for the purchase of the Old Stone Church, a historic 19th-century stone building his community has been renting for the past two years.

Bush, 57, is no ordinary clergyman. A former franchise salesman and a veteran of 34 years in ministry, he and his wife founded the non-denominational Third Day Church and later established One Hope of Northern Colorado, a nonprofit ministry leading the Colorado House of Prayer. “We’re not a church,” Bush explains. “We are the church, a network of churches working together to bless our community.” The Colorado House of Prayer, currently housed in the Old Stone Church, is a place where volunteers run the show, and anyone can lead a prayer at nearly any hour. Multiple denominations currently rent the space. For example, every Sunday at 2:30 p.m. the Korean High Mountain Church holds a service.

In the summer of 2022, Pastor Bush fell down the crypto rabbit hole when a friend introduced him to XRP cryptocurrency. Ripple Labs, the company that developed the token, once promised that its digital ledger would replace banks in facilitating trillions in global money transfers, but despite XRP being valued at $31 billion by crypto traders, Ripple has accomplished little in the last decade. Intrigued, Bush bought some XRP and soon found himself immersed in the possibilities of blockchain. “I just began to research and listen, trying to figure out what they’re doing, [Ripple’s] lawsuit with the SEC… who’s the SEC, what do they do, and what does blockchain accomplish? Where is this thing going?” He says the idea of tokenizing real estate “entered his thoughts” in February.

“I heard the Lord say ‘’tokenize the building,’”says Bush. “I was like, what? I didn’t even know what that meant. I’ve been interested in the technology, but I could not have formed that sentence because that’s just not in my vocabulary. I’ve been praying for this for years, and God said, ‘Son, go get my house.’”

Enter REtokens of Spokane, Washington, founded in 2022 by Tyler Vinson, 45, whose real estate brokerage firm Extant shares headquarters with the digital asset operation. Vinson, a local realtor who got his BA in Marketing from Eastern Washington University, boasts more than 20 years of experience and is the author of “Freedom Through Cash Flow.” Tokenizing properties like Bush’s Old Stone Church may be just the gimmick needed to inject new life into Vinson’s Spokane Valley real estate practice.

In late May 2024, REtokens and a Swiss-based private blockchain operator Polymesh announced that they would jointly tokenize $30 million in real estate, “delivering enhanced liquidity and a wider pool of investors to the real estate market.” Not mentioned in the press release was the pair’s only other asset tokenization—a $2.25 million preferred stock offering in August 2023 for REtokens itself. According to the private placement memorandum available to accredited investors, more than $150,000 of the proceeds would go toward paying off a loan to Vinson’s Extant, and ReToken’s payroll, which includes Vinson as CEO, would eat up nearly 24% of the funds annually. When you throw in marketing costs, blockchain fees and convention/travel expenses, “corporate costs” were projected to eat up to 40% of the tokenization proceeds in year one.

While there are no specifics in the offering statement about how investors will actually earn a return from their blockchain-based investment in REtokens, the shares were initially priced at 75 cents each, with a minimum investment of $5,000. Vinson’s new blockchain company intends to take $10,000 upfront for new tokenizations, plus up to 0.74% per year in an “equity fee” from new tokens minted. So far, REtokens has raised less than half of the $2.25 million in tokenized preferred stock it began offering a year ago.

Blake Bush’s Old Stone Church is Vinson’s first real estate tokenization. The first phase, launched on Friday, targets accredited investors with a minimum of $50,000 to invest, and is seeking to raise $2.5 million within the first year to buy the 11,457-square-foot stone building. The Old Stone Church is currently owned by one of Blake’s parishioners, Warren Yoder, owner of a Chevrolet dealership and auto body operations in Northern Colorado, who bought it in 2022 for $2.2 million.

Eventually, the Stone tokens will become available on the secondary market, presumably to non-accredited church congregants at $500 per token, with a minimum investment of $1,500. These tokens will trade indefinitely, or as the initiative’s website puts it, “until Jesus returns or the majority of investors and the board decide to sell.” Already, several locals have joined Old Stone’s board including the mayor of nearby Severance, Colorado, a mortgage broker and an insurance salesman.

Potential investors don’t need a special crypto wallet; instead they will have to create an account with REtokens and complete a know-your-customer process, much like buying stocks on Fidelity, says REtokens’ Vinson. In fact, purchasers are buying securities, not cryptos. The tokens won’t be traded on exchanges like Coinbase or Binance but only marketable through REtokens. And since the small offering falls under regulation D of the Securities Act of 1933, Old Stone Church will be exempt from most disclosure requirements. Tokenholders won’t get a say in how the church is managed, either.

When Bush was asked the consequences of, say, a Satanist scooping up the majority of tokens, his response was, “I’d be like ‘great, thank you, let’s introduce you to Jesus.’” The Old Stone Church will be governed by its board and an operating agreement, he explains, so even a majority owner won’t be able to decide how to use the building. Tokenholders will only be able to vote for a president of the board and for or against the sale of the building.

Unlike traditional church and synagogue fundraisings, offered by not-for-profits and therefore tax-exempt, congregants wishing to “invest” in their church will not be getting any tax deductions. Tokenholders will be subject to normal income and capital gains taxes, which will come in the form of K-1 partnership distributions. “Even Jesus had to pay taxes and have a treasury,” says Bush.

As for returns, the pitch deck projects “a 2-3% yearly increase on each token in accordance with the rise in real estate value in downtown Fort Collins. In addition, each year, there will also be a small dividend based on the modest rent the LLC receives.” Pastor Bush is serious about managing investor expectations. “You’re not in this to make profits. You’re in this to do good in the community,” he says. The pitch deck notes that investors will be using their money to “advance the kingdom.”

The Old Stone Church is the first tokenized church, according to Graeme Moore, head of tokenization at Polymesh, but it may not be the last. Mark Elsdon, a minister and developer from Madison, Wisconsin, and author of Gone for Good?, writes that as many as 100,000 Christian church properties—a quarter to a third of all churches in the U.S.—are expected to be sold or repurposed in the next decade.

Already, hundreds of these properties are being acquired by businesses for use as offices, restaurants, co-working spaces, and hotels. New Yorkers may recall the 1983 transformation of the Gothic Revival-style Episcopal Church of the Holy Communion, built in 1844, into the Limelight nightclub, notorious for its drug-fueled parties. A more recent example is the Good Shepherd Lutheran Church on Lake Opeka in Des Plaines, Illinois, reborn as an upscale Mediterranean restaurant.

Pastor Bush’s vision stretches far beyond Fort Collins. He dreams of forming a foundation to help others tokenize their historic buildings. He may be onto something. Considering each communities’ zealotry, religion and blockchain may be a match made in heaven.

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