By Jean Lotus
Rev. Bill Winston, Forest Park mega-church pastor and CEO of the recently failed Covenant Bank, had a 13-year track record in Forest Park and elsewhere until the bank was seized by regulators on Feb. 15.
It was Winston's financial success that helped him raise capital to buy the bank in 2008. Part of that success involved the turnaround of the Forest Park Mall.
When Winston purchased the Forest Park Village Center mall in 1998, it was mostly empty and considered an economic blight by the village. The mall was lined with vacant stores, a movie-theater had just moved out, and the property was viewed as an economic white elephant. Then-Forest Park Mayor Lorraine Popelka cited a vacancy rate of 90 percent in Chicago Tribune accounts of the sale.
Winston and Living Word Christian Church bought the mall property from the Illinois Teachers Retirement System, taking out a mortgage for $13.2 million.
Since then, the 33-acre mall was transformed from an indoor to an outdoor shopping plaza with anchor tenants Ultra Foods and Kmart and smaller businesses between. In the back section of the mall is Winston's Living Word Christian Church, which underwent a $13 million repurposing.
The worship center was created from the skeleton of the old movie theater into a 3,500-seat space designed by Chicago architects Teng and Associates. The church opened the Joseph Business School in the basement of the mall, which features a computer lab, office spaces and conference rooms.
Part of Winston's — and the mall's — success resulted from a development agreement with the village of Forest Park.
In 2004, the village crafted an 11-year agreement that would pay half of all sales tax revenue generated by new mall businesses to Winston's Living Word Christian Center.
This agreement covers a rebate in sales taxes "from everything but Kmart," said Phil McKenna, of Kane-McKenna consultants, the firm that oversees the village's development agreements.
The deal expires in 2015 or after the village's payments reach $4.9 million, whichever comes first. Along with the sales tax rebate, Living Word receives half the revenue generated by the Roosevelt-Hannah Tax Increment Finance (TIF) fund.
Between 2004 and 2011, Forest Park paid $4,258,354.52 to Living Word. Of that, $2,308,541.07 was from sales tax rebates and $1,154,270.54 came from TIF funds, which must be used for infrastructure, McKenna said. Living Word paid $4.9 million to contractors between 2004- 2009 to remodel the mall.
As pastor of Living Word, Winston controls both tax-exempt and tax-paying entities in the same parcel. The village makes payments to tax-exempt Living Word and a for-profit affiliate called City Services Inc., which is also registered to Winston.
As Covenant Bank was warned by federal regulators in spring 2011 that they needed to raise capital or be closed, Winston began to invest in the bank by buying preferred stocks in units of $25,000 from the bank's holding company, Covenant Bancshares Inc.
The first block of 14 shares, worth $350,000, was purchased by Forest Park Plaza LLC. The mall's company bought the shares on April 29, 2011, four days after Living Word received the village of Forest Park's development agreement payment of $310,124.08.
Winston went on to invest a total of $1.7 million of his own money, and money from interests he controlled, in the bank's holding company over the next year. But the bank was seized and its assets sold to Liberty Bank and Trust of New Orleans. All of Winston's shares, along with common-stock shares owned by 3,002 investors were wiped out on Feb. 15 of this year.
Winston has declined to be interviewed by Forest Park Review. But Kim Clay, Living Word spokeswoman said the Forest Park Mall was not affected by the loss of the $350,000 investment in Covenant Bank.
"The mall is doing fine," she said in March. "The closing of Covenant Bank has had no adverse effect on the mall," she said.
Winston, a former U.S. Air Force pilot and IBM salesman, lives in Westchester. He owns a second mall in Tuskegee, Ala. He also owns an aviation company and air strip in Tuskegee, which he is in the process of remodeling. He is said to own more than one jet.
According to accounts, Winston started Living Word with $150 and 20 members in a Chicago storefront. The church now has more than 17,000 members.