The west suburban church pastor who formerly owned Community Bank of Lawndale had an otherwise impressive business record prior to the West Side bank’s recent failure.
Rev. Bill Winston, pastor of Living Word Christian Center in Forest Park, bought the bank in 2008. It was Winston’s financial successes up to that point that helped secure the deal to buy the bank, located at Homan near Roosevelt in North Lawndale. Federal regulators seized the 36-year-old bank on Feb. 15, its assets later sold to New Orleans-based Liberty Bank and Trust Co., a black-owned institution.
The Lawndale bank has reopened as a branch of Liberty Bank, also taking the name of its new parent company. Winston renamed it Covenant Bank when he bought it in ’08.
The Forest Park pastor had a 13-year track record in Forest Park and elsewhere of successful business dealings up to that point. Part of that success involved the turnaround of the Forest Park Mall.
When Winston purchased the mall in 1998, it was mostly empty and considered an economic blight in the west suburban village.
The mall was lined with vacant stores — a movie-theater had just moved out.
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. Its anchor tenants are Ultra Foods and Kmart. Winston’s Living Word mega-church is located in the rear of the mall, which underwent a $13 million repurposing.
The worship center—created from the skeleton of the old movie theater— has 3,500 seats. The church currently has 17,000 members.
Living Word also opened the Joseph Business School in the basement of the mall, which features a computer lab, office spaces and conference rooms. Winston’s success with the mall is tied to an agreement he made with the Village of Forest Park.
In 2004, the village crafted an 11-year agreement with Winston. Forest Park would pay half of all sales tax revenue generated by new mall’s tenants 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 more than $4.2 million to Living Word. Of that, roughly $2.3 million was from sales tax rebates and about $1.1 million came from TIF funds, which must be used for infrastructure, McKenna explained. Living Word paid $4.9 million to contractors between 2004-0009 to remodel the mall.
As pastor of Living Word, Winston controls both tax-exempt and tax-paying entities in the same parcel. Forest Park 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.
He bought 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 a roughly $300,000 payment from the village of Forest Park via the development agreement.
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. All of Winston’s shares, along with common-stock shares owned by 3,002 investors were wiped out on Feb. 15.
Winston has declined to be interviewed about the bank.
But Living Word spokesperson Kim Clay said the Forest Park Mall was not affected by the loss of the $350,000 investment in Covenant Bank.