COUNCIL AGENDA ITEM
SUBJECT: YMCA Operational Plan
DEPARTMENT: Administration
SUMMARY: The Edgewater branch of the YMCA has suffered severely reduced revenues during calendar year 2020 due to COVID - 19 to the point their administration may be forced to close operations. In an attempt to keep this course of action from occurring, their management is proposing changes they believe are a sound way of keeping operations in Edgewater going and the building open.
Among other things they want to try is moving to a 24 hour, seven day a week operation (24/7) to compete with all other gyms in the area. At their expense, they are willing to install a new card lock system for the exterior doors and a surveillance camera system for patron safety. This change is planned to begin on September 1, 2020.
They also want to institute a new monthly membership program whereby patrons can use the wellness room (gym/weights) room for a flat monthly fee of $10; again, to compete with all other gyms in the area. Management estimates 80% of their current $30 per month members will enroll in the new $10 per month plan, which will result in a loss of revenue equal to $24,384 annually or $2,032 monthly. They are hopeful the new programing will assist in recruitment of new members to make up the difference. In this scenario they would need 203 new memberships to make up the shortfall.
While at the time of this writing they are current with rent payments owed to the City, they are requesting consideration of reimbursement of two months paid rent for 2020 (representative of the two months they were required to be closed), or a total of $7,558.34 to assist with anticipated shortfalls during fiscal year 2021. They are also requesting a monthly reduction in rent for all 12 months of fiscal year 2021 of $2,000 or $24,000 total or until their operations return to breakeven or better. City staff cannot support this recommendation because the length of the requested forbearance is vague where it should be definitive.
Overall, City staff is supportive of the YMCA’s suggestions and intent because the organization fills a huge void. Right now Edgewater cannot afford to offer amenities like afterschool child care, operation of a gymnasium, a wellness center and all of the other services now offered by them. In essence, the YMCA is Edgewater’s outsourced Recreation Department and they are willing to make necessary adjustments to their operational platform to continue providing these services to Edgewater citizens.
BUDGETED ITEM: NO
BUDGET AMENDMENT REQUIRED: NO
RECOMMENDED ACTION: Make and motion for the following:
Direct staff to offer a modified lease agreement to the Edgewater branch of the YMCA for the remainder of the lease term (due to terminate on March 1, 2024). Modifications are suggested to include:
1. A clause for refunding and forbearance of two (2) months of paid lease agreements during fiscal year 2020,
2. A clause for forbearance of a total of $24,000 of lease payments, which is intended to equal $2,000 per month beginning October 1, 2020 through September 30, 2021,
3. A clause extending the current lease by 14 months whereby all amounts suggesting to be forborne are paid during the extension.
NOTES:
1. The current monthly lease payment is $3,779.17,
2. An extension by 14 months of the current lease would cause the lease to terminate April 30, 2025.