Settlement proposed for YMCA Downtown

The YMCA of Greater Pittsburgh has reached a proposed settlement with its landlord at the Downtown Y over a lease that resulted in the YMCA filing for bankruptcy protection last month.

The proposal calls for the YMCA to pay the landlord, Millcraft Industries, more than $2.75 million over the next four years while both seek a new fitness center operator for the facility on Fifth Avenue, according to documents filed in U.S. Bankruptcy Court.

A hearing is scheduled Tuesday in federal bankruptcy court in Erie, during which the YMCA will seek approval of the plan.

The YMCA filed for Chapter 11 bankruptcy protection May 8, citing the lease at its Downtown Y as a primary issue why the nonprofit is struggling with an annual deficit of $1 million.

The Downtown Y, located

ed near Market Square, closed Friday, and the nonprofit and Millcraft have been attempting to mediate a settlement after the YMCA filed a motion to reject its lease.

A filing detailing the settlement said the YMCA and Millcraft have resolved their dispute and that the YMCA will continue to pay monthly rent of about $100,000 through September.

After that, the lease will be “rejected” and the YMCA will pay Millcraft a claim of $2.35 million plus interest over 44 months.

As part of the deal, Millcraft will hold a mortgage on the YMCA in Homewood-Brushton and a first lien on future mineral rights at the YMCA’s Camp Kon-O-Kwee Spencer in Butler County.

Between now and Sept. 1, both parties will try to find a new operator for the Downtown Y, which has approximately 2,000 members.

U.S. Bankruptcy Judge Thomas P. Agresti ordered thetalks between the YMCA and Millcraft. In court documents, the YMCA called the Downtown fitness center “an inappropriate drain” on itsresources.