Council to consider lease agreement to keep YMCA operational
$505K requested for capital upgrades
City council is expected to approve a three-prong plan Monday that will allow the Sault Ste. Marie YMCA to continue its operations.
A yet-to-be-named charitable organization will purchase the McNabb Street property for $2 million.
The City of Sault Ste. Marie will sign a lease agreement with the building purchaser to provide a guarantee for lease payments. The city will also enter into a sub-lease agreement with the YMCA, which will be responsible for making the lease payments to the city.
“The lease payments are significantly reduced from the previous mortgage payments of the YMCA due to the financial terms offered by the organization,” the report to council reads.
City council is also being asked to provide $505,000 to the YMCA for capital upgrades. An application to the Northern Ontario Heritage Fund Corp., has been submitted for $495,000. The money will be used for about $1 million of capital upgrades to the existing building.
“Any repairs made to the building will be to minimize investment and examine opportunities to relocate equipment to a new facility in the future (should a new facility prove feasible),” the report states.
The YMCA was exempt from property taxation due to provincial legislation and city council must also agree to ensure the tax exemption continues once the new organization becomes the landowner.
“The organization is purchasing the building as a community investment, not a real estate investment,” CAO Tom Vair states.
Lease payments of five per cent per year ($100,000) would be paid by the YMCA and backstopped by the city for the term of the lease, which remains to be negotiated in full. The lease agreement offers significant savings to the YMCA from existing mortgage payments.
The agreement would see a Memorandum of Understanding on governance and leadership of the Sault YMCA operations are regular communication between city staff and the YMCA.
The memorandum will also include requirements to participate on the YMCA board.
“Should the YMCA begin to encounter financial difficulties, the city will seek the ability to intervene and appoint a new board of directors and take other steps to ensure operations can be sustained and maintained.”
The community will also have its role to play if the plan is to be successful.
The YMCA needs to increase its membership to 4,500 within the next 60 days. Membership numbers are currently hovering around 3,000.
“Membership numbers need to return to previous levels to provide a sustainable operating model for the organization.”
In mid-April it was announced that the YMCA was putting its McNabb Street property on the selling block and winding down its operations due to its bleak financial situation.
The YMCA blamed increasing operational costs on an old facility, coupled with inflation and a slow return to pre-COVID level memberships.
The announcement came as a blow to the community, and a local group was formed to lobby decision-makers to save the important community facility.
It's now expected that the Sault YMCA will also begin work on a longer-term solution that will see it enter into an agreement with a larger, regional YMCA that will provide experienced executive leadership, including CEO oversight, finance and human resources.
The regional model has been successful in other YMCA locations in Ontario and across Canada.
The near future will also see planning to determine the future facility requirements and whether a significant refurbishment or a new building is the best option. The final decision will result in a significant capital fundraising campaign.
The YMCA provides employment, recreational and day-care services for the community.
It offers swim lesson programming, provides opportunities for disadvantaged youth, health and fitness services and programming and partners with other organizations, including the Indigenous Friendship Centre, Community Living Algoma, Ken Brown Home, Adult Enrichment Centre and Group Health Centre's cardiac rehabilitation program.
The Sault YMCA provides 77 full-time and 42 part-time daycare spots at the McNabb Street location.
Monday's council meeting begins at 5 p.m.