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Exh 3BAGENDA ITEM #3B FEBRUARY 26, 2001 CITY OF ATLANTIC BEACH CITY COMMISSION MEETING STAFF REPORT AGENDA ITEM: Report on feasibility of acquiring the property at 725 Atlantic Boulevazd (Pic-N-Save) and forming a partnership with YMCA for operation of a communityn SUBMITTED BY: Jim Hanson, City DATE: February 15, 2001 CHARGE: The resolution adopted by the City Commission at the regular meeting of January 22, 2001 directed staff to "investigate the feasibility of acquiring the property at 725 Atlantic Boulevazd and present their findings to the City Commission for consideration." Prior to the adoption of the resolution, staff members from the Winston YMCA in Ponte Vedra made a presentation and Commissioner Waters explained his proposal to establish a partnership with the YMCA for operation of a community center at the Pic-N-Save site. FINDINGS: PIC-N-SAVE Building at 725 Atlantic Boulevard; An inspection of the Pic-N-Saue Building has revealed several deficiencies. The HVAC, electrical, plumbing and roof are inadequate in that the building has been vacant for over four yeazs with no service to any of the systems. The roof is leaking in several locations and the facade at the front entrance has been leaking. The renovation of this structure to meet current codes would likely exceed the cost of building a new structure. The cost of new structures (stores) in our area is approximately $55.12 per squaze foot. However, the cost for construction of a new YMCA facility would be much more because of the special features (gymnasium floor) and equipment. YMCA; The Young Mens Christian Association (YMCA) is a charitable, not for profit corporation established under Federal SOlc3 guidelines. The national organization is over 150 yeazs old. Each YMCA region is atominous and pays dues to the national organization. The regional organization that serves the Jacksonville azea is the "YMCA of Florida's First Coast" which is governed by a local Metro Board. There are currently 1fi YMCA facilities in the First Coast region. AGENDA ITEM #3B FEBRUARY 26, 2001 The Winston YMCA in Ponte Vedra is one of their newest facilities. David 7ezek and Teresa Rogers are the managers. They have both been very professional, helpful and interested in working with Atlantic Beach to establish a YMCA here. They have been familiaz with the needs of the area because of the portable building in Russell Park, where YMCA programs were offered in the past. Any decision to establish a YMCA in the Atlantic Beach azea would be made by the Metro Board, and the Winston managers have made the regional CEO Trigg Wilkes aware of our ongoing discussions. The Winston YMCA in Ponte Vedra was completed in June 1999 at a cost of 3.1 million dollars including land. Since then, a outside pool has been added for an additional $850,000. The land cost for the Winston YMCA was under $100,000. Indoor facilities total approximately 30,000 squaze feet and include a full size basketball court, wellness center (with weight machines, treadrnilis, etc), spinning room, special needs locker rooms, conference room, multi-purpose/aerobics rooms, a nursery (Kidzone), a teen room, mens and womens locker rooms and administrative offices. A loan was taken out by the YMCA for construction of the Ponte Vedra facility with debt service budgeted at sightly aver $300,000 per yeaz. This construction loan covered a majority of the 3.1 million dollaz cost. Private contributions were also obtained to cover the remaining costs of the Ponte Vedra facility. Campaigns to raise private capital are common for new YMCAs. The operating costs of the Winston YMCA, along with the debt service is paid mostly by membership dues from individuals and families. A flyer entitled "Winston Fanuly YMCA Membership Rates" is attached. It is common for the YMCA regional organization to conduct feasibility studies prior to deciding to establish new facilities. The YMCA has provided the City with a copy of a recent study done in the 7ululgton Creek azea which includes many important components needed to determine feasibility in a specific local market. It includes a survey of azea residents as to their desire to join the YMCA with specific questions as to various programs (swimming workout equipment, spinning, sports leagues, wellness programs, day camps, etc). That information, combined with local census data; is the basis for a projection of anticipated membership. AGENDA ITEM #3B FEBRUARY 26, 2001 From this projection, an estimate of revenues and operating costs can be established. The Julington Creek feasibility analysis also considered different locations in the area to determine the suitability of each for the largest number of potential membets. Existing Private Providers; Both Atlantic Beach and the YMCA have already been contacted by representatives of local private facilities that view a tax exempt YMCA as unfair competition. Several other providers of similar health related facilities exist in the Atlantic Beach azea and can be expected to express concern over possible loss of customers if a YMCA were built in our area. Staff from the YMCA have indicated that opposition from private providers is common when new locations are considered. The question of public interest comes down to whether or not the existing private companies presently provide or will provide the range of family related programs that is typically available from a full service YMCA center. News stories to date have generated a considerable amount of public input in At]antic Beach, both for and against acquisition of the Pic-N-Save property. Those opposed have generally expressed a concern over the high cost and affordability. Those in favor have mostly focused on having facilities that do not presently exist available for community activities. POSSIBLE COST OF COMMUNITY CENTER IN ATLANTIC BEACH: The asking price for the Pic-N-Save building is 2.5 million dollars. The construction cost of the YMCA (including pool) was just under 4 million dollazs. Thus, a `worst case" scenario for construction of a community center in Atlantic Beach. would be 6.5 million dollars. However, a number of factors could decrease this cost. If any portion of the existing Pic-N-Sane building could be used instead of total demolition, costs may come down. Also, safe of some of the property fronting on Atlantic Boulevard could have the effect of lowering the total cost and the asking price for the Pic-N-Save property maybe negotiable.. One additional cost not included above is for demolition of the existing building. DISCUSSION: Atlantic Beach alone could not afford to purchase the Pic-N- Save property and construct a new community center in its place. It has been suggested that a portion of the funds anticipated from the additional''/Z sales tax from the Better Jacksonville Plan could be used for this purpose. While it is a AGENDA ITEM #3B I'EBRUARY 26, 2001 legal expenditure of the funds, the anticipated $500,000 per year to be received by Atlantic Beach would not cover the debt service needed for this project. If bonds were issued for a period of ten years with an interest rate of 5 percent, the $500,000 per yeaz revenues would only equate to less than 4 million dollazs in bonds. However, while the City of Atlantic Beach alone may not be financially able to shoulder the burden, it may be possible to utilize a combination of funding sources. These sources may include the issuance of debt by the YMCA, a local campaign could be conducted to raise capital funds from private sources, the cost of acquisition for the Pic-N-Save property could be negotiated down, other municipal or county sources maybe willing to contribute funds and state/federal grants should also be considered. Regazdless of how capital funding could be obtained, the YMCA appears to have in place a good management structure to operate a facility in Atlantic Beach. Career managers from YMCAs across the country could be recruited to manage a new Atlantic Beach facility. It would be much more difficult for the City of Atlantic Beach to manage a community center providing these types of services, although it is possible. The next logical step in determining whether or not to build a new community center in the Atlantic Beach area would be to assess a number of critical questions with specific business related answers. Is the Atlantic Beach area adequately served at the present time by the types of programs that a YMCA would provide? These services would include not only the availability of fitness equipment and a pool, but also more family oriented programs such as a teen center and athletic leagues. What will the needs of the area be 5 and 10 yeazs from now? If the azea needs are not presently being met or will not be met in the future, is the gap lazge enough to support a YMCA? More specifically, would there be enough families and individuals who would be willing to pay membership fees to off set the operating costs for a new facility? Further, would the revenues anticipated be high enough to also cover debt service for some or all of the capital costs of such a facility? RECOMMENDATION: If the City Commission chooses to proceed with the investigation of the possible purchase of the Pic-N-Save AGENDA ITEM #3B FEBRUARY 26, 2001 property and/or the establishment of a YMCA in the Atlantic Beach area, the next step is for the City Commission to get a feasibility study much like the one done by the YMCA in the Julington Creek azea. There would be advantages to jointly funding such a study with the regional YMCA organization and possibly other cities. No only would the joint funding reduce the cost for each entity, but the interest of each would be represented in the analysis. YMCA staff have estimated the cost of such a feasibility study in the range of $20,000 to $25,000. ATTACHMENT: (1) Flyer on Membership Rates, Financial Assistance and Programs available from the Winston Family YMCA AGENDA ITEM #3B FEBRUARY 26, 2001 WINSTQN FAMILY YMCA MEMBERSHIP-RATES Effective January 1, 2001 FAMILY MEMBERSHIP:. Available to persons 18 years of age & older who aze married, and may have dependents (under the age of 21) living at home.. Includes privileges. far the entire family. joining Fee: $120.00 Monthly Dues: $78.00 INDIVIDUAL MEMBERSHIP: Available to individuals I8 yeazs of age & older, whether single or married. Includes privileges for one person only. Joining Fee: $75.00 Monthly Dues: $49:00 TEEN/STUDENT MEMBERSHIP: Available to individuals 13 years of age (or in 6th grade) through age 25, who are full-time students. Proof of school registration is required. Joining Fee: $30.00 Monthly Dues: $32.00 We accept Visa, MasterCard, and American Express,. as well as check or cash Noce: Prices aze subject to change. PAYMENT OPTIONS: The joining fee is a one-time fee as long as the membership does not lapse for more than 60 days. The monthly fee can be paid in two methods: 1. Monthly Bank Draft. This is a convenient, automatic deduction from your checking or savings account. Just provide a voided check, and specify the date you would like the funds to transfer -either the 1st or.the 15th of each month. 2. Annual Lump Sum. This method allows you to pay a-lump sum (equal to 12 times the monthly fee) in advance for the year. FINANCIAL ASSISTANCE: The YMCA will provide service for anyone who desires to participate in membership or programs, regardless of inability to pay the established fees. Funds raised through our Really Caring Campaign suppott our financial assistance program. Financial assistance is available to those who qualify. Applications for financial assistance are available in the Member Services Office. All information is strictly confideritial. Our mission: To put Chrisrictn principles into practice through. programs that build healthy spirit, mind and body (or aQ. AGENDA ITEM #3B FEBRUARY 26, 2001 MEMBER ADVANTAGE: Your membership entitles you to many benefits in addition.to the use of the facility. Here aze some of the benefits that you may want to take advantage of as a YMCA member: * Free Aerobic Classes * Free Spinning Classes * Free Fitness Evaluation 6c Orientation * Free Fit and Fabulous over Fifty Classes * Free Healthy Start Program * Open Basketball Play * Volleyball * Free YMCA Boot Camp * City Wide Membership (includes use of all Duval & St. }ohns.County YMCA's) * A.W.A.Y. Program -access to YMCA's azound the country * New! Peak Performers Branch -Utilize this new addition to the YMCA as a rock climbing gym * Cline week advance program registration before open registration FFC Family Members may take advantage of the followings * Kids tumbling, karate, dance &. ballet exclusively for YMCA family members * Free Kids Aerobics 6t Kids Play classes * Free KIDZONE (nursery) * Reduced program fees for the following: Summez Day Camp, Before and After School Caze, Youth Spore Leagues & Clinics, Indian Guides & Princesses, Mother's Morning Cvt, Kid's Night Out, Chess Club, and much more. Teen(Student Members and FFC Family Members may take advantage of the following: * Free Pre-Teen and Teen Stength Orientation * Free Teen Cycling Classes * Teen dance classes exclusively for YMCA members. * Access to the Teen Center (Teens only)