Two suburban YMCA organizations on Thursday submitted formal offers in federal bankruptcy court to purchase four YMCA centers from the YMCA of Metropolitan Milwaukee. The offers include agreements to honor the terms of all existing membership contracts and retain substantially all existing employees.
The YMCA of Metropolitan Milwaukee in June filed for bankruptcy to overcome $30 million in debt and said it planned to sell most of its real estate assets to do so.
On Thursday the YMCA of Central Waukesha County submitted a formal offer to the U.S. Bankruptcy Court for the Eastern District of Wisconsin to purchase the Southwest YMCA at 11311 W. Howard Ave., Greenfield; the Tri-County YMCA at N84 W17501 Menomonee Ave., Menomonee Falls; and the West Suburban YMCA at 2420 N. 124th St., Wauwatosa; from the YMCA of Metropolitan Milwaukee.
According to court filings, the YMCA of Central Waukesha County is proposing a total purchase price of $7 million in cash at closing, plus an earn out of up to $1 million based on those facilities’ earnings for calendar years 2014-2016.
Agustin “Gus” Ramirez, chairman of Waukesha-based HUSCO International and long-time president of the Waukesha County YMCA Foundation, said that he has provided a “sizeable contribution” from the Ramirez Family Foundation to facilitate the Waukesha YMCA’s ability to finance the acquisition of the three facilities.
“I am a strong believer in the Y and personally have seen the impact the Y has on kids, families and communities,” Ramirez said. “If completed, this transaction will allow both organizations to better leverage their collective expertise and shared commitment to the Y’s mission, ultimately serving more families and communities in southeastern Wisconsin.”
“Serving approximately 200,000 members combined, all of southeastern Wisconsin will benefit from a strong, healthy regional network of YMCAs,” said Chris Becker, chief executive officer of the YMCA of Central Waukesha County. “Our shared mission of youth development, healthy living and social responsibility has lasting relevance, and we are proud to do our part to ensure even more members of our community have the chance to benefit from all the Y has to offer. This includes significant reinvestment in these three facilities and equipment that will amount to over $2 million per year to ensure our Y’s consistently provide the highest level of programming and services expected by our members and community partners.”
Also Thursday, the Kettle Moraine YMCA submitted a formal offer to the court to purchase the Feith Family Ozaukee YMCA, 465 Northwoods Road, Port Washington, from the YMCA of Metropolitan Milwaukee.
According to court filings, the Kettle Moraine YMCA is proposing a purchase price of $2 million in cash at closing with two significant contingencies – a financing contingency in which the Kettle Moraine YMCA must obtain a first mortgage financing of $1.5 million and a fundraising contingency in which the Kettle Moraine YMCA successfully raises $500,000 through community support toward the acquisition.
“The Kettle Moraine YMCA Board of Directors is in support of securing long-term financing to help fund the purchase of the Feith Family Ozaukee YMCA. In addition, already underway is a capital campaign to help with the purchase and facility improvements planned for the Feith Family YMCA,” said Rob Johnson, executive director of the Kettle Moraine YMCA. “Since announcing our intent to acquire the Feith Family YMCA, the community support has been tremendous. In fact, local community leaders are stepping up to help with the fundraising campaign to save the Y. We are hopeful more community leaders will join this cause and that we ultimately raise the necessary funds to complete this transaction and continue the myriad of youth and adult programming and services the Ozaukee community has long enjoyed.”
The YMCA of Metropolitan Milwaukee also announced that it has received a letter of intent from Risen Savior Lutheran School to enter into a rental agreement by which it would expand its operations to the current John C. Cudahy YMCA campus, 9050 N. Swan Road, Milwaukee, during the school year. With the YMCA of Metropolitan continuing to run all summer programming – including the Miracle League of Milwaukee – the facility will now be fully occupied year-round, as opposed to closing during fall, winter and spring as the nonprofit initially planned under its restructuring efforts.
The facility will transition to focus exclusively on K4-8 education for the majority of the year. When finalized, the lease will be also be submitted to the bankruptcy court for approval.
The YMCA of Metropolitan Milwaukee also said that it is beginning to evaluate alternative locations for the Downtown YMCA. It is expected to take at least a year to complete this process. In the meantime, the organization said it has received and is considering various offers to purchase the existing downtown facility in the Plankinton Building at 161 W. Wisconsin Ave. in the Shops of Grand Avenue.
The organization also said that “a number of hopeful discussions” have been had with potential operators for both the South Shore YMCA at 3244 E. College Ave., Cudahy, and Camp Matawa at N885 Youth Camp Road in Campbellsport. The organization said it “remains fully committed to working with all parties to find long-term partners best suited to maximize the potential of these facilities.”
“From the beginning, our objective has been to establish a sustainable financial and operating platform while preserving the Y’s mission and continuing to best serve our shared community,” said Julie Tolan, president and chief executive officer of the YMCA of Metropolitan Milwaukee. “While this (bankruptcy) process is undoubtedly difficult, we are so very grateful for the remarkable support we have received from our employees, members, benefactors, neighboring Y’s and community leaders throughout southeastern Wisconsin who share our belief that the Y matters and is worth saving.”