Politics & Government
City Likely to Cancel REC Center Lease
Negotiations to purchase the facility could stretch on for a year or so after the deadline to opt out of the lease, city leaders said.
The formal decision to opt out of the lease in June 2013 will be easy to make next month, city leaders said.
City Council members have reached a consensus to opt out of the lease – which will mean paying the landlord a penalty of at least $100,000 – and city staff will continue negotiations surrounding purchasing the building, Mayor Gary Golinski said Tuesday.
“We’re working very hard,” Golinski said, of negotiations surrounding the potential purchase. “… I’m not going to put my support behind it until I know it’s going to be successful.”
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, the city could purchase the REC Center for about $4 million, continue the lease through 2018, or opt out of the agreement in June 2013. City leaders need to inform the landlords, Walker Custom Homes, if they are going to opt out of the lease by the end of December.
Golinski said he supports purchasing the building if the price and interest rate involved allow the city to operate the REC Center while providing a financial cushion for unexpected expenses.
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The city has operated the facility , although the monthly deficit had been decreasing in recent months. The city pays $18,500 monthly rent, with that figure set to increase $500 a month every July 1 through the existing lease. The city also pays the property taxes, which increased from $53,000 to $60,000 this year, and maintains most of the building.
Aldermen Carlo Colosimo and Chris Funkhouser said they don’t want the city to sell bonds to fund a purchase. They weren’t optimistic that negotiations between Walker Custom Homes and city staff would lead to a sales agreement that the city could support with its current budget.
“Personally, I think we’re too far apart for us to have it as a viable option,” said Colosimo, of Ward 1.
But discontinuing the REC Center would mean the facility reverted to a private gym, Colosimo said.
“If we don’t purchase it, there will still be a gym for people to go to,” he said.
It also would mean that the parks and recreation programs would have to be revamped in different spaces, as the city’s budget allowed, said Funkhouser, of Ward 3.
