Property Owner Comments on REC Center Lease

Club 47 owner Ron Walker is willing to renegotiate the city’s lease of the building, but he doesn’t think the lease is to blame for the city’s financial strain.

“If everyone does the numbers, the lease was never the problem,” Walker told Park Board members Thursday.

Walker, speaking during the public comment portion of the Park Board meeting, pointed instead to city officials changing membership rates to include resident and nonresident fees. Several of the membership rates are lower than they were when the Walkers ran the facility, but overall, the facility has about 200 more members than Club 47 ever had, Walker said.

The REC Center was controversial during recent city budget discussions and during the recent mayoral campaign, largely because the city’s budgetary fund dedicated to the REC Center runs at a deficit.

In a February analysis, City Administrator Bart Olson projected the REC Center fund would have a $99,881 deficit for the fiscal year ending April 30, which is higher than the $50,240 deficit last fiscal year and the $77,625 deficit in Fiscal Year 2009.

City leaders need to decide by December whether they are going to continue leasing the REC Center past June 2013. Under the 2008 agreement, 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 but pay a financial penalty.

Mayor Valerie Burd had discussed renegotiating the lease terms with Ron Walker and his wife, Sue, but those talks left off in January with Burd indicating the city would get an appraisal. City Administrator Bart Olson indicated an appraisal of the property and business had not yet been done but likely would cost $6,000 or $7,000.

When asked Thursday, Ron Walker said he was willing to renegotiate the lease.

“I’m willing to renegotiate some of the increases, definitely,” he said. “… Can I make up the whole (annual deficit), no.”

Walker also pointed out that the city covers about $54,000 a year in property taxes for the building, which the city would not incur if the city owned the building.

After the Park Board meeting, mayor-elect Gary Golinski said he was standing by his campaign stance that the REC Center’s budgetary fund should at least break even. When city leaders decided to lease the building, they were told the facility could support itself, Golinski said.

Moving forward, Golinski said he’d like to have a joint meeting with the Park Board and City Council after the newly elected officials are seated May 10.

“(Let’s) get everyone on the same page,” Golinski said, “and see where we go from there.”