Two More Public Hearings Scheduled on REC Center Purchase

Yorkville is considering purchasing the REC Center for $4.29 million - a $2.5 million contract paid over 20 years at 6 percent interest.

The math behind the proposed purchase is buried on page 1021 of a 1120 packet for Tuesday's City Council meeting.

If approved, city would buy the building (including four rental units), equipment, business and land for $2.5 million, City Administrator Bart Olson said in a memo to City Council members. The owners, Walker Custom Homes, would finance the installment contract at 6 percent interest over 20 years, so the city would pay them $17,910 a month for a total of $4,298,586.

"The contract will also contain a no-prepayment clause," Olson wrote. "The main reason the property owner was willing to sell the property for less than market value was that the property is a self-financed purchase installment contract."

A recent appraisal suggested a market value of $3.5 million.

Olson estimated the purchase payments would be about $13,000 less a year than the current rent, and the facility's operational budget could have a $35,000 annual surplus, Olson said. The annual budget savings come largely from rental income associated with the four retail spaces on the building's north side and the city no longer having to pay the property taxes.

against renewing the facility's lease when it expires in July 2013.

The city held the first of three public hearings on the potential purchase Tuesday. Future hearings will be at the July 24 and Aug. 28 City Council meetings, which start at 7 p.m. Aldermen could vote on the contract on Sept. 11.

Area residents spoke in support and in opposition of the purchase Tuesday. Resident Walt Stagner wore a shirt that said "sick of spending."

"I'm not against the REC Center," Stagner said. "Just just against paying for it."

Patrick Speciale and his wife support purchasing the facility.

"If you have to raise the rates, go ahead," he said. "But don't eliminate it. It's very important to a lot of people and their lives."

Cathy Grezlik June 29, 2012 at 02:13 PM
Judith you are so right!! Mayor and City Council members do the right thing for once. Do not buy the rec center. This city needs a lot of work. We do not have the money, Period!
Bob Allen July 02, 2012 at 02:10 PM
The price is so high because taxpayers have been spending a fortune to maintain this property. Don't believe the local paper. The original agreement was flawed. I was not on the council when it was approved.
Greg O'Neil July 09, 2012 at 03:10 PM
First of all, government should NEVER be running businesses that can be operated by the private sector. They will NEVER do this efficiently and new companies will not come in and compete with a government entity. The financial analysis is flawed, this old building will cost millions to renovate and maintain, guess who will be paying for that. Finally, why is it the property owners responsibility to underwrite the health club activities of others? You will be taking tens of thousands of dollars in annual property tax revenue off the books and guess who will have to make of the difference. This is a train wreck waiting to happen.
Marooned July 13, 2012 at 10:04 PM
Right on target, Greg. We lose on both ends if we buy this property: it can't be efficiently managed by the government, so expenses and user costs rise; we lose tax revenue from a private owner, and that owner's investment of capital into the local economy (over 2 million initially, and several hundred thousand a year!). Furthermore, How Many Wacky Ideas Must Yorkville Endure! We waste so much time, effort and money considering ridiculous schemes that a first-year business student would reject after a few hours of research. I say we need our council to stand down for a credentials review, in a public forum, before any more business is conducted in our name. Then, we need to name subject experts with personal accountability to serve, either as sitting member, or as staff. Seriously, just because someone takes the time and effort to become a city council or staff member does not qualify them for the challenges. Clearly, our lack of qualified decision makers has hurt us in the past. Representative government is good for oversight and accountability, but we need various experts, legal professionals, and commonsense to have a place at the decision table EACH and EVERY day, not just when someone complains or a council member feels election pressuritis,
M. Green November 05, 2012 at 04:58 PM
Why would government get involved with this REC center? If you do not want to listen to me - listen to Ronald Reagan who stated, "Government is NOT the SOLUTION to the problem - Government is the problem." Go look at the condition of the building and the costs that have already been spent. M. Green


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