Yorkville Considers Alternatives to Current REC Center Lease

Yorkville leaders agreed they don’t want to continue leasing the under its current terms after the facility has run at a deficit since the city’s lease began in July 2008.

Rather, city leaders want to explore purchasing the building, renegotiating the lease terms or moving the recreation facility to another site. Yorkville City Council and Park Board members discussed their options last week at what Gary Golinski said would be the first of several joint conversations between the two public bodies.

Ward 1 Alderman Carlo Colosimo said he wanted to err on the side of caution when it came to city finances and move forward with planning for alternatives.

“I just see the clock ticking,” Colosimo said. “December’s coming up, and we have to make a decision.”

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 at least $100,000 as a financial penalty.

Leaders also could negotiate new terms with Walker Custom Homes. Ron Walker, who owned Club 47 before the city leased the building and its customer base, he was open to negotiations.

Currently, the city pays $18,000 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.

The city controls the REC Center portion of the building, plus a smaller unit that houses a preschool, City Administrator Bart Olson said. Three other smaller units (which house a coffee shop, hair salon and pizza parlor) could be included if the city were to purchase the building, but they also could be excluded, Olson said.

The full-time staff dedicated to the REC Center has decreased from seven three or four years ago to four currently.

Monthly paid memberships have more than doubled from 545 in May 2009 to 1,498 last month, said Tim Evans, the city’s superintendent of recreation.

Membership fees comprise about 60 to 75 percent of the REC Center’s revenue, as its overall revenue increased from $48,227 in May 2009 to $55,945 last month, according to a memo Evans prepared. Meanwhile, expenses have increased from $63,618 in May 2009 to $71,079 last month.

The facility has run a deficit in 13 of the 25 months from May 2009 through last month, although expenses have outpaced revenues only once in the past six months, according to the data Evans provided.

“If it was just the day-to-day operations, I think we could dig significantly into this deficit,” Evans said, cautioning that the city did not have savings for large or unexpected maintenance expenses.

At the meeting June 14, Ward 4 Alderman Rose Spears questioned what funds the city would use to purchase the building, if that’s the direction they ultimately choose.

Ward 2 Alderman Larry Kot wondered how the recent deficit figures compared with those before the lease. City staff did not have those numbers at the meeting.

“I know rec programs are very rarely self sustaining,” Kot said.

Ward 3 Alderman Mary Munns said he was comfortable with a small operating deficit.

“To me, it doesn’t have to be budget neutral, but it has to be a lot closer,” Munns said.