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YMCA hasn't decided on sale price, director says

The YMCA will try to continue exercise programs and other services at locations yet to be
determined, officials said Wednesday after announcing the plan to sell the facility.
The YMCA will try to continue exercise programs and other services at locations yet to be determined, officials said Wednesday after announcing the plan to sell the facility. Modesto Bee

UPDATE - 4:15 p.m. The board of the Modesto YMCA has not decided when to put the facility up for sale but expects the sale will allow the Y to retire its debts totalling $2.5 million, the organization's chief executive said today.

"The facility will remain open to YMCA members until the board finalizes a sale plan," Phil McGovern said in a news release. "The Y will notify members well in advance of the closing date."

The board has not settled on an asking price for the property on McHenry Avenue, McGovern said.

The four-paragraph statement, in response to 21 questions from The Bee, said the Y's volunteers and staff look forward to serving Stanislaus County "for a long time to come."


YMCA leaders pledged Thursday to shed light today on the crushing debt compelling the sale of their McHenry Avenue facility and to share what thousands of members might expect in the future.

"There will be many positives that will evolve for our YMCA to serve our community from this course of action," Chief Executive Officer Phil McGovern wrote in an e-mail. "We look forward to informing everyone in Stanislaus County."

The Bee submitted 21 written questions, as requested, before being informed that the response would come today in a news release.

McGovern's e-mail Thursday indicated that the news release "should answer most if not all of your questions."

The Bee had inquired about the YMCA's asking price for its building, what patrons could expect from farmed-out services, recent grants and cost-saving measures, a full accounting of the YMCA's debt and its failure to produce audited financial statements for three years running.

The mood was subdued in the YMCA's lobby and in a senior workout class Thursday morning, said member and volunteer tango instructor Mary Menz, 64. She also attended a meeting of members on Wednesday.

"It's not the sort of news anybody wants to hear," Menz said. "But we knew they'd been in financial trouble, and Phil gave it his best shot."

McGovern took over the helm in December, a few weeks after The Bee outlined the YMCA's $1.8 million debt, declining membership and difficulties with vendors and its bank. The debt has grown to $2.5 million, he told members Wednesday.

"How does $2.5 million disappear? That question was asked more than once," Menz said. "The only answer we got (from YMCA leaders) was, 'We wish we knew.' "

Menz said leaders speculated that the facility at McHenry and Floyd avenues could be worth as much as $4 million, with 64,000 square feet in a gymnasium, two swimming pools and various workout rooms. If razed for another commercial buyer, the 2.95 acres might fetch $1 million, Menz recalled leaders saying.

"So they're hoping to sell it for enough money to retire the debt and still have some walking money so they can proceed in doing at least something (elsewhere)," she said.

Speculation on uses for facility

CoSoL Commercial Real Estate co-owner Tom Solomon agreed Thursday that "the greatest value is in use of the current configuration and layout," and said $1 million for a cleared lot probably is not far off the mark. But he would not speculate on whether the facility, built in 1964 and partly renovated in 2004, would appeal to fitness club operators.

"I would imagine a guy in the gym business would probably look at it as kind of a dinosaur," Solomon said.

Other buyers might see potential for a vocational school or convalescent home, he said.

Commercial broker Brian Velthoen said the building might be suitable for a physical therapy business.

"The problem today is retailers are really reeling," Velthoen said. "And we've got more office inventory than we can get rid of."

The YMCA's fortunes seemed bright when Steve Smith took over as chief executive officer in 2002, with membership dues and revenue having more than doubled over the previous five years. But by 2006, the YMCA had reduced programs, eliminated dozens of employees and shrunk operating hours. The YMCA's fund balance, or the difference between assets and liabilities, plummeted from $1.15 million in 2000 to $11,548 by April 2007.

The Bee was unable to reach Smith on Thursday. He now is the chief marketing officer for the United Way of Stanislaus County.

The prospect of closing "is a disgrace," said Betty Weatherington, 76, who attended a senior health program before a recent medical setback. "They have to get to the bottom of why it all happened."

Kaye Reiff said she and a friend joined the YMCA last month and are "annoyed that they didn't give us any warning. But at least they didn't make us sign a year contract."

Menz said the atmosphere at Wednesday's meeting ranged from "a little anger" and "shock at the amount of the debt" to "a mood of resignation." The vision of a wealthy benefactor rescuing the club seems to have faded, she said.

"For a while, we were hoping for some angel to help, but in this economy, there are not too many angels with spare cash," she said. "So nobody was surprised, but we kind of had hope. It's like watching 'Romeo and Juliet,' where you keep hoping the show ends differently this time."

Bee staff writer Garth Stapley can be reached at or 578-2390.

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