Details revealed for new YMCA lease agreement with city

City council will consider the final step Monday in a plan to secure the future of the Sault Ste. Marie YMCA, asking councillors to approve the city leasing the McNabb Street building from its new owner and subleasing it back to the Y.

Two lease agreements have been drafted in relation to the Sault Ste. Marie YMCA — one for the city to lease the building from its new owner and a second sub-lease agreement in which the YMCA will pay $100,000 per year to the city, which is acting as sublandlord.

Those leases will each have a lifespan of 10 years, with no increases over that time to be made to the $100,000 per year payments.

If approved, the city will not simply be guaranteeing the $1 million in total lease payments over 10 years, but will take on the role of being a sublandlord, including responsibility for capital repairs to the almost 60-year-old building. The city will also be responsible for ensuring the process has commenced on needed repairs to the roof and boiler in the building.

The agreement with the owner gives the city the option to purchase the McNabb Street property at a cost of $2 million at any time over the span of that agreement.

The Sault Y will be responsible for all operational and maintenance costs to operate the facility and will be required to submit quarterly financial statements and annual audited financial statements to the city, as well as regular reporting on membership growth and efforts to achieve its growth targets.

As part of the sublease agreement, one member of city staff will be appointed to the Sault Y board.

Funds from the $2 million sale price are to be used by the Sault Y toward repayment of its long-term debt, with the remainder for operational and capital requirements set out in the lease.

The city had originally planned for $1 million to be needed for repair of the roof and replacement of at least some of the boilers. 

During the due diligence period it was discovered the cost of the boiler replacement could be reduced, but during Building Code and Fire Code inspections unexpected sprinkler expenses were revealed. In total, $743,000 is estimated to be needed for the roof, sprinkler and boiler repairs — $257,000 less than originally expected for just the roof and boilers.

As per the agreement, the repairs to the roof and boilers must begin within 30 days from the commencement date. The sprinkler repairs must be completed before the commencement date of the agreement.

Those repairs will be completed using about $370,000 of the $505,000 city council committed during its May 13 meeting, with matching provincial funds expected from the Northern Ontario Heritage Fund Corporation. The original NOHFC application did not cover the sprinkler repairs, but a secondary application is being made to assist in covering that expense.

In addition to council considering the memorandum of understanding, it will be asked to consider three additional associated by-laws — a YMCA grant agreement, lease agreement and sublease agreement.

Earlier on Thursday, the Sault Y announced it is just 96 members short of its goal of 2,400 in order to be sustainable in the near-term.

On Tuesday, the Sault Y announced a $250,000 investment has been committed by Algoma Steel toward its 'A Bridge to Our Future' campaign. The new owner of the building, the Dr. Lou and Mae Lukenda Charitable Foundation, was revealed to SooToday on Wednesday.

Monday's meeting of city council will be livestreamed on SooToday starting at 5 p.m.