Court OKs plan for YMCA bankruptcy
Published: Tuesday, January 22, 2013 at 6:58 p.m.
Last Modified: Tuesday, January 22, 2013 at 6:58 p.m.
The North Central Florida YMCA plans to emerge from Chapter 11 bankruptcy reorganization within five years under a plan accepted by its creditors and U.S. Bankruptcy Court, the organization announced Tuesday.
Among the highlights of the plan, Wells Fargo agreed to modify $3.6 million worth of loans, the YMCA is continuing plans put in motion last summer to operate profitably and the YMCA of the USA is accepting lower fees.
"This is a huge step in regaining the trust of the community as well as the faith of our donors that we will uphold our fiduciary responsibilities to them as we continue to serve the children and families of our community," CEO John Bonacci said in a news release.
The organization filed for bankruptcy in November 2011 after defaulting on loans taken out starting in 2006 as part of expansion plans. Memberships and donations declined during the recession, leaving four out of five facilities operating at a loss, while the real estate collapse left the organization underwater on its loans, owing more than the properties were worth. The "Y" has since closed facilities in northeast Gainesville, Starke and Crescent City.
Bonacci, a certified financial planner previously credited with turning around Big Brothers Big Sisters of Mid-Florida, was hired July 1 to come up with a plan to operate the YMCA more like a business.
Bonacci said that has meant reducing administrative staff, putting in better cost controls and providing better customer service.
That also includes adding more revenue-generating programs. Bonacci said they are trying to fill in the gaps in services and promote programs between departments.
"Simple things like scheduling of programs where mom drops off kids, is there something for mom to do while she's here," he said.
The YMCA has added dance and cheerleading to go with gymnastics at the Northwood "Y" at 5201 NW 34th St. and more sports and seasons at the Southwest Sports Facility at 9315 Archer Road. They are getting ready to add preschool classes that include music and art and will soon do another 90-day weight-loss challenge through its wellness program.
"All of this is a work on progress," Bonacci said. "I'm working on a shoestring budget so we're trying to gain more community support so we can invest in these programs to further enhance them."
The YMCA is trying to raise money for field lights on the Southwest fields to have sports programs after dark, to resurface the pool and for a new fleet of buses for kids.
As part of the debt modification, Wells Fargo agreed to forgive a dollar for every dollar the YMCA raises up to $500,000.
"This is a huge milestone for us moving forward," Bonacci said. "A lot of those people that have a wait-and-see attitude I'm hoping will come back off the sidelines and help me do the things we need to do to bring this 'Y' back to the standard our members deserve."
The YMCA took out a loan to buy the Southwest Sports property in 2004 and took out loans from other banks to purchase and operate the Starke and Crescent City facilities. Both of those properties went back to the banks.
By May 2009, the organization needed an additional $135,000 from Wells Fargo to make payroll and continue operations.
In 2010 and 2011, all senior managers were terminated or resigned and the board of directors brought in Harold Cook as interim CEO under the guidance of the Y-USA.
At the time of the bankruptcy filing, the organization had annual gross revenues of $435,000 and $5.7 million in debt.
The YMCA recently sold its McGurn Family Center in northeast Gainesville to a charter school, with proceeds of the sale going to PNC Bank as part of the bankruptcy agreement.