Two Charlottesville fitness clubs’ suit against the city and county over plans for a new YMCA facility heads to the Virginia Supreme Court this week. (Photo courtesy Piedmont YMCA)
More than four years after the Piedmont Family YMCA inked deals with the city and Albemarle County that would allow the group to build a permanent facility in McIntire Park, the project’s future is still up in the air as a legal battle over the agreement forged with the municipalities goes before the Virginia Supreme Court June 7. Lawyers for the city and county are defending the deal from a challenge spearheaded by ACAC owner Phil Wendel, whose attorney says the municipalities should have let for-profit companies bid to build, too. But YMCA leaders say the fight is about bigger issues.
Plans for a home for the local Y, which currently runs most of its programs in school gyms, have been in the works for years, said YMCA board president Kurt Krueger. In January of 2008, city and county officials agreed to let the YMCA construct a $15 million facility with a pool and diving well on the west side of the park. The municipalities each pledged more than $2 million toward the project, and the city agreed to lease the land for $1 per year.
But a group of local fitness clubs, which now includes only ACAC and Gold’s Gym, filed suit in 2010, saying the agreement violated the Virginia Public Procurement Act. A local judge ruled in favor of the city and county. But just when Krueger and others were sitting down with contractors last summer, they got word that the state Supreme Court had agreed to hear the clubs’ appeal.
ACAC and Gold’s contend in court briefs that because the YMCA hammered out a deal with the city and county to provide fitness memberships to residents at discounted rates in return for financial support, the exchange amounts to a procurement of services.
Thus, they argue, the municipalities should have done the same thing state law requires they do when seeking any other service for residents: they should have allowed anybody interested to submit a bid. Instead, said Edward Lowry, who is representing the clubs, the city and county structured their request for proposals so narrowly that only one entity qualified—the YMCA—and called their contributions gifts.
“What’s happening here is not a gift, because they’re procuring services in exchange for the money,” Lowry said, and the law says the privilege of providing the service goes to the lowest bidder. “If a nonprofit can do it cheaper because it’s a nonprofit, that will show up in the bidding process,” he said. “That’s what the VPPA is there for—to be sure the best price can be achieved,” Lowry said.
As for the fact that the same arrangement has been used to set up more than two dozen YMCAs around the state, “All that says that to me is that nobody has challenged it,” Lowry said.
Attorneys for Charlottesville and Albemarle are sticking by the argument that a local judge upheld, saying the financial support is, in fact, a gift, and state statute allows municipalities to give such charitable donations to nonprofits.
“Presumably, whenever those donations are made, there’s a benefit in some respect to the residents of that locality,” said city attorney Craig Brown. “We don’t think that makes it a purchase of services.”
YMCA leaders said they don’t think the clubs ever intended to make a bid for a public contract. ACAC and the other gyms never complained about the bidding process while it was happening, said Piedmont Family YMCA CEO Denny Blank. They could have submitted a plan for a nonprofit venture to compete with the Y, he said. The fight is really about for-profit clubs fearing the nonprofit Y will poach their potential members with lower rates.
“Their view is that a YMCA is basically a not-for-profit ACAC fitness club, but a YMCA is a hundred times more than that,” Krueger said. ”Fitness just happens to be the means to that end.”
But Krueger and Blank said Wendel has a history of doing battle with the YMCA. He’s an active member of the International Health, Racquet & Sportsclub Association, a professional organization that has long lobbied Congress to restrict YMCAs’ tax-exempt status, saying subsidized fitness operations undermine their members’ businesses.
Wendel declined to comment. But his club’s spokesperson, Christine Thalwitz, said ACAC is focused on the legal question at hand.
“At a global level there is indeed a conversation within the fitness industry about tax laws as they pertain to the non-profit and private sectors,” said Thalwitz in an e-mail. “Our issue, however, is a local one.”
There’s been opposition to the plan to build a YMCA facility in the park from other quarters, too. Members of the Coalition to Preserve McIntire Park initially fought the proposal, in part because some believed it would mean the loss of the park’s softball fields.
“The park belongs to all of us,” said Bob Fenwick, who spoke out against the new building. “I have nothing against the YMCA, but not everybody appreciates the YMCA. In putting it in McIntire Park, you would be taking something from everyone.”
He and other Coalition members think the Y would reach more people if it were closer to Downtown, he said.
But Blank said the planned location will allow city and county residents of all backgrounds and income levels to come together, he said, whether they’re kids from nearby Charlottesville High School walking in for swim practice or families from suburban neighborhoods.
“If you’re down there for noonday basketball, you could have the CEO of Wells Fargo Bank next to a homeless kid next to somebody from the projects next to a farmer from Albemarle County, all on the same team,” said Blank.
He also said he’s troubled by the tone of some of the arguments from residents against the Y.
“There’s been an element to this that nobody really wants to address,” he said. For years, he said, McIntire was Charlottesville’s white park. Black residents used Washington Park. It’s been a long time since language supporting the segregation was stripped from the city code, Blank said, “but there’s still a strong segment of the population in this town who still have that mindset.”
It baffles him, he said, that the YMCA has had to fight—first at community meetings and now in the state Supreme Court—to establish a home in Charlottesville. He’s worked with other YMCAs around the country for more than 30 years, he said, and he’s never seen so much opposition.
“I’m a lifetime Y guy,” he said, “and this is the first place I’ve ever been where people have fought to keep the Y from being productive and fruitful.”