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Board told YMCA management and tax-use agreements for Wellness Center expected by August
Summary
Staff said the YMCA management agreement and a tax-use agreement — intended to protect the facility's tax-exempt status — should be ready for the Redevelopment Authority's approval at the August meeting; staff explained how private-for-profit uses could affect tax exemption.
A staff member said the city and Redevelopment Authority are finalizing two documents for the regional Wellness Center: a YMCA management agreement and a tax-use agreement that would limit non-exempt private uses to protect the facility's tax-exempt status.
"The management agreement is exactly what it says — the terms under which the city through its RDA will hire the YMCA to manage and program the facility," the staff member said. On the tax-use agreement the staff member said it is intended to "set out a commitment by the YMCA not to do anything at the facility that would jeopardize our tax exempt status." The staff member added that the documents are expected to come to the board for signature and approval by the August meeting.
Staff flagged an example: renting significant empty space to a for-profit entity could jeopardize tax-exempt status if revenue thresholds were exceeded. The staff member said there is roughly three thousand to three thousand five hundred square feet of unused space that would be subject to vetting for any proposed private uses. The tax-use agreement also will spell out donor-van repayment terms.
The board did not take a vote on the agreements at this meeting; staff will return with final documents for formal approval.
