City Council approves letter of intent to help YMCA build new downtown facilityBrent Wistrom
Wichita City Council members voted 5-0 this morning to approve a letter of intent to issue $23 million in industrial revenue bonds to help the YMCA build a new downtown facility.
Vice Mayor Jeff Longwell and council member Lavonta Williams abstained from the vote because they are YMCA board members.
The council’s approval came after criticism from some people who feel the IRBs, paired with other exemptions the nonprofit YMCA gets from state and federal government, would give the organization an unfair advantage over other health clubs and would force more of them to go out of business.
“It’s not right. It’s not fair,” said Rodney Steven II, owner of Genesis Health Clubs.
As a nonprofit, the Y is eligible under federal tax codes to have its capital building projects financed with tax-exempt bonds, meaning they carry a lower interest rate because the purchaser of the bonds doesn’t have to pay taxes on them, said Allen Bell, the city’s director of urban development.
Once the bonds are issued, the city will hold title to the facility and lease it back to the Y until the bonds are paid off. Then the city would deed it back to the Y. The lease payments would equal the bond payments.
The city has no risk in relation to the proposed IRBs, according to Bell.
When the Y launched its fundraising campaign, business leaders said a new downtown Y is needed to replace the current 50-year-old facility and expand recreation and services to low-income kids and their families.
The new 110,000-square-foot facility would be built adjacent to the current location at 402 N. Market. For more, see The Eagle’s previous story: http://www.kansas.com/2011/02/07/1709566/new-y-seeks-23-million-in-tax.html#ixzz1E2Ux4CVm
© 2011 Wichita Eagle and wire service sources. All Rights Reserved. http://www.kansas.com