The Wichita City Council on Tuesday will consider a contract to allow Genesis Health Clubs to put a fitness facility on the second floor of the Wichita Ice Center, while also extending the deal for Genesis to manage the city-owned skating rink.
Under the proposed contract, the city will issue a 10-year general obligation bond to borrow $750,000 for Genesis to remodel the space to accommodate the fitness center.
Genesis — the dominant for-profit health club operator in Wichita — will be responsible for paying off the debt and providing and maintaining exercise equipment for the facility.
In March, the city picked Genesis from among three applicants to manage the Ice Center, which has often struggled to break even since it was built in 1996.
The councilman representing the area, Michael O’Donnell, said that since Genesis took over the Ice Center, it has made more money than it did for all of last year — with the busy winter skating season yet to come.
He said he strongly supports the proposed agreement.
Although the YMCA is expanding its downtown facility, “In that section of the city, there’s a big hole when it comes to health clubs and workout facilities,” O’Donnell said. “I think it will fill a niche in that part of town.”
The Ice Center fitness center won’t be branded as a Genesis club, but Genesis members will have privileges to use it.
The city is also requiring Genesis to offer day and monthly passes for public use.
Genesis will get 95 percent of the revenue from monthly passes and 80 percent of the income from day-use fees. The city will get the rest.
The original Genesis deal required the city to commit to $316,000 in improvements to the Ice Center.
The management agreement was for one year, automatically renewable to six years, with Genesis to be paid a management fee of $42,000 in years one through three and $45,000 in years four through six.
The city agreed to share 10 percent of the first $10,000 in net income and 20 percent of net income over $10,000.
The new contract will set a term of 10 years for Genesis to manage the ice center, renewable to 15 years.
Management fees will start at $42,000 and increase over time to $55,000 for years 11-15.
If the city terminates Genesis’s deal before the 10-year, $750,000 bond is paid off, the city will have to make the rest of the payments.
If Genesis terminates the deal before 10 years, the company or its owner, Rodney Steven II, will have to pay the city a lump sum to pay off the remainder of the bond.
The council meets at 9 a.m. Tuesday at City Hall, 455 N. Main, Wichita.