Financially strapped YMCA of Topeka seeks $500,000 in donations to help buy building it uses
For 21 years, the YMCA of Topeka has leased the building it uses in southwest Topeka.
Now that financially challenged organization needs to buy that property at 3635 S.W. Chelsea Drive outright from its bondholders — or lose it.
That organization on Monday kicked off the public phase of a fundraising campaign through which it is asking for donations to help enable it to make that purchase.
"Our goal is to raise $500,000 from the community, so the YMCA can make an appropriate offer to bondholders to purchase the asset by the end of October," the YMCA of Topeka's interim president and CEO, Glenn Haley, told The Capital-Journal.
The campaign's total goal is $700,000, with slightly more than $200,000 having already been raised during its "quiet phase," Haley said.
Donations can be made online at ymcatopeka.org or by mailing them to the Topeka YMCA Foundation, 3635 S.W. Chelsea Drive, Topeka, KS 66614, Haley said.
He expressed confidence that the YMCA of Topeka would raise enough money to buy the property.
Terry Diebolt, chairman of the organization's board of directors, said it hopes to continue to operate out of the building for many years to come.
"We don't look at this as a negative," Diebolt said. "We look at it as an opportunity. Because if we're successful, our future's guaranteed, our debt is manageable and and we own the asset."
Topeka's YMCA see 'drop of over 50% in annual revenue'
The YMCA of Topeka, established in 1880, offers numerous programs and services for children, senior citizens and the community.
Its mission involves putting "Christian principles into practice through programs that build a healthy spirit, mind and body for all.”
The city of Topeka in 2000 issued industrial revenue bonds to enable the YMCA of Topeka to build, furnish and equip the 38,325-square-foot facility at 3635 S.W. Chelsea Drive.
The arrangement posed no financial risk for Topeka's city government.
It called for investors to buy the bonds, which were to be paid off using lease payments received from the YMCA of Topeka. If the project defaulted, that would become an issue between the YMCA and the investors.
The building was constructed in 2001 and renovated in 2016.
But in recent years, keeping up with its lease payments has become increasingly difficult for the YMCA of Topeka, which has faced significant financial challenges.
That organization in 2018 sold its facilities at 421 S.W. Van Buren and 1936 N.W. Tyler, leaving it with its one remaining building at 3635 S.W. Chelsea Drive.
More:Downtown Topeka Post Office building sold after being on the market for years
The COVID-19 pandemic only made things worse.
The YMCA of Topeka announced in 2020 that it had filed for Chapter 11 bankruptcy protection, and had defaulted on an existing bond payment.
"In the last several years, the YMCA of Topeka has experienced a drop of over 50% in annual revenue," said a court document filed that year.
'In position to negotiate' for YMCA's building
The YMCA of Topeka got out of bankruptcy last October, said Haley, who has been its interim executive director since March 1, 2021. He specializes in helping financially strapped YMCAs get back on their feet.
The YMCA of Topeka entered into negotiations regarding the southwest Topeka building with CoreFirst Bank & Trust, the trustee for the bondholders, Haley said.
"As a result of those negotiations, we have an amiable agreement on how to move forward," he said.
That agreement arranged for the YMCA of Topeka's lease to be terminated last January, though the organization continues to be allowed to occupy the building, Haley said.
Meanwhile, the bondholders voted to put the property up for sale, "providing the opportunity for the Y to be a purchaser just like anybody else," he said.
The property was listed beginning last month on the commercial real estate website Crexi, with an asking price of $2.75 million.
The facility features private offices, a reception area, a full-size basketball court, a swimming pool with a water slide, a hot tub, playroom, walking/jogging track with a weight room and a separate spin room, Crexi said.
Topeka YMCA's fundraising campaign just finished its 'quiet phase'
The YMCA of Topeka is "in position to negotiate for the purchase of the asset," Haley said Monday.
The Topeka YMCA Foundation, a separate nonprofit organization, has been working to carry out the "quiet phase" of the campaign to raise money to be used to buy the building.
"We've had very good response from some of our members already," Diebolt said.
Now the YMCA of Topeka is asking the community to help it "get over the finish line" by making contributions during the public phase initiated Monday.
It's seeking to get the word out about the wonderful services it provides "for young and old alike," Diebolt said.
The facility is about "much more than fitness and recreation," Haley said.
"This is a social place," Diebolt said. "This is a place where people come together and create friendships."
Those who use the facility's fitness center in the morning are "like one big family," he said.
'We're not here for profit'
The YMCA of Topeka gives financial aid to many people who need it, having provided more than $178,000 in scholarships in 2020 for people who otherwise wouldn't have been able to use its services, Haley said.
Subsidies are received by 48% of the senior citizens who use those services and for more than 70% of the children who take part in its child care program, Haley said.
The extent of the available aid is one thing that separates the YMCA of Topeka "from everyone else," he said.
Another, he said, is that the YMCA uses its proceeds not to financially benefit owners or stockholders, but simply to maintain its operations, services and facilities.
"We're here for community benefit," he said. "We're not here for profit."
If the YMCA of Topeka were to prove unable to purchase the property at 3635 S.W. Chelsea Drive, it would have to move out of the building but would remain in operation, Haley said.
While its members would no longer have access to a swimming pool, he said, the organization would work to find a new office location and continue to offer most of its current services, including a gym.
Tim Hrenchir can be reached at threnchir@gannett.com or 785-213-5934.
This article originally appeared on Topeka Capital-Journal: YMCA of Topeka seeking donations to help it buy building it uses
