Langford to add nearly $1M to draft budget to keep struggling YMCA open

The future of the YMCA in Greater Victoria will depend on deeper municipal partnerships and support, according to the chief operating officer of Vancouver Island’s joint YM-YWCA. That’s the case in Langford, where the YMCA has asked the city to double the amount it contributes annually, to $1.9 million.

The charitable organization has faced mounting financial difficulties in recent years and says it may have to stop operations at its Westhills location by the end of March if more funding isn’t made available.

“We believe that the community’s been getting a heck of a good deal,” said chief executive Derek Gent. “We want to keep operating here.”

In the five years it’s been open, YMCA says it has lost $10 million to the Westhills location, and now, the YMCA Board is saying it can’t sustain any more.

In January the board voted to cease operations in Langford unless the city stepped up its annual subsidy by another $950,000.

Initial deal predicted financial sustainability with market-rate rent

Conditions have been challenging since the Westhills YMCA opened in 2016. While 65% of its current membership hails from the Westshore, revenue simply hasn’t been enough to cover the fixed operating costs at the 60,000 sq. foot YM-YWCA Westhills facility, Gent said.

The bulk of its expenses come from the market rate rent of about $1.5 million a year. The landlord and neighbourhood developer Westhills Land Corp. voluntarily deferred a percentage of the rent during the pandemic—arrears that now total $1.6 million—but the corporation is now asking for rent in full.

The YMCA is at half of the memberships it had before 2020. “We lost a huge chunk of our operating revenue,” Gent said, calling the pandemic the single largest disruptor of habits since the second World War.

Staffing has also become a challenge across all of YMCA’s offerings. "We're literally designing our programs based on the number of people we can get to work," he added.

The YMCA has a cash fund of $8.4 million leftover from the sale of its Victoria location in 2018. Westhills and Langford are both eyeing that bank balance to cover rent arrears and operating losses. With that much money in reserve, Langford council wanted to know why the YMCA was asking for taxpayer money.

Gent told council that since $10 million of that money had already been sunk into Langford, essentially the board has drawn a line in the sand, saying the rest of the money has to be reserved to provide services outside of Westhills.

In asking for additional subsidies, Gent drew attention to the services it provides besides recreation, such as its youth shelters and transitional housing for young moms.

"It's effectively municipal infrastructure, when you look at all the services and support that's provided," he said.

The terms of a deal signed in 2013 mean that Langford is on the hook for the rent if YMCA defaults or ceases operations. The agreement between YMCA, the City of Langford, and Westhills Land Corp. meant that Westhills would build the $30-million facility especially for the YMCA, and Langford would subsidize operations with up to $950,000 a year.

Langford to consider buying the building

Sitting before Langford council at a recent meeting, Gent told the city he is hopeful that as Westhills neighbourhood continues to develop and Langford’s business community grows, that YMCA membership numbers will increase. But when pressed for specific plans, he had little to say.

Langford councillors also asked Gent what other sources of funding the YMCA had looked for. He admitted their fundraising operations were not as sophisticated as some other YMCA chapters—while they get support from each other, each Y is run independently.

The recommendation Langford staff made to council is to increase operating subsidies for now, but start working with Westhills to buy the building in the future. The market rate rent makes financial sustainability hard to achieve. Westhills representatives told the city it is eager and willing to sell the property to Langford, so council authorized staff to start initial talks.

YMCA subleased its View Royal childcare and gym facilities to other operators in 2021. The organization is now looking at revenue models where funding partners cover the costs of its facilities, with membership fees then used on other variable operating costs, Gent said.

In the recommendation report, the city noted that the YMCA had not provided bi-annual operational reports to the city since the centre had opened and recommended that Langford request detailed operational reports for the past five years.

It’s a request that Gent is happy to fulfill.“There’s certainly nothing that we’re afraid to show,” Gent said. “We’re looking forward to putting it all out there.”

“I understood that there was a more informal reporting relationship,” Gent said. The city has not asked for any reports from YMCA since he became chief executive in 2019, he added.

He notes that Langford council had received a full oral presentation in 2018, when YMCA requested—and was approved—for a $200,000 increase to their annual service agreement funding. Gent met with the mayor and the city manager a number of times prior to the pandemic. Another report was made to council in early 2020, when YMCA asked for some amendments to the service agreement.

Going forward, regular reports will be provided to deepen its relationship with Langford and follow proper protocol, said Gent.

Victoria location also in uncertain position

YMCA’s other facility is located in downtown Victoria. The aging building on Broughton street was sold to Concert Properties in 2018, but was subleased back for YMCA operations until 2025. In 2019, YMCA and Jawl Properties announced that they were assessing the possibility for a new facility at the redevelopment proposed at the site of the Capitol 6 theatre. But there have been no substantive discussions between the two parties since 2020.

Gent said that they are continuing to explore options that will allow YMCA to continue offering services for downtown residents, including possible collaborations with Jawl Properties. The two paused negotiations on good terms, according to both parties.

"Once we get this settled in Langford, it'll allow us to focus our attention a bit more on our operations downtown and get to a solution," he added, "There's still some runway there."