YMCA of Metropolitan Milwaukee files for Chap. 11 bankruptcy
YMCA of Central Waukesha County plans to purchase three Ys

By Sarah Pryor - Freeman Staff

June 5, 2014

   

The YMCA of Central Waukesha County is purchasing three YMCA branches from the
YMCA of Metropolitan Milwaukee.

Charles Auer/Freeman Staff

MILWAUKEE - The YMCA of Metropolitan Milwaukee has filed for Chapter 11 bankruptcy and will sell the majority of its real estate assets to pay down the debt, and the YMCA of Central Waukesha County has signed a letter of intent to purchase three of those properties.

According to a press release from the Metropolitan Milwaukee Y, the organization is planning a “restructuring plan” that will establish an urban Milwaukee Y consisting of centers within or very close to the city of Milwaukee. All centers, camps, programs and other commitments are expected to operate uninterrupted throughout the bankruptcy process.

The YMCA of Metropolitan Milwaukee’s debt exceeds $29 million, with a 2014 budgeted revenue of $37 million and a 2014 budgeted EBIDA (Earnings Before Interest, Depreciation And Amortization) of $950,000 - a debt to EBIDA ratio of 30 to 1 - according to the release.

“With the added impact of external and internal complications over the past few years, including the recession, intensified competition, millions of dollars in deferred maintenance costs, declining membership and decreasing contributions, the YMCA of Metropolitan Milwaukee’s current operating and financial model is not sustainable,” YMCA officials said in the release.

“While much has already been done to address this situation - including staff layoffs, delaying necessary investments in its centers, freezing salaries and benefits and eliminating some program offerings - absent a significant restructuring and debt reduction, the YMCA of Metropolitan Milwaukee will be insolvent by as soon as this fall.”

The restructuring plan will include the Rite-Hite Family YMCA, the Northside YMCA, Parklawn YMCA, Downtown YMCA, John C. Cudahy YMCA and Camp Minikani.

The YMCA of Central Waukesha County has signed a letter of intent to purchase the West Suburban YMCA in Wauwatosa, Tri-county YMCA in Menomonee Falls and Southwest YMCA in the Greenfield area, with a majority of the proceeds from this transaction to be used for debt reduction, according to the release.

 

Y planned for Sussex

Additionally, the Kettle Moraine YMCA has signed a letter of intent to purchase the Feith Family Ozaukee YMCA.

The village of Sussex issued a statement about the YMCA of Central Waukesha’s acquisition of the properties, saying the village remains committed to the Y, and would rather be part of a six-YMCA system than a three-YMCA system.

Sussex will likely be home to a YMCA in 2018, and it’s planned to be located on the same Main Street campus as the new Sussex Village Hall and Pauline Haass Public Library. The village is contributing $7 million, about half the total construction costs. However, the village wouldn’t contribute to ongoing operational costs.

Bob Denman, CEO of the YMCA at Pabst Farms in Oconomowoc, said because his location is part of separate, independent association for its operations, the bankruptcy filing will not affect him. He added that the service area of his location would not allow him to consider acquiring any Milwaukee locations.

www.ymcamke.org

Email: spryor@conleynet.com