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Economy & Business
Wed June 4, 2014
YMCA of Metro Milwaukee Files Chapter 11 Bankruptcy and Looks to Sell Property
Major changes are underway for the YMCA of Metropolitan Milwaukee - it is $30 million in debt.
On Wednesday, the Y announced plans to sell off most of its suburban assets and file for bankruptcy in order to stay in business. Leaders say the organization will return to its core mission— healthy living, social responsibility and the development of young people.
The YMCA has been an institution in Milwaukee for 155 years, and it has grown and expanded. Julie Tolan, executive director, says the Y put money into a number of things that made sense at the time.
“We built a school, we made massive improvements to several of our facilities, we built out this downtown presence at the Plankinton mall,” Tolan says.
But back in April, the Y announced that it needed major restructuring, in order to remain afloat. It had borrowed tens of millions of dollars to expand. The economy had tanked and bare bones fitness centers started opening around town, some charging only $10 a month.
“Competition isn’t a bad thing, I want to be clear, if you’re ready for it and if you’re making the investments you need to make to stay strong," Tolan says. "And that was the tricky thing for us. That was the timing that just didn’t work because we’d assumed this debt and you don’t have anywhere to go once you have it."
Along with filing Chapter 11 bankruptcy, Tolan announced that the Y is looking to unload six of its 12 properties.
“We have three that we are in conversation with, with the Waukesha Y. One with the Kettle Moraine Y. We are seeking a new owner and operator for our South Shore Y," Tolan says. "And we have a parcel of land that doesn’t have any real estate on it in Franklin."
The Y says it will continue offering all its summer and after-school programs in Milwaukee. Eventually, it wants to sell its downtown Milwaukee facility and open an alternative one in town, and it will not operate its John C. Cudahy site during fall, winter and spring. It will offer programming only in summer.
“By selling most of our owned assets and truly limiting our real estate and those obligations that we have, we are much more adaptable," Tolan says. "We have a lot more flexibility to respond to the community’s priorities."
Tolan says while the changes are underway, the Y will remain open for business.