The YMCA of Metropolitan Milwaukee announced it will close its South Shore YMCA, a facility in the southern Milwaukee suburb of Cudahy, as part of a restructuring plan after a bankruptcy filing in June 2014.
The Milwaukee Y published a restructuring plan in December 2014 that calls for it to establish an organization comprised of centers in or close to the city of Milwaukee and sell off the majority of its non-Milwaukee real estate, including the South Shore Center, to pay down debt. In June, the Y said its debt exceeded $29 million on $37 million in budgeted revenue and EBIDA (earnings before interest, depreciation and amortization) of $950,000.
According to an article in the Milwaukee Journal-Sentinel, the YMCA first tried to sell the facility, a 54,000-square-foot complex that includes a swimming pool, but no buyers came forward. One deterrent may have been the agency's own estimate of deferred maintenance costs of $800,000 and the $2 million cost to upgrade the facility.
A hearing on the Milwaukee Y's restructuring plan is scheduled for Jan. 30 in U.S. Bankruptcy Court in Milwaukee.
The reorganization plan calls for the YMCA to pay $9.2 million to BMO Harris Bank. In addition, it will transfer the three remaining properties to be sold to a trust controlled by the bank.
BMO Harris is among a group of lenders that had lent the YMCA $30 million to upgrade and expand facilities dating to the 1990s. It is owed the most among the bankruptcy creditors.
As part of the plan, the YMCA will retain its $7 million endowment.
The unsecured creditors would receive at least 90 cents on the dollar, and some would be made "entirely whole," Tolan said in the Journal-Sentinel article.