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Challenge Still on in Tennessee

NASHVILLE, TN — The six-year battle between the YMCA of Middle Tennessee and the Club Athletics and Fitness hasn't come to a close despite a local court's decision to uphold the finding that the YMCA qualifies to receive property tax exemptions.

The Davidson County Chancery Court upheld a January ruling by the Tennessee State Board of Equalization, which determines the tax status of organizations in the state, that the YMCA is entitled to property tax exemption based on state law. A state law passed in 2000 and lobbied for by the YMCA defines a family wellness center and clarifies that if a not-for-profit that meets certain requirements owns a family wellness center, the center is exempt from property taxes, said Phil Newman, spokesperson for the YMCA of Middle Tennessee.

“One effect of the law is that it prevents unnecessary, costly appearances before the Board of Equalization,” Newman said.

Club Athletics and Fitness plans to appeal the court's ruling, said Mark Page, CEO of the club, which has four locations in the Nashville area. (As of press time, an appeal had not been filed.) Page argued that the YMCA, which operates 23 centers and 321 program locations in the Nashville area, violated the tax-exempt status with its fitness centers.

“They do some good things, but there's a big piece that the Y does that directly lines up with what we do,” said Page. Page pays $40,000 per year in property taxes on his 2,000-member Green Hills club. That is $40,000 that the YMCA doesn't have to pay on its 13,500-member Green Hills location or any other location, Page said. The YMCA can then put that “saved” money towards new equipment, expansion and advertising, he said.

Besides, he charged, a large percentage of the YMCA's facilities is dedicated to commercialized fitness. The Green Hills YMCA recently added 7,900 square feet to its wellness center, Newman said. The wellness center occupies 19,000 of the facility's 110,000 square feet of space (about 17 percent of the space).

“Exercise equipment requires proportionally more space than many of the other programs and services we offer so square footage alone is not an indicator of the extent or reach of our programs,” Newman said.

Tennessee law requires organizations to meet at least five of eight require-ments to receive property tax exemp-tions. The YMCA meets all eight requirements, said Newman. One of those requirements is that the group has a history of helping people who have limited income. Twenty-five percent of the members of the YMCA of Middle Tennessee were on some form of financial assistance, and last year 48 percent of new members were on financial support, Newman said.

“No matter what happens, we are going to focus on what we do here,” said Newman. “We reach 164,000 lives through all kinds of life-changing programs and services. We just want to focus on our mission.”

Page said he doesn't want the YMCA to go away, “we just think where they go after the commercial market, it should be level.”

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