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City more than doubles rent for Glacier Gymnastics Club in order to help pay Civic costs

Under the policy, tenants, like Glacier Gymnastics Club which rent space in the Civic Centre, are also responsible for taxes, water, sewer, all utilities, repairs and maintenance. — The Nelson Daily photo

In an effort to help share the operational and maintenance costs of the aging Civic Centre after a lease agreement expired 10 years ago, the city has now levied a 221 per cent increase to the Glacier Gymnastics Club’s rent.

The city policy — called City-Owned Property Lease/Rental Fees — now requires that rental fees should be five per cent of the assessed value of the lands and improvements (for non-profit organizations).

Under the policy, tenants are also responsible for taxes, water, sewer, all utilities, repairs and maintenance.

As a result, the city has hiked the rent on the Civic Centre gymnasium space from $19,000 to $42,000, in addition to the club now having to shell out for maintenance and operational costs.

It was a hard pill to swallow, and Glacier club manager Steve Long appeared before council and proposed a lease agreement that contained considerably less change in the arrangements — keeping the “License to Occupy” agreement structure — as well as asking the city to reconsider the proposed $23,000 increase in rent. 

The proposed increase is a 221 per cent jump in costs that can only be managed with a corressponding increase in user fees, he said.

“We will definitely have families who can no longer participate,” Long said.

That would affect the ability of the club to attain staffing goals, and would affect the sustainability of the current program levels.

And with the city’s new increase the average club fees would go up 30 per cent per child, said club board member Mike Finley.

“We are already at the edge of excluding a lot of lower income, single parent families, and we feel that is just one more barrier to kids not being able to participate,” he said.

Coun. Anna Purcell wondered if the Glacier case was an instance of the city getting in the way of citizens trying to do a good thing.

But nearly all of the other tenants in city-owned buildings are paying full utility costs, said city manager Kevin Cormack.

And what the club has been paying for rent has not covered what the city has been paying for hydro costs for over a decade, said city chief financial officer Colin McClure.

“So we are just getting them in line to pay what,” is owed, he said.

But the low rent the club has been paying for 15 years is the reason why the gymnastics club is the way it is, said Long, noting it has grown from 250-1,200 members in that time.

“It has afforded us an incredible opportunity, so we thank the city for that,” he said.

But a report released earlier in the year noted the extensive amount of work and maintenance the building needs, said Mayor Deb Kozak, and it won’t come cheap.

“Our poor old building is in great disrepair,” she said. “It’s a lovely building but we need to move ahead as well” and repair it.

The intent of the policy was to share heating and lighting costs, Kozak added, not to cause financial hardship.

Glacier Gymnastics Club has held a lease or licence with the city for rental of the Civic space since approximately 1992.

For a few years in early 2000 the club rented space at Selkirk College’s Tenth Street Campus in Mary Hall Gymnasium, but for all other years they have rented the space — known as the Badminton Hall — at the Civic Centre.

The city noted that the current agreement with the club expired in 2007 and that agreement has remained in place since that time. A city report noted that the terms of the expired agreement are:

  • Monthly rent $1,575 (the club has paid the same rent since 2004);
  • Pay costs of janitorial and minor maintenance; and
  • The city provide heat, light, water, sewer, garbage and taxation.

The city granted a permissive tax exemption to the club for 2017 and 2018.

While the Regional Recreation Plan was being drafted city staff did not move forward with terms of a new lease agreement until 2016. The plan was expected to provide future direction for the Civic Centre and was expected to impact the space leased by the club.

The new lease should not have come as a surprise to the club. In fact, in July 2016, city staff provided a draft copy of a new lease to the club that included a revised rental rate and operating and maintenance fees. 

However, operating and maintenance fees — which were not part of the previous agreement — have clouded any preliminary negotiations between the club and city staff when it came time to getting a deal done.

Doing the math

Do the formulas being used to calculate costs accurately reflect real usage?

What does $20,000 mean to families at Glacier Gymnastics Club?

  • A new floor project was $60,000 and it took three years to assemble the funds. The last phase cost $16,000 and was part of the Canada 150 project.
  • $20,000 is 50 per cent of the club’s normal B.C. Gaming Grant support.
  • $20,000 takes about two years worth of fundraising.
  • $20,000 can be used to initiate grant and funding projects with match funding requirements.

— Source: Glacier Gymnastics Club