Preliminary Next, YMCA lease pacts reviewed

By Grace Lovins

Continuing the extensive work of establishing a new community center and home for Birmingham Next senior services, the Birmingham City Commission discussed drafts of a lease agreement between both the city and Next and the city and the YMCA for the building during the Monday, January 27, meeting.

Establishing a new home for Next senior services has been in the works for years, recently gaining significant momentum with the city’s purchase of the Birmingham MCA building in July of 2023. Since then, the city has determined that the building will house Next and YMCA operations as well as community space for Birmingham residents.

One of the city’s next steps is to create a lease agreement with both tenants that will operate out of the building. City manager Jana Ecker kicked off the presentation of the agreements by informing the commission that city staff were not seeking approval just yet. She said that with the programming, square footage assignment and the like still in the works, it’s too soon for the commission to approve a lease agreement.

Instead, staff members were looking for commission input on whether the lease agreements included what the commission had pictured.

Starting with the agreement between the city and Next, Ecker said the draft was predicated on the original memorandum of understanding that said Next would contribute $500,000 toward the purchase of the property in exchange for $1 rent thereafter. Next will also not be paying for their operating expenses as the YMCA has agreed to cover the operating expenses for the building as a whole.

Because of the city’s contributions toward getting Next a new home, said Ecker, changes to an interlocal agreement between Birmingham, Bingham Farms, Franklin and Beverly Hills—other communities assisting with the cost of NEXT operations—have been verbally agreed upon. The city will no longer be contributing $125,000 per year from the general fund to Next, per the draft agreement.

Instead, the monetary contributions will increase from the three other communities ensuring Next has a steady influx of money for program operations. Also, with the assumption that a bond proposal for the new center passes this year, Birmingham residents will have a decreased membership fee for both Next and the YMCA.

The draft agreement with the YMCA shows a starting lease of 20 years with the potential for 10-year extensions. The YMCA will manage, operate and staff the building, Ecker said, but a provision is included to develop a capital reserve fund at $25,000 per year with a max of $250,000. This fund will be used toward the pool should the YMCA decide to terminate their lease and the city takes over the pool maintenance.

Since the YMCA is offering to cover the operating expenses for the whole building, the organization would also contribute $1 in rent, the same as Next. Both agreements include a bond contingency giving the city authority to declare the agreements null and void should a bond ballot proposal fail.

The commission collectively agreed to suggest to city staff that the Next agreement should not be in perpetuity; the city considers that Next have some financial contribution on an annual basis beyond paying building operating expenses; have an increased and more well-defined community use; and the city should not have any additional cost for staff.

On top of these, there was also consensus that the city ought to have oversight of the operations of Next, meaning that the senior group should provide reports since the city is contracting them to provide services for seniors.

No formal action was taken to approve the lease agreements. Ecker said that the commission can expect to see lease revisions at a future meeting.