The YMCA of Greater Pittsburgh has filed for a formal reorganization under Chapter 11 in U.S Bankruptcy Court for the Western District of Pennsylvania. The Pittsburgh, Pa.-based Y plans to close two facilities next month but is still responsible for about $75 million in net physical assets, about 25 percent more than a typical YMCA of its size.
In its bankruptcy filing on Wednesday, the Y estimated that it had liabilities between $10 million and $50 million and assets of $75 million. Closing its Downtown Y facility will save between $750,000 and $1 million annually. The Y reported total revenue of $39 million, with expenses of $38.6 million, and net assets of $61.5 million, for the year ending March 2016, according to the most recent Form 990 available.
Y President & CEO Kevin Bolding said during a press conference that the organization has made some difficult decisions in an effort to right the ship over the years, including closing underperforming centers, deferring maintenance, hiring and wage freezes, selling properties and reducing part- and full-time positions.
Still facing organizational challenges, the Y scaled back programs due to the heavy weight of its asset portfolio and is struggling to properly invest in its properties, people and communities, Bolding said. “We’ve been consolidating our brick and mortar footprint with some success, including our recently announced planned closure of the Delmont branch next month, however, this restructuring process is necessary to continue our progress.”
The Pittsburgh Y has gotten away from its roots as a membership-based organization, according to Bolding. Membership accounts for 30 percent of revenue, a number that should be closer to 40 percent. The Y will continue to deliver services and programs people expect, he said, with the exception of the downtown fitness facility.
The Downtown Y fitness facility will close on June 8 because operating costs and rent exceed revenue and the Y also recently decided to not renew the lease on its Delmont Branch, which will close June 29. The moves will leave the Y with 11 facilities. In 2016, the Y’s Hazelwood branch closed with programming transferred to a neighborhood community center.
Director of Communications Pamela Haley said the organization hopes the bankruptcy process will take about six to nine months. Reorganization will allow the Y to exit the lease on its downtown facility — which is unsustainable but runs several more years — but also re-evaluate all of its operations, she added.
The Pittsburgh YMCA has 80,000 members in all. There are 2,000 active members of the downtown facility, about 20 percent of which use it as a second fitness center under the membership’s reciprocity program. Of the 100 employees at the location, about 90 are part-time and work at other YMCA facilities. The plan is to transition as many directly affected members and employees from the Downtown Y as possible within its network of 11 facilities.
Overall, the Pittsburgh Y has 200 full-time employees and about 1,240 part-time employees. The Greater Pittsburgh YMCA is one of 2,700 nationwide that employ about 20,000 full-time staff and 600,000 volunteers in all.
The Forbes Funds announced it has reached out to offer assistance following the Y’s announcement. Staff will meet with YMCA officials to determine how best to assist the organization as it works to adjust its operations. The Forbes Funds will offer its Nonprofit Health Screening tool to the Y as part of an assessment to determine the need for outside resources and expertise.
The YMCA’s board and staff are “addressing problems directly and publicly and we want to be a useful resource to help the agency emerge from this period stronger and with a greater focus on serving its mission,” Forbes Funds President and CEO Fred Brown said in a statement.