YMCA shows its corporate muscle as it tries to elbow way into community

By Dan Frazier
Tea Party Editor  

This photo shows the forested property on the corner of Turquoise Drive and Cedar Avenue in West Flagstaff. The Flagstaff Family YMCA wants to build a multi-million dollar facility here.

A proposal to build a $3.5 million dollar YMCA facility in Flagstaff has sparked a months-long community-wide debate that will likely come to a head this month when the Flagstaff City Council votes on whether or not to give the YMCA five acres of city-owned land on the edge of McMillan Mesa.

 “Taking on the ‘Y’ is like taking on God, country and apple pie,” said Lynn White, president of the National Child Care Association. White was quoted in the 1997 book For a Good Cause? How Charitable Institutions Become Powerful Economic Bullies. The book, by John Hawks, devotes two pages to the YMCA.

The Young Men’s Christian Association has strayed far from its Christian roots, especially here in the U.S., where the “C” in YMCA might as well stand for “corporation.” Though the YMCA is classified as a nonprofit organization, and given a distinct tax advantage by the IRS, it operates using many of the same aggressive tactics used by many Fortune 500 companies. Indeed, Hawks figured that with its billions of dollars in revenues, the YMCA would be in the middle of the Fortune 500 rankings if it operated as a for-profit company. Though the YMCA does not publicize its combined revenues, and current figures are hard to find, 1996 combined revenues have been variously reported as $2.3 billion and $2.8 billion.

The Valley of the Sun YMCA, of which the Flagstaff Family YMCA is a chapter, had $28 million in revenue in 2000. Its current board of directors includes a surprising number of representatives from the biggest corporations in the state, including the senior vice president of Phelps Dodge Corp., the senior vice president of Bank of America, and the executive vice president of The Arizona Republic, among others.

The YMCA’s ties to corporate America run deep. It has “strategic alliances” with JC Penney’s, Pepsi, KFC, Hanes, and others. In February, some in Houston called on the YMCA to change the name of its newly opened Ken Lay YMCA, named after the recently disgraced Enron chairman. Lay had given the YMCA $1 million to help cover construction costs. Despite the Enron debacle, the YMCA refused to take Lay’s name off the building. “We’re standing by a longtime friend and supporter, but we’ve got our ear to the ground,” said Michael Hagan, the YMCA’s vice president of marketing.

 The YMCA boasts that “Together YMCAs make up the largest nonprofit community service organization in America.” Hawk reported in 1997 that the YMCA was “the nation’s largest operator of health clubs and one of the largest day-care providers.” Today, the YMCA boasts of being the “largest school-age child care provider in Arizona.”

The owners of competing health clubs as well as day care centers have been complaining about the YMCA’s unfair competitive advantage for years. A Lexis-Nexis search for the keywords “YMCA” and “unfair competition” turned up 212 news stories containing these words.

According to Hawk, “Figures cited by the Association for Quality Clubs, a national trade organization representing for-profit health club owners, claim that the YMCA’s tax-exempt operating privileges give the group a cost advantage over commercial competitors of as much as 30 percent. While the YMCA’s membership numbers rose 22 percent between 1990 and 1993, the comparable numbers at Bally’s — the country’s largest for-profit health club operation — dropped 9 percent.” There are numerous verifiable reports of health clubs around the country who lost hundreds of members following the opening of a YMCA in their neighborhood or community. Some of these clubs were ultimately forced to close.

Not only do YMCAs not pay taxes on most of the money they bring in, they routinely are given land by cash-strapped communities seeking recreation options for residents. Savvy developers, looking to add amenities to their developments without having to pay for construction, also frequently provide land for YMCAs. Partnerships with hospitals are not uncommon. It seems that the YMCA rarely, if ever, actually pays for land.

What makes matters worse for competing health clubs and day care facilities is that the YMCA almost always wants to build in affluent and middle-class neighborhoods, where they draw customers away from existing health clubs and day care facilities.

A story published in December 2001 in the Sarasota Herald-Tribune reported that the “International Health, Racket and Sportsclub Association, or IHRSA, argues that YMCAs should be stripped of their nonprofit status because they’re pushing into suburbs almost exclusively and hardly resemble the Ys of 50 or even 25 years ago, when the organization helped poor, mostly inner-city, children and teens.”

YMCA claim is questionable

The YMCA routinely deflects criticism of its recent practice of locating in more affluent areas by saying that it wants to “serve everyone, not just low-income people.” Often, YMCA representatives add that no one is ever turned away from the YMCA for an inability to pay.

But there may be exceptions to this rule. Gwen Engel, activities director for the Flagstaff Athletic Club, provided extensive documentation to the city  about the practices of the YMCA. Much of the information was apparently from the IHRSA, though Engel also did some independent investigating.

Engel wrote: “I was shocked when I called down to the YMCA in downtown Phoenix, also part of the Valley of the Sun Y, and found out how their sliding scale works. … When I questioned, “What if I only made $500 a month, would the fee be lessened?” he told me maybe I should focus my finances on food and shelter. I explained that I needed to work out at my doctor’s request. … He straight out told me, ‘The YMCA does not offer  free memberships,’ not even for trade of service.”

David Tores, the man Engel spoke to, also told Engel that a 50 percent discount was available to those making less than $1,100 a month, meaning low income individuals and families would pay $20 a month for membership.

According to the IHRSA, “On average only 10 percent of the regular members of the YMCA get any kind of discount. In most cases the figure is 5 percent or less.” The IHRSA also notes that in the 1950s the YMCA offered rooms for people to stay in. The practice began to end after the hotel industry successfully fought to have the YMCAs hotel-like operations taxed.

In 2000, courts in Milwaukee and Pittsburgh forced the Ys there to make payments in lieu of property taxes to those cities. The Flagstaff Athletic Club pays over $100,000 in property taxes each year on its two facilities. This figure is cited in a letter from FAC owner Jim Garretson sent to City Councilmembers and provided to FTP by the mayor’s office. The letter also states that FAC employs 160 people and has 11,000 members. The proposed Flagstaff YMCA anticipates having nearly 2,000 members by the end of its first year, and nearly 2,400 members by the end of its third year.

Garretson concluded his letter by saying, “As a taxpaying entity, I would hate to get into a competitive situation with the city (or YMCA) — both needless overlap and unfair competition, as the city (or Y), obviously doesn’t have to pay the taxes we do.”

Garretson is not alone in his concern. Drew Friend, representing The Firm; Stan Mish of Vertical Relief Rock Gym; and Jonathan Liddle of Flagstaff Gymnastics were all active panelists during the recent community discussion meetings about the proposed YMCA location. Garretson, Mish and Friend all abstained from the final vote in which the panel recommended the YMCA be allowed to build on city land at the corner of Turquoise Drive and Cedar Avenue. (See also the essay by former FAC co-owner Susie Garretson in the March 2002 issue of FTP.)

Conspicuously absent from the 15-member discussion panel was anyone representing the residents of the neighborhood where the YMCA wants to build its facility. As it happens, I live across the street from the site at Turquoise and Cedar that sits at the center of the storm. The forested property, on the edge of McMillan Mesa, is traversed by a section of the Flagstaff Urban Trail System.

In January, I circulated a petition among my neighbors in the Oak Park Manor Townhome complex. Through this process, and subsequent conversations with other neighbors, I concluded that 75 percent or more of the residents in the 40 or so townhomes at Oak Park Manor seemed to be opposed to the proposed location for the planned YMCA facility.

The Oak Park Manor Homeowner’s Association (which my wife and I are not actively involved in) wrote to the City Council in February citing its concerns about traffic impacts and the loss of open space. “The Board of Directors of Oak Park Manor Homeowner’s Association is of the unanimous opinion that it is premature for the city to approve a lease with the YMCA for this property at this time,” said the letter.

At one point, my wife spoke to YMCA board member Mike Sherwood about possibly having a meeting with Oak Park Manor residents about the YMCA. She even offered to host the meeting at our home. Sherwood seemed to like the idea, but we never heard back from the YMCA about the proposed meeting.

The YMCA’s efforts to involve the public in the decision-making process seem to be half-hearted at best. During the Jan. 28, 2002 City Council meeting at which the YMCA proposal was discussed, several audience members expressed surprise, saying they had learned of the proposal only recently.

Robyn Slayton-Martin, an Oak Park Manor resident, wrote to the Council that day, and said, “It appears the Y desires to shove this project down the throats of the city without ample input from its residents.”

Also that day, Irish Bork wrote to the Council about her experience on Dec. 6, 2001, when she attended a YMCA meeting about possible sites for the YMCA facility. “When I complimented the building and said what a great idea I thought it was, the Y board was very nice. However, when I respectfully asked them to consider building in another part of town instead of (the) Turquoise and Cedar open land parcel, they became hostile and impatient with me,” wrote Bork. Later in her letter she wrote, “They didn’t even want to hear the many compelling reasons why building their facility would actually do more for the community if it was located elsewhere in town.”

Subsequently, representatives of the YMCA expressed opposition to allowing the media to be on hand during facilitated community discussions about the YMCA proposal. Despite the YMCAs objections, the media was allowed to attend the discussions.

The YMCA has repeatedly referred to a telephone survey in support of its contention that the site at Turquoise and Cedar was one of the top rated sites of four it considered. The study has also been cited in support of other YMCA claims, including the claim that support for a YMCA in Flagstaff is four to five times higher than in other cities. However, the YMCA has refused to release the details of the study to the public, saying that it paid for the study, and therefore owns it. We do not know for instance what questions were asked during the telephone survey.

What is known is that the telephone survey was conducted by Winfield Consulting Group of Atlanta, a firm that works often with YMCAs across the country. On its Web site, Winfield noted that it had helped to answer these questions for a client: “What services do YMCA of San Francisco members most want in a new facility? What location and price will draw the most people paying the most money?”

Compare this to a statement made by Stu Warner, Valley of the Sun YMCA facilities development consultant. He made this statement at a Flagstaff Parks and Recreation Commission meeting held July 18, 2001: “We’re not out looking for what it is that we can charge; we’re looking at it from the standpoint of what people are wanting to pay that they would be comfortable with and for what services.”

Census data an eye-opener

At the recent facilitated community discussions about the YMCA, several people noted that the Knoles property, an alternative YMCA site favored by many residents, was probably closer to the center of Flagstaff. Or at least, closer to Flagstaff’s population center. Data from the U.S. Census Bureau tends to support this view.

The Knoles property is a 5-acre city-owned parcel on Fourth Street, just south of the old community college campus. The mostly undeveloped site was recently purchased by the city. It was not available when the YMCA did its market feasibility studies. Consequently, YMCA representatives have been reluctant to seriously consider the Knoles property. Another problem with the Knoles site is that it does not lend itself to partnership opportunities with Flagstaff Medical Center. An anticipated partnership between the YMCA and the hospital would make childcare and other services available to hospital employees.

The Knoles property is located on the line that divides Census tracts 3 and 4. To the west is tract 3, home to an estimated 6,763 people, according to figures from the 2000 Census. To the east is tract 4, with a population of 5,416 people. The Turquoise and Cedar property is in the southern half of Census tract 2. Tract 2 is home to 3,417 people. On maps, tract 2 appears to be about as big as tracts 3 and 4 combined.

Of the three tracts, tract 2 has the lowest number of people per square mile, averaging fewer than 1,238 per square mile. Tract 3 has more than double the density, with between 3,120 and 4,943 people per square mile.  Tract 4 has the highest density of all, with between 4,964 and 6,919 people per square mile.

Looking at the percentage of families in each tract that are home to children under 18, the Census statistics suggest that a YMCA would meet the needs of more children if it were located on the Knoles property. While only 26 percent of families in tract 2 (includes Turquoise and Cedar site) include children under 18, 42 percent of families in tract 3 and 40 percent of families in tract 4 include children. Furthermore, a greater percentage of households in tracts 3 and 4 are families, as defined by the Census, than in tract 2. Only 53 percent of households in tract 2 are families, while 68 percent of households in tract 3 and 74 percent of households in tract 4 are families.

In reviewing what has transpired in the long struggle to bring a YMCA to Flagstaff, I get the impression that some on the city staff and some members of the City Council have essentially been making backroom deals with the YMCA. In late January, the city drafted a lease agreement with the YMCA prior to any public discussion by the City Council. In February, just two weeks after a contentious City Council work session in which the YMCA proposal was discussed publicly for the first time by the Council, Mayor Joe Donaldson all but promised to give the YMCA city land, telling the Arizona Daily Sun, “Yes, we’re going to have a Y in Flagstaff. … We’re all pretty well committed to it. But the location seems to be what we have to decide on.” The statement was surprising considering that the City Council had not publicly made any commitments to the YMCA.

The Sun has joined the Chamber of Commerce and other business-as-usual organizations in supporting a YMCA at Turquoise and Cedar. Perhaps the reason for this has to do in part with the composition of the YMCA board, which is heavy with major players in Flagstaffbusiness community. Here is a sampling of the board’s 29 members:

Lavelle McCoy, president and CEO of McCoy Motors, former president of the Flagstaff New Car Dealers Association, major Daily Sun advertiser.

Chris Bavasi, lawyer, director of the federal office of Navajo and Hopi relocation, former mayor of Flagstaff (12 years), current mayoral candidate.

Steve Saville, former sales and marketing director of Flagstaff Publishing Company (publishes the Arizona Daily Sun, Flag Live! and Mountain Living), stepped down from FPC in October. Now with Albertson’s Food & Drug.

Tom DeStefano, president and CEO of Sedona Lake Houses.

Allen Ginsberg, works in insurance, real estate and property management.

Ingrid Nelson, general manager, KNAZ-TV.

Friends at the United Way

The connections between the YMCA and the United Way are also interesting. YMCAs across the country received about $94 million from United Way in 1999, or 2.6 percent of total revenue. In fact, the IHRSA has lobbied United Way chapters to “more closely scrutinize donations to YMCAs that offer state-of-the-art fitness facilities in middle class or affluent communities already served by for-profit clubs,” according to an article by Brian McCormick published in 2000. It is unclear if the effort had any lasting impact on the activities of the United Way.

In Flagstaff, a United Way representative was initially on the community discussion panel established to discuss the YMCA. But that representative, Executive Director Kerry Blume, stepped down during the first meeting, saying that the United Way had no position on the controversy.

On its Web site, the United Way of Northern Arizona (www.nazunitedway.org/) lists its board members. Two United Way board members are also on the YMCA board: Steve Saville and Ingrid Nelson. In addition, Bill Calloway, president of the local United Way chapter (as of October of last year), has lobbied the city for a YMCA at Turquoise and Cedar. As the plant manager of the Purina pet food plant in Flagstaff, he e-mailed the mayor Jan.  25, noting that the Ralston Purina Foundation had donated $25,000 to the YMCA. FTP has also learned that the Purina plant may be expanded, or perhaps closed, in the wake of a recent company merger.

Also, United Way board member Angela Creedon was on the YMCA community discussion panel representing Common Ground. Creedon strongly supported the YMCA and its favored building site.

United Way board member Joe Kortum happens to be the CEO of Northern Arizona Healthcare, parent company of Flagstaff Medical Center. Meanwhile, United Way board member Bruce Weisensel is the vice president of strategic planning for Northern Arizona Healthcare. And United Way board member Randi Rolle works at Flagstaff Medical Center.

Also on the United Way board is Roy Callaway, publisher of the Arizona Daily Sun. The Sun has published at least three official editorials supporting the YMCA proposal at Turquoise and Cedar.

And there is a representative of the U.S. Geological Survey, Patty Garcia, on the United Way board. The U.S.G.S. is located less than a mile from the proposed Turquoise and Cedar site. At least one high-ranking U.S.G.S. scientist has written to the City Council to advocate for building a YMCA at Turquoise and Cedar. However, this scientist appears not to have been writing on behalf of the U.S.G.S.

The City Council is expected to consider the recent recommendation of the community discussion panel regarding the YMCA this month. The panel, after weeks of sometimes heated wrangling, recommended that the city allow the YMCA to build its facility on the  Turquoise and Cedar property. The details of the lease agreement between the city and the YMCA were being worked out at press time. An early draft of the lease agreement called for the city to lease the land to the YMCA at a cost of $1 a year. In return, the YMCA would provide about $125,000 a year in free and discounted services to city residents. The final lease agreement may call for the YMCA to purchase the property, or for developer Stan Ritland, an ally of the Y, to give the city private land located elsewhere in the city. Ritland, who owns a number of other properties near the Turquoise and Cedar site, is expected to be involved in the negotiations and possible land trades. See related story on Page 18 for more about the panel’s recommendation and the possible lease arrangements.

The City Council may consider the panel’s recommendation as early as May 6 or 7. The Council will hold a work session at 4 p.m. May 6 and a regular Council meeting at 6 p.m. May 7.  For City Council agenda information, call 779-7685 ext. 201. Or visit www.flagstaff.az.gov.