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Council grants gymnastics club loan

Posted on January 9, 2014 by Taber Times

The town has agreed in principle to providing a loan to the Taber Gymnastics Fitness Club (TGFC) for construction of a proposed gymnastics building to be located in downtown Taber.

At the town’s December meeting, council voted unanimously to approve a loan, contingent on administration negotiating a draft agreement with the club for council consideration. A total figure for the loan was only discussed briefly at the meeting, and will also be subject to negotiation.

At its Nov. 25 meeting, town council heard a request from the Taber Gymnastics Fitness Club for support for a new gymnastics building. The total estimated cost of the proposed facility was $535,500 (which includes two lots previously purchased by the TGFC for $100,000). The TGFC was seeking $276,250, or 65 per cent of the project cost, from the Town of Taber for construction of the project. Based on a percentage breakdown of student participation in classes offered by the TGFC (65 per cent Taber and 35 per cent M.D. of Taber), the club was also seeking 35 per cent of funding for the project from the M.D. of Taber, at a cost of $148,750.

Following discussions at the Nov. 25 meeting, the TGFC indicated it would be willing to accept a loan from the Town of Taber for the project rather than a direct grant, and that it would be willing to put up its $100,000 lot as collateral.

At the Dec. 16 meeting, Coun. Rick Popadynetz was initially in favour of offering the club a grant rather than a loan.

“I could very well support a grant, once they’ve secured some funding for this. Once they’ve secured funding, I think it would be a good investment and good decision for all the taxpayers to provide a grant to this organization.”

Problems currently faced by the TGFC in the current town auditorium facility include a lack of storage, issues involving stress to equipment with set-up and take-down, an inability to set up certain equipment due to the limitations of temporary use of the current facility, past problems pertaining to equipment with regard to other renters of the auditorium.

Also, there is the lack of a foam pit for the progressing of gymnastic skill development.

After exhausting a variety of possible facility options, the TGFC decided upon the construction of their own facility located in the downtown area. The TGFC researched where the best location would be, and decided upon the purchase of two vacant lots located at 5336 48th Avenue for $100,000.

Coun. Joe Strojwas was not in favour of offering a loan to the organization, suggesting purchasing the TGFC’s lot would be mutually beneficial to both parties.

“I believe the town should treat this as another piece of land that the town owns, like the curling club, the golf club, the sportsfields — I would be in favour of the town purchasing the property from them, retaining control of the property, leasing it back to them at a $1 per year, so they could take that $100,000 and get matching grants through different grant organizations that work in that respect. Giving the town the control of the land, should anything ever default in the future, the town would then own the property, the building and all. This is one way for the town to ensure the project stays in the town, rather than going through the bankruptcy courts should something ever go wrong.”

Coun. Laura Ross-Giroux disagreed with Coun. Strojwas’ recommendation, suggesting the TGFC might view this as unwarranted interference with their autonomy.

“I have to disagree there a bit with you. I think we have to check with the gymnastics club to see if that were something they would be agreeable to. I think they might perhaps see their club autonomy threatened by the town. I think this is something we would have to discuss with the club first.”

Coun. Strojwas was adamant allowing the club to seek their own grant opportunities would be the best approach.

“I’ve done some research with the gymnastics club. They approached the town years ago, and what they wanted at the time was for the town to donate some land to them so they could build a building on town land. So they are in favour of building a building on town land, they just need the building specifically designed for gymnastics. They handle a lot of kids, and this is another kid’s project. Anything we can do to facilitate kids — sportsfields, gymnastics — we need to find a way to make this happen as expeditiously as possible.”

Allowing the club to maintain their autonomy through the construction of their own facility, Coun. Randy Sparks pushed for a loan option from the town, rather than taking a direct financial interest in the proposed project.

“I certainly support this, but I certainly cannot support it in the way that Councillor Strojwas has expressed at this time. I think it would be in the best interest for the town to provide a loan. Their committee was here, and said they were favourable if the town would provide a loan, or make a loan available to them. They also said they had paid $100,000 for that lot, but they would also turn that over to the town, because in discussions with them, I was very adamant to the point for the town to make a financial contribution to a piece of land or a group that the town does not own.”

Coun. Sparks went on to point out the TGFC had indicated they would be willing to turn their lot over to the town under certain circumstances.

“They are willing to turn this over to the town, this lot, if the town can give them a loan so they can pay this. All that is going to happen is the town is fronting this money for them so they can get this project going. I do not believe it is in the town’s best interest to give any kind of a financial contribution. I believe it is in the town’s best interest to provide a loan for them that they can repay back, with stipulations in the loan that if they default over a certain period of time, this facility is the town’s.”

Simply offering up a direct financial contribution to the project would be a dangerous precedent to set in light of other groups seeking funding from the municipality, added Coun. Sparks.

“There are groups within the town that are paying a very special interest to what council does with this, because if the town just gives it to the gymnastics club — be prepared, because there’s a lot more that are going to come with the same type of proposal, that are looking at this with great interest. I believe it’s up to the gymnastics club to do their best, and to fight hard to repay a loan back to the town. I support them having their own facility — they want to have autonomy, they want to be in charge of this facility — not have the town over them. The only way the town can not be over them is in fronting them a loan. That’s what I can support at this time, no other way. I believe that we would really open a can of worms if we were to give them the donation that they previously asked.”

If the facility was constructed on town-owned land, Coun. Popadynetz was  concerned over the potential maintenance costs for the building once constructed, and whether this would become a burden to the town.

“One concern I would have is the maintenance costs. It’s always very easy to build a building, it’s just maintaining it, and if it would be a burden to the town. If we’re going to bring this back, I would like to see some projected or forecasted labour costs for maintenance of this facility, just so we have it on our plate, so we know and understand what we’re getting ourselves into before we get ourselves into this project. I can agree we need to get the club back for answers, because our administration doesn’t have the answers.

Other facilities in the community constructed on town-owned property are responsible for their own maintenance, according to Coun. Strojwas.

“Just another footnote. I believe the town owns the Agri-Plex site, and we’re not involved in the facility costs there. The golf course, we’re not involved with the facility costs there. I’m just wondering if it would fit in those categories there, as far as the maintenance of the facility.”

Coun. Ross-Giroux indicated this wasn’t always the case.

“The town also owns the library and does the maintenance. It goes both ways.”

Coun. Strojwas continued to advocate for purchasing the TGFC’s lot, theoretically freeing dollars for matching grants for the organization.

“The thing is, if they don’t have the dollars, they can’t get matching grants.  Purchasing the land and giving them $100,000 would effectively give them $200,000 through matching grants. I’m not a grant writer, but I understand this is the way it works. If you go out and fundraise, you’ve got to have a pot before you can get a matching grant. In that case there, I reiterate if the town gives them $100,000, the M.D. of Taber gives them some money, that in essence doubles their money for them. That would help them realize their goal, rather than just giving them a bank debenture, a $450,000 loan. This helps them realize their goal a whole heck of lot quicker, and gives them access to grant money in the hundreds of thousands of dollars that they would not qualify for without this money.”

Warning that grants are not always guaranteed, Coun. Popadynetz suggested speaking with the club again in future to clarify a number of positions.

“To assume that they’re going to get these grants isn’t something that we should bank on. Unfortunately, I think we should move on with this until we can get a chance to talk with the gymnastics club and get a little more information.”

Coun. Sparks suggested a debenture to the TGFC, under conditions, would be the best approach to getting the project started immediately.

“If the gymnastics club had the assets necessary, they wouldn’t need to come to the Town of Taber. They’re coming to the Town of Taber because they want this project to be underway. They don’t need to be waiting around for grants. They can apply for those grants at a later time if they need additional equipment. They want to get this project going — they have a lot, all they’re asking the town is for a loan. Regardless of whether they turn that lot over or use it as collateral, I think it’s in our best interest to get this project underway.”

Details for the loan can be worked out in future, according to Coun. Sparks, suggesting the project needs to be expedited.

“Consultation with them can carry on, regardless if there’s motion put forward to give them a loan. This needs to be expedited — it was brought up that this was brought before council a few years ago. If you remember their presentation, they have definitely lessened the scope of what they are asking the Town of Taber for. This is a much different project. The previous project was much more grandiose that what they’re asking for now. I would prefer to get this project going with a loan from the town.”

Mayor Henk De Vlieger supported the motion to offer the club a loan for the project, contingent on negotiation in future.

“I would like to add that by making this motion, there is still room for negotiation, and some of what has taken place in this discussion can still be incorporated as we negotiate.”

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