McDermont operator seeks to buy facility | New
McDermont X, which operates the comprehensive recreation and event center of the same name in Lindsay, paid the town of Lindsay a payment of $100,000 with the intention of purchasing the facility.
McDermont X entered into a lease with the City of Lindsay in December 2017 to operate the facility. One of the options under this lease gives McDermont X the option to purchase the property.
As a condition of purchasing the property, the operator has the option of making a payment of $100,000 to the City of Lindsay demonstrating its intention to purchase the property and the operator has made that payment. An update on the operator’s agreement with the Town of Lindsay and the operator’s intention to purchase the property was presented at the Lindsay Town Council meeting on August 23.
At the council meeting, City Manager Joe Tanner said the city and the operator had two options when it came to renewing the lease for another five years. But no renewal was concluded and neither the city nor the operator asked for the renewal of the lease.
The operator elected to make the $100,000 payment instead. “They exercised that call option,” Tanner said at the meeting.
The purchase price will be determined by the property’s 2018 value, which is still being negotiated, Tanner said. The terms of the agreement call for the operator to make a payment of $100,000 each year until the property is paid off.
The City of Lindsay also had to take out a $1.8 million revenue bond to fund the facility in 2012. The city still owes $680,000 on this bond and is making payments of $190,000 annually on this bond . The deposit will be refunded by the city on December 15, 2026.
City council members expressed concern about the deal between the city and the operator because although the city is saddled with such a large debt on the facility, it has received few payments from the operator.
The lease requires the operator to provide the city with half of its profits. In 2018, the city received a $15,000 payment from the operator and received no payment from the operator in 2019 and 2020, Tanner said.
Outside of the $100,000 payment, the $15,000 payment is all the city has received, Tanner said. Alfredo Velasco, a McDermont X business partner, told the meeting that the facility made a profit of about $140,000 in 2021, but instead of paying the city about $70,000, it decided to exercise his option to purchase the property and pay the city $100,000.
When asked if the operator had honored its rental agreement, Tanner said: “I would say yes, they have fulfilled their obligations.”
But also talking about if there are any issues with the deal, Tanner said, “I would say there are a lot.”
It was noted at the meeting that the city attorney had not signed the agreement. Velasco noted that when its business partners entered into the lease, they were taking a risk the facility was losing thousands of dollars and was going to close.
As part of the agreement, the operator is only required to provide an annual profit report. The board expressed a need for more transparency, stating that they would like to receive a monthly or at least quarterly financial report from the operators.
Velasco said the operators are willing to work with the city on what is reported financially.
“That’s what we’re here for,” he said. “We have no problem submitting this. We want things to work. »
Velasco also expressed his wish to have better communication with the city. “A lot of your questions could have been answered if you had just asked them,” he said.
He added that he would like to make a presentation on the operations of the establishment to the board.
The facility has also received numerous state grants to help fund areas such as equipment and capital improvements.
And under the state’s surplus land law, the city must still make the property available for other purchase offers for areas such as affordable housing. At the meeting, no one else expressed interest in purchasing the property and the deadline for expressing interest is September 11.
After that, Tanner said, “we are free and clear of this process,” referring to the Surplus Land Act. The operators are also not subject to the Surplus Land Act when it comes to their efforts to purchase the property, Tanner said.
McDermont X offers many fitness, sports and league opportunities and can also be used for events such as birthday parties that are held at the facility. The facility includes a sports hall with multiple courts, indoor soccer fields and a running track.
Other features include a flowrider and a rock face. For more information visit mcdermontfieldhouse.com McDermont X is located at 365 N. Sweetbriar
Tanner said the continued operation of the facility is important to the Lindsay community. “We have a lot of people using this facility for sure,” he said.