City of South Miami, YMCA in legal battle over lease

By Madison Fantozzi

This story published in Miami Herald’s South Miami Neighbors on Thursday October 10, 2013. You can also read online:

The YMCA of Greater Miami was enjoying an annual $1 rent to the city of South Miami at Downrite Park before, it claims, “the parties’ relationship began to sour.”

Now South Miami is suing for money damages due to the YMCA’s alleged breach of its lease.

The YMCA’s response: a counterclaim in excess of $1 million.

The case is now in discovery, meaning the two sides are exchanging information in anticipation of a future trial.

South Miami filed a complaint in January after it says the YMCA failed to construct a new community center as part of its lease agreement.

The lease agreement states that if the YMCA elected not to build a new community center, it would need to make $20,000 yearly payments for maintenance.

However, the YMCA said it did not “elect” to not build a new community center.

In fact, the YMCA claims a new center remains a critical part of its strategic plan, but the city failed to uphold its end of the agreement — to obtain financing for the community center from the Florida League of Cities.

The YMCA filed its counterclaim “for damages caused by the knowing wrongful conduct of South Miami, which breached the lease agreement … and then attempted to camouflage its breaches.”

“We have a sense that there were political considerations apart from the YMCA,” said the YMCA’s attorney, Michael C. Foster. “The change in tenor happened when there was a change in administration of South Miami.”

The lease agreement came in December 2005 after the parties bargained: The YMCA sold the park to South Miami at a discounted price of $2.75 million and in turn, the city leased the park back to the YMCA for $1 per year.

The parties also created a five-year plan: The YMCA would either construct a new community center using funds obtained by South Miami and pay the debt using membership revenue, or it would elect not to construct a new center and pay the annual $20,000.

In 2007, the YMCA began plans to build the new community center. It said the city refused to participate in the process.

In March 2009, the YMCA received a letter from South Miami that claimed the association was in default of the lease agreement because of its demolition of the park’s original facilities following Hurricane Wilma — “a simply breathtaking claim,” according to the YMCA.

Foster said the facilities were demolished at the approval and direction of the city.

“To be clear: South Miami purports to seek maintenance costs for buildings it knows do not exist,” the YMCA’s counterclaim states.

But City Attorney Thomas Pepe said the old structure was demolished with the understanding that the YMCA would build a new structure.

While South Miami is suing for the YMCA’s failure to build a new community center, the YMCA’s counterclaim says the city was unwilling to “even attempt” to obtain any funding.

Pepe said the city was not required to seek out any funding before the YMCA proved that the venture was economically feasible, which he said the YMCA failed to do.

The YMCA said it determined that the new community center was viable, but Pepe said this was a misrepresentation.

According to Pepe, the feasibility study states that 2,000 to 2,500 household memberships would be required for viable financial support. “It’s not even talking about the repayment of debt, just to sustain itself,” Pepe said.

“Why would the city try to obtain an $8 million loan to benefit the YMCA when the city would have to pay?”

Pepe said the feasibility study concluded that the project was questionable. According to Foster, however, the center was indeed viable.

“Viability was not the issue, financing by the city was the problem,” Foster said.

The YMCA states in its counterclaim that “South Miami’s real intention — to pressure the YMCA to leave Downrite Park and thus enjoy the benefit of the park which was acquired at a substantially discounted price.”

The YMCA has since abandoned the property.

YMCA spokeswoman Charlotte Donn said the city limited the YMCA’s access to the park, so that it could no longer operate its programs.

“You see an example of what South Miami could have had at YMCA’s South Dade center — a beautiful center with a great health club and summer programs,” Foster said, referring to a new facility recently opened near Pinecrest. “The city has to justify its conduct because it has not provided this to its constituents.”

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