VA Supreme Court to hear YMCA case of fitness clubs vs. Albemarle

By Brian Wheeler

Charlottesville Tomorrow

Monday, August 22, 2011

The Virginia Supreme Court has decided to hear arguments in a lawsuit brought by a coalition of fitness clubs challenging Albemarle County’s investment in the Piedmont Family YMCA facility in McIntire Park.

While the YMCA is not party to the lawsuit, its leaders said Monday that the court case has just caused them to lose their general contractor and a very competitive bid. Groundbreaking on the almost $14 million 77,000-square-foot aquatics and fitness center had been scheduled to begin in September or October.

“Not in our wildest dreams did we think the Supreme Court would accept this case,” said Denny Blank, CEO of the Piedmont Family YMCA. “[ACAC owner] Phil Wendell told us all he wanted was his day in local court. He said he would step aside if the courts didn’t rule in his favor, but he is not happy with that and has appealed it.”

Blank says the legal fight has put the YMCA project in jeopardy.

“The contractor has said their bid price is now null and void,” Blank said. “You can’t expect a contractor to hold their bid price indefinitely and the banks are saying they will only lend the money when the lawsuits are resolved.”

The Charlottesville Area Fitness Club Owners’ Association, formed specifically for the legal fight which began in 2010, is composed of ACAC Fitness & Wellness Centers and Gold’s Gym.

The suit maintains that Albemarle and the city of Charlottesville violated the Virginia Public Procurement Act by not giving the clubs the option of bidding on the aquatic services that will be offered by the YMCA.

“The Supreme Court saw fit to hear our arguments, and they saw some merit in the arguments that we were making against the county that they did not follow the Virginia Public Procurement Act,” said Greg Wells, CEO of ACAC. “It just means they will hear the case, it doesn’t mean that it will be decided in our favor or the county’s favor.”

Total Performance Sports and Fitness was previously involved in the lawsuit. Its owner, Todd Proctor, said in an interview Monday that he withdrew from the lawsuit shortly after Charlottesville Circuit Court Judge Cheryl Higgins dismissed the case against Charlottesville in April.

The city has designated $ million for construction of the pool and signed a 40-year lease with the YMCA for $1 a year for the building site. Albemarle is expected to contribute $ million to the project.

Greg Kamptner, deputy attorney for Albemarle County, said he expected the case to be scheduled for oral arguments in the spring. An appeal of the case against the city of Charlottesville could still be heard separately.

“The case presents some interesting issues because they raised a Dillon Rule challenge to the board’s actions, and those cases are always interesting,” Kamptner said.

Under the Dillon Rule, local government only has the power given to it by the General Assembly. He said the case against Albemarle was narrowly focused on whether the donation could be tied to a specific use agreement.

“The fitness clubs argue that the board of supervisors didn’t have the authority to make the charitable contribution to the YMCA subject to a written agreement,” Kamptner said. “The court has seemed to have an interest in Dillon Rule cases in recent years and this case does present a unique challenge to the board’s authority.”

YMCA officials say the cost to build the fitness center will likely increase and that other non-profits funded by local government could face consequences if the fitness clubs prevail.

“It came in under $14 million, which means we could do a lot more for a lot less if we act now,” Blank said. “It may be back to $16 million or more if we come back to this a year from now.”

“It’s time for the public to get outraged that one man has set about blocking this project for personal greed,” Blank said. “We have been trying to take the high ground and not mention his name, but now it’s really hurting us badly because we have lost our contractor and we have lost this price.”

“I don’t think the comment justifies any reaction,” responded the ACAC’s Wells. “I think it’s just a very inappropriate comment for him to make.”

Wells added that his organization supports what the YMCA does and that his own children have participated in YMCA youth basketball and soccer. He said ACAC was concerned about the use of taxpayer dollars to support a project that was not open to a competitive bid.

“The crux of the whole issue is that we were unjustly and unfairly denied the opportunity to participate,” Wells said. “Other solutions may rear their head that would actually be better than the currently proposed YMCA, and you save a park.”

Blank maintains the YMCA will not negatively impact other activities in the city’s McIntire Park and that the facility’s clientele is different from the for-profit fitness clubs.

“Our customers are lower to middle class, people who cannot afford to get these services elsewhere,” Blank said. “We are not a chain like ACAC or a franchise like Gold’s Gym — we are owned and funded by the community with a volunteer board and volunteers on staff.”