Proposed Purchase of Westhills Langford Aquatic Centre

EXECUTIVE SUMMARY:

Further to the Staff Reports to Council dated November 18, 2024, and December 2, 2024, this report responds to the questions raised by the public from December 2, 2024 to December 8, 2024.
Staff have made the relevant reports received with respect to the proposed purchase of the Westhills Langford Aquatic Centre during the due diligence period of February 2023 to current available through LetsChatLangford.ca to support the context of this report.

BACKGROUND:

At the meetings held November 4, and November 18, 2024, Council received presentations from Colliers Project Leaders (Colliers) detailing the summary of due diligence work regarding the potential decision to purchase the Westhills Langford Aquatic Centre. The scope of these presentations has included a detailed walkthrough of the City’s due diligence in anticipation of Westhills Land Corp’s (Westhills) offer to sell the building and 186 parking stalls of the adjacent parking lot (see Colliers’ presentation on November 4, 2024, available on LetsChatLangford.ca and in past agendas), along with addressing questions raised by the public and Council.

On November 18, 2024, Council received a presentation from Colliers detailing responses to public feedback relating to the scope of Colliers’ work (see Colliers’ presentations available on LetsChatLangford.ca and in past agendas). Also on November 18, and December 2, 2024, staff provided a report that responded to questions from the public that were not included within Colliers’ scope of work.

In addition to Colliers’ presentations, the City has implemented the following strategies to inform the public about the decision before Council regarding the Westhills Langford Aquatic Centre:

• Created a project page on Let’s Chat Langford (the City’s public engagement platform).
• Issued multiple email newsletters to all subscribers of Let’s Chat Langford.
• Posted information on City social media accounts (Facebook and Instagram).
• Posted digital advertisements on digital billboards across the City.
• Placed print advertisements in the Goldstream Gazette.
• Placed poster board displays with detailed information at the Westhills YW/YMCA, the Greater Victoria Public Library - Langford Heritage Branch, the Victoria Conservatory of Music, Council Chambers, Langford City Hall, and at West Shore Parks and Recreation.
• Created a feature box on the City’s website homepage which links to Let’s Chat Langford.
• Issued a media release which garnered significant media interest and subsequent coverage by TV, digital, and print media.

In addition to the proactive communication efforts undertaken by the City, residents were encouraged to submit their feedback via email at LetsChat@Langford.ca on or before December 8, 2024. This report addresses new questions received from the public between December 2 and December 8, 2024.

COMMENTARY:

How much, if any, of Langford’s subsidy to the YW/YMCA goes towards funding the other, non-pool related programs that the YMCA runs out of the building? How does Langford avoid subsidizing activities that YW/YMCA programs outside of Langford?

The City pays the subsidy of $1.9 million directly to Westhills to cover the lease costs. It should be noted that since 2016, the YW/YMCA has incurred approximately $10,000,000 in losses without the additional City subsidy, using its own funds to support community recreation in Langford. These losses were offset by funds originally intended for the YW/YMCA’s Greater Victoria community programs, as the YW/YMCA is not nationally funded and cannot draw on external financial resources. Looking forward, the City will ensure that the obligations contained within the existing service agreement are monitored and reported to Council, as appropriate.

If the City owned the building and pays all the operating costs (and there is no rent) what expenses will the “Y” s expense be other than staff and incidentals?

The City’s purchase of the aquatic facility does not alter the original agreements in place. The City will be named in place of Westhills on all agreements, assuming the associated responsibilities. For more detailed information regarding the responsibilities of the landlord and/or tenant, particularly in relation to the YW/YMCA, please see the Colliers Phase 1 Report – Commercial Review of the Lease Agreement.

When has the YW/YMCA indicated that they will default on their obligations?

The City of Langford Committee of the Whole agenda from February 27, 2023, contains an email from the YW/YMCA which reads:

Our Board met yesterday on January 26th and unanimously passed the following resolution: BE IT RESOLVED THAT due to ongoing financial deficits in the operation of the Westhills YMCA/YWCA facility in Langford (hereinafter “WHY”), the Board directs staff to initiate actions toward a facility closure starting March 31, 2023 unless, prior to March 31, 2023, the City of Langford commits to a further annual contribution of $950,000 which contribution shall be in addition to that required under the Services Agreement dated for reference February 7, 2013.

Further to that email, the YW/YMCA has not budgeted for facility lifecycle costs, which are estimated to be 14.8M over the next 17 years.

Why is the City not performing an analysis of the YW/YMCA’s operations before making a decision to purchase the building?

Ownership of the building and operation of the service are two separate issues. Irrespective of who owns the building, the YW/YMCA and the City are parties to a long-term service agreement to operate recreation services. While the City will engage with the YW/YMCA to review options with respect to what services are offered, hours of operation and possible changes, this review is not contingent on the City purchasing the building.

As noted in the December 2nd report to Council, the analysis by Colliers Project Leaders emphasizes the Status Quo – Default Scenario because it is the City’s understanding of how the current arrangement is most likely to evolve if the City does not purchase the building. This scenario was informed by the YW/YMCA’s historical financial performance and their inability to meet current financial obligations, including covering lifecycle costs. While it is possible to speculate on scenarios in which the YW/YMCA achieves improved financial and operational results, these are considered highly uncertain based on available data. The Status Quo – Default Scenario represents the City assuming 100% of the YW/YMCA’s financial lease obligations while the YW/YMCA continues to operate the facility, reflecting the likely financial pressures and outcomes given historical trends and contractual obligations.

Lastly, and as outlined in the December 2nd report to Council, the YW/YMCA, under the service agreement with the City, has sole authority to operate the facility in alignment with their charitable mission. Under the service agreement, all policy and governance matters related to the operation of the facility are the sole responsibility of the YW/YMCA.

The parking lot is split in two by a lane. Are both sides included in the sale?

The City of Langford would receive 186 parking stalls as part of this transaction. Please refer to the map below to show which stalls would be included.

FINANCIAL IMPLICATIONS:

The Financial Implications of the options available have been outlined in the presentations by Colliers and in the previously provided reports (available on LetsChatLangford.ca and in past agendas).

LEGAL IMPLICATIONS:

External legal counsel is engaged to ensure all aspects of the proposed purchase meet the requirements of provincial legislation as it relates to local governments.

OPTIONS:

Option 1

WHEREAS, local governments provide recreational services to the public, either directly or through a third party;

WHEREAS the City of Langford entered into a long-term tripartite agreement with Westhills Land Corporation and the YW/YMCA to provide public funding in support of the operation of the Westhills Langford Aquatic Centre;

WHEREAS Westhills Land Corp., owner of the Westhills Langford Aquatic Centre, wishes to transfer ownership of the Westhills Langford Aquatic Centre and the City wishes to ensure the continued public access to this important recreational asset; and

WHEREAS the City has fully explored the risks, benefits and long-term rewards, and has provided significant public input opportunities;

NOW THEREFORE, it is hereby resolved that Council approve the purchase of the Westhills Langford Aquatic Centre and the adjacent parking lands for a purchase price not to exceed $35,000,000 and authorize the Mayor and Chief Administrative Officer or Corporate Officer to execute all documents necessary to complete the purchase.

AND THAT Council direct staff to include this purchase and corresponding funding sources and funding requirements within the 2025-2029 Five Year Financial Plan as outlined in the presentation by Colliers and staff.

AND THAT Council of the City of Langford authorizes up to $20,000,000 be borrowed, under Section 175 of the Community Charter, from the Municipal Finance Authority, for the purpose of the purchase of the Westhills Langford Aquatic Centre and the adjacent parking lands;

AND THAT that the loan be repaid within five (5) years, with no rights of renewal.

OR Option 2

THAT Council does not proceed with the acquisition of the Westhills Langford Aquatic Centre and adjacent parking lands.

SUBMITTED BY:

Braden Hutchins, Deputy Chief Administrative Officer

Concurrence:
Donna Petrie, Senior Manager of Communications & Economic Development
Concurrence:
Yari Nielsen, Director of Parks, Recreation and Facilities
Concurrence:
Matthew Baldwin, RPP, MCIP, Director of Development Services
Concurrence:
Leah Stohmann, RPP, MCIP, Director of Community Planning and Climate Change
Concurrence:
Katelyn Balzer, P.Eng., Director of Engineering and Public Works
Concurrence:
Michael Dillabaugh, CPA, CA, Director of Finance
Concurrence:
Marie Watmough, Director of Legislative & Protective Services
Concurrence:
Darren Kiedyk, Chief Administrative Officer