South St. Paul is mulling whether to pull out of the fitness business at Central Square, the city’s community center that it shares with the school district.
City and school officials say the idea, which came up as they prepared for the July 6 reopening of the center amid the coronavirus pandemic, is being driven by several factors: declining membership and revenue; increased competition in the fitness marketplace; and added budget pressures caused by the pandemic.
“Obviously, the coronavirus impact has been huge to all gyms, fitness areas,” said Joel Hanson, city administrator. “But even before that there were challenges from decreasing enrollments. And so this is kind of an evaluation of: Is this feasible to operate for the long term? Is it sustainable?”
The community center is run by the city’s parks and recreation department, and South St. Paul Schools owns the building. The center, which is on the middle school and high school campus, opened in 2002 after residents approved a bond referendum that allocated $1.7 million for a renovation of the building and adding more space to it.
At the time, only a few fitness opportunities were available in the community: Curves, which serves a female-only clientele; the West St. Paul YMCA; and The Grove Aquatic & Fitness Center at the Inver Grove Heights community center.
But in recent years, corporate fitness chains Anytime Fitness, LA Fitness and Planet Fitness moved into neighboring West St. Paul.
“When LA Fitness opened up, we saw a little bit of an impact, but their membership prices were pretty close to ours,” said Chris Esser, South St. Paul’s parks and recreation director. “When Planet Fitness opened up, that was a game-changer just because they offer very deeply-discounted membership prices compared to what we have.”
DECLINING MEMBERSHIPS, REVENUE
The market pressure has forced the Central Square Community Center board of directors to put a hold on increasing membership pricing the past five years, Esser said. Even with that, along with adopting several fitness reimbursement and senior fitness program incentives, memberships continue to decline.
The core operation of Central Square is dependent upon membership and program revenue. Memberships hit a peak in 2013 at 1,002 and have steadily declined since. Last year ended with 692 memberships, a 31 percent decrease from 2013; revenue was $139,491, a 22 percent decrease from that year.
While Central Square revenue continues to decline, operating costs are incrementally increasing due to inflation and regular costs, Esser said. To sustain the future of the center, increased taxpayer subsidy is likely needed, he said.
Under the 2002 joint powers agreement, the city does not pay rent or contribute to utility costs — a situation that has allowed Central Square to operate in the black the past 15 years, Esser said.
“But if we had been paying rent, if we had to pay for utilities,” he said, “our membership fees would be more than they are and I think we would have had this conversation long before now.”
SENIOR PROGRAMMING SHOULD REMAIN
Esser said a look at the center’s future also makes sense now because the school district plans to move its alternative high school, Community Learning Center, from Doug Woog Arena and into a renovated office building off Thompson Avenue this fall. That will allow the parks and recreation department to move back into the arena, where it operated for many years prior to 2002.
South St. Paul Schools Superintendent Dave Webb said any decision about the future of the community center will be made in unison with the city.
City Administrator Hanson said that when the city council discussed the community center’s future at a work session last month, the consensus was that any further talk should also center on making sure that senior programming does not go away. The school district runs senior programming at the center through community education.
Webb echoed that thought.
“We’re still going to do senior programming,” he said. “We’re still going to do early (education) programming. We’re planning to continue to serve the community and the city regardless of what this decision ends up being.”
Esser said he is scheduled to introduce the idea to the school board at its July 27 meeting.
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South St. Paul considering shutting down its fitness business at community center - TwinCities.com-Pioneer Press
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