Update: Westhills YW/YMCA Langford Aquatic Centre

Project Update: December 17, 2024

At the December 16th Council meeting, Langford Council voted unanimously to purchase the Westhills Langford Aquatic Centre and associated 186-space parking lot. The building is home to the YW/YMCA aquatic centre, a day care, the Greater Victoria Public Library, the Victoria Conservatory of Music, and Paradigm Orthodontics. The decision was made after a thorough due diligence process and several opportunities for public input. During deliberations Council emphasized the importance of offering a variety of recreational services for residents of all ages and stages of life. They noted that while recreation centres are not profitable, they are a fundamental part of local government services for residents.

The purchase price of the property is $35 million. The property's 2024 assessed value is $35,146,000 and the facility’s insured value is over $44 million, both of which affirm its fair market value. Neither valuation includes the parking lot with 186 spaces, which is included in the transaction. The decision of Council was heavily based on the significant cost savings to the Langford taxpayer of approximately $10.2 million over the next 17 years, and $121 million over the lifespan of the building, compared to continuing under the current arrangement. The decision of Council was also driven by the desire to secure the recreation asset beyond the remaining 17 years of the existing agreements.

Under the existing agreements, the City is responsible for covering any financial lease obligations above and beyond the originally committed $950,000 in additional financial supports to the YW/YMCA. Today, this results in $1.9 million in total annual supports, closely aligning with the YW/YMCA’s current annual rent. In addition to anticipated rent increases built into the lease, there are an anticipated $14.8 million in lifecycle costs over the same period, both of which remain unbudgeted for by the YW/YMCA and represent potential future financial implications to the City based on the terms of the tripartite agreement.

$9.5 million of the purchase price will be funded by the Growing Communities Fund (a portion of the $16.4 million Provincial grant received by the City in March 2023), $20 million of the purchase price will be financed through a five-year loan through the Municipal Finance Authority of BC, and the remainder will be funded through property taxes collected/to be collected in 2023, 2024 and 2025. The five-year short-term loan is projected to save taxpayers approximately $7.5 million in interest compared to a longer-term, 20-year loan. Additionally, after the short-term loan is repaid, the additional taxes enable the City to build financial capacity for asset management or other initiatives, with approximately $7.6 million available annually after 2029. The repayment of the short-term loan requires annual tax increases of approximately 1.75% from 2025 to 2028.

While Council's decision focused on the building purchase rather than the operations of the aquatic centre, they acknowledged the need for ongoing discussions to enhance recreational services for residents. Langford will take possession of the building and parking lot on April 1, 2025, subject to the due diligence period.

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Overview
At the November 4th, 2024, Council Meeting, City of Langford Council was provided with a comprehensive update from Colliers Project Leaders regarding the potential purchase of the Westhills YW/YMCA Langford Aquatic Centre and parking. The briefing detailed the due diligence steps taken to date, and the financial impacts of either continuing under the current arrangement or proceeding with purchasing the building and parking.

The City’s Legal Obligations
The YW/YMCA has indicated that it has already lost over $10 million to date operating the facility, and that its business model does not cover expenses like lifecycle costs. The due diligence indicated that, according to the tripartite agreement, the City is required to cover all building related costs if the YW/YMCA cannot cover building lease and lifecycle expenses.

Estimated Lifecycle Costs
Colliers Project Leaders estimates an expenditure of approximately $14.8 million for lifecycle costs over the next 17-years, regardless of whether the City decides to purchase the building or not. As noted, this obligation arises because the City acts as the financial guarantor under the terms of the 2013 tripartite agreement.

Short-Term Tax Implications/Potential Savings
A purchase will require a tax increase of 1.75% annually from 2025 to 2028.

However, due diligence indicates that purchasing the building is projected to save the City $10.2 million over 17-years, and $121 million over 42-years, instead of continuing with the current arrangement.

In addition to the projected significant long-term savings, the purchase of the building and associated parking lot would secure the asset for Langford residents, providing more certainty around the facility operations after the current arrangement expires in 17-years.

How to Provide Your Input:

Email a Written Submission to Council by End of Day Sunday, December 8th:
LetsChat@Langford.ca

Attend a Council Meeting In-Person:
Langford City Hall, Council Chambers
3rd Floor, 877 Goldstream Avenue

Attend a Council Meeting On-line:
For dial-in meeting information visit:
Langford.ca/Meetings

Next Council Meeting
Monday, December 16, 7pm