by CHRIS ROGERS
The Winona Family YMCA is still working on its project to build a new Y in partnership with Winona Health. Last week, Y leaders announced a new, higher cost estimate for the building and laid out a timeline for the project moving forward.
Last fall, Y and Winona Health officials held a ceremonial groundbreaking at the site, but construction has yet to begin. Last week, Y leaders announced they expect to open contractors’ bids in June and begin construction in July. At the time of the groundbreaking, the project was estimated to cost $14.5 million. Now, it is now estimated to cost $18 million. The Y has raised $13.2 million so far.
The Y is continuing its fundraising efforts, including seeking federal tax credits worth $3.5 million, if awarded. In an email to members, Y leaders wrote, “It’s not a matter of IF we get the new building. It’s only a matter of WHEN!”
The projected cost increased because of inflation in building materials and labor prices, YMCA CEO Janneke Sobeck and YMCA Board Chair Scott Hannon explained. “Unfortunately, as this process has taken a long time, the construction costs, material costs have gone up,” Sobeck stated. “We need to get this started because we can’t afford to wait for prices to go up even further.”
“Tariffs have driven up our domestic costs of steel and other things,” Hannon said. He also referenced shortages of skilled labor that have increased construction costs and the fact that many contractors are busy and not too “hungry” for projects.
However, Hannon described the $18-million estimate as very cautious, and he and Sobeck expressed optimism that when the Y opens bids for the project in June, the prices might be lower than estimated.
Hannon reported that the YMCA Board made some value-engineering changes to the project to save money, but the new building’s design still features the amenities Y leaders are looking forward to: handicap accessibility throughout, a two-court gym, workout facility, six-lane pool, fitness studio, dedicated space for Winona Health’s rehabilitative services department, racquetball courts, sauna, steam room, whirlpool, childcare and children’s play areas, meeting space, and something the Y has not had much of before — outdoor green space.
The tax credits for which the Y applied are called new market tax credits, a federal program created in 2000 to incentivize big investors to put money into lower-income communities. Winona qualifies as a low-income community for the purposes of the tax credit. The way the credit works is that the federal government will award tax credits to community development entities (CDEs) — often banks or nonprofits. Private investors — often large corporations or banks — will pay a community development entity (CDE) for the tax credit. In turn, the CDE will use that money to help fund qualifying businesses or nonprofits in low-income communities, such as the Winona Y. The process is highly competitive, YMCA Board member Nathan Woodworth said. Y leaders have pitched the project to multiple CDEs, and now hope that one or more of those CDEs will win tax credits and ultimately select the Y’s project for funding, he stated.
There are some things working in the Y’s favor, Woodworth continued. “We’re partnering with a health care organization, that’s great, and were partnering with other organizations and creating new programs that don’t exist yet in this community,” he said. On top of that, historically, the bulk of these tax credits have benefitted U.S. metros, and the federal government wants CDEs to invest in more rural communities, he explained. “We think our chances are pretty darn good of getting something,” Hannon stated.
“The community needs this and the Y needs this,” Sobeck said of the new building. “We’ve been operating in a building that we’ve just outgrown. So with this new project, we do have a gap in our fundraising, but we’re very optimistic about the new market tax credit.” The Y has partners and investors that are committed to the project and a great fundraising team, she continued. “They’ve done a tremendous job raising $13 million, and they, too, are looking forward to, once we have the actual [bid] in hand, then they feel confident they can go back out and help with that gap. We’re in a good place, and we do still need a little bit of help,” she stated.
Y leaders said they expect to hear about whether they will benefit from tax-credit funding by June, around the same time they will open construction bids. “June is going to be a hot month,” Sobeck stated. “It’ll be very exciting for us when all of these pieces come together at the same time.”
“I’m just really excited about the space itself,” Sobeck continued. “I think our new location is going to be wonderful for both our current members and the rest of the community. I think we’re going to attract new members with this facility. I love that we’ll have green space and be able to link up to the lake bike path right out the front door.”
Y and Winona Health leaders say the new facility will make it easy for Winona Health patients to transition from rehabilitation and other workouts prescribed as part of their treatment to everyday exercise at the Y that will help them stay healthy for the long haul. The new building will also be home to the American Red Cross’ Winona branch and Livewell Winona.
“I’m excited about where we’re at with the project, and I’m really looking forward to this taking off,” Hannon stated. “It’s going to be great for our community. Not just our members, but the entire community.”