by Kate Shunney
Morgan County Commissioners have fielded questions, suggestions and concerns about their preliminary contract to buy a private fitness center and turn it into a county-owned facility.
In mid-May, commissioners voted unanimously to enter into a contract with Rankin & Associates LLC to try and purchase Rankin Physical Therapy & Fitness Center for $3.65 million.
That contract has not been finalized in the month since, but a building inspection has been done. Work has started on a loan application for the U.S. Department of Agriculture (USDA) to borrow $2.15 million over 30 years at 3.75% interest to buy the facility.
Commission President Sean Forney last week agreed to sit down with The Morgan Messenger to answer questions about the financial picture behind the purchase, and the county’s plans if the sale goes through.
Several letters to the editor in the newspaper have raised questions and suggested the purchase might have hidden benefits for the parties involved.
Forney said he was the one who approached Kelly Rankin, the Morgan County native who built the physical therapy facility, about the possibility of selling the center to the county. The center was not on the market and has no debt.
Creating a multi-purpose recreation center for Morgan County residents has been on Forney’s radar since he was first elected, and on the minds of other commissioners before him.
When Valley Health closed down their fitness center offerings in Berkeley Springs, local residents approached the county about other alternative locations for working out. That got Forney thinking.
He and other county officials toured Rankin’s to look at the building and see how the fitness center operation ran. Their mindset was to design a county facility like it.
Forney said he took a leap and asked Rankin if he would consider selling the center to the county.
The answer was “maybe.”
“A large majority of counties in West Virginia have a county-owned fitness/wellness center. We don’t have a place or a building we can use for that. We knew we have gaps to fill in the things we feel the county needs,” said Forney.
Community meetings a decade ago raised the conversation about building a recreation center on the 16 acres next to Little League fields along U.S. 522. Those plans didn’t move forward.
“On those 16 acres, we could build but we’d have to start from scratch. Rankin’s checks all the boxes,” Forney said.
The building is brick and metal, already has a sprinkler system and is closer to town than the county’s acreage.
“We would have to spend more than that to get a building with all the same amenities,” Forney said. Government construction costs more than private building because of additional wage and safety rules.
Most importantly, commissioners looked at the financial aspect of the center’s current operation, said Forney.
“It has a lease that pays the debt service,” he said.
The county’s loan payment, if it gets the proposed USDA loan, will be $9,357 per month. A private physical therapy company leases part of the fitness center space currently for more than that per month, Forney said.
There are also roughly 300 gym memberships on the books at Rankins that county officials expect would stay in place.
A spreadsheet showing Rankin’s current costs and revenues show that with inflation and maintenance costs embedded, the county would bring in money immediately if it took over ownership of the fitness center.
Forney said it would be the county’s goal to boost use of the facility further, offer gym space to local sports teams to practice and attract more physical fitness instructors to hold classes for the public.
Those could include adult volleyball, senior citizen fitness classes, Pilates, yoga, bootcamp classes along with event rentals.
“The whole objective is to have the gym being used all the time,” he said.
Under county ownership, gym memberships and facility use could be subsidized for low-income families.
If the current physical therapy lease holder decides to move out of the facility at some point, there are others interested in the space, Forney said.
“The goal is not to make money, but it will not be a drain on the county taxpayer,” Forney said.
“We are well ahead of the 8-ball,” he said. “It already pays for itself.”
Current expense data with projections put the center’s operating expenses at $60,464 annually. The county estimates their operating costs, with three full-time employees and one part-time employee, at $88,000 annually, not including debt service.
The facility would also be a qualified use of Hotel/Motel tax funds if it needs a cash infusion, Forney said.
Commissioners are prepared to make a $1.5 million down payment on the fitness center. Commissioner Joel Tuttle said previously $1.25 million of that would come from American Rescue Plan (ARP) funds and $250,000 would come from the Hotel/Motel Tax fund over two fiscal years.
“Without ARPA, I’m not sure if this would be possible,” said Forney. “We have to use it. The silver lining is it’s allowed us to grow and learn.”
He envisions a county-owned fitness/wellness center as “a safe place where people can go and feel comfortable doing activities.”
“It would be a significant value added to the county,” said Forney.
Commissioners will talk more about the proposed deal if it moves ahead and the USDA loan is approved.