McDermont Ventures Inc. purchases McDermont X property for just under a million dollars, freeing the city from their obligation to maintain it
LINDSAY — After being under Lindsay’s purview for years, McDermont Ventures Inc. has followed through with purchasing the property of McDermont X.
After years of the behemoth recreation center, McDermont X, being on Lindsay’s books, McDermont Ventures Inc. (MVI) finally purchased the property. Lindsay sold the property to MVI for $800,000, and will be putting that money towards a new water project for the city. Getting McDermont X off the books relinquishes them from having to carry the cost of liability insurance, finally cutting the cord between them and the facility after years of keeping them afloat.
“We’ve turned the page on that project, and it’s good that the community got a fantastic recreation facility, but it was at a pretty high cost to the city,” city manager Joe Tanner said. “We’ve moved on from that and we wish the new owners the best of luck.”
From here on out, Tanner said McDermont X will finally be treated like any other business in the city, whereas before, it was under the city’s purview, as well as on the city’s property. The only tie the city will have to the property now is paying off debt from a loan that was pulled out by McDermont X in 2012. However, Tanner said this debt has a small impact on the city’s finances.
Per the purchasing agreement, McDermont will have to continue operating as a recreation facility until 2028. This assures residents that the facility is here to stay for a while according to Tanner. There were some rumors circulating in the city that McDermont would be closed, and a cannabis facility would take its place. However, Tanner said that is not the case.
As of right now, the city does not have a specific water project set in place, but they will be conducting a water feasibility study that will be completed in a few weeks, according to Tanner. After the study is complete, the city will be given a priority project checklist for their water infrastructure. Then, the city will determine what the $800,000 will go to first.
The city touted the venue as a “Disneyland of the Valley” when it opened in 2008. This dream quickly turned into a nightmare at the wake of 2018, when the city realized that McDermont borrowed over $3 million over the course of 10 years. Not only that, but as a public recreation facility they were hemorrhaging dollars, often around $300,000 per year.
The city leased the property to MVI, which took effect in 2018 and gave the company the option to purchase the property with an initial payment of $100,000. That was in addition to the agreement that MVI would give the city 50% of their annual profits to go toward buying the property for the term of the lease.
The city had also taken millions from utility funds to help fund McDermont under previous city managers. When residents were made aware of this in 2019, they flocked to council chambers for answers and admonishment. At the Feb. 26, 2019 Lindsay City Council meeting, current councilwoman Yolanda Flores raised the question how much the city had spent on the McDermont facility in 2018 versus how much they made.
Dropping operations from the city’s books saved the city a “minimum of $400,000 annually,” according to former finance director Bret Harmon, in March of 2019. In his presentation to city council, just a year after the facility was no longer under the purview of Lindsay, Harmon said that McDermont X’s takeover essentially lifted major parts of the city’s recreation program. Paired with profit sharing, the city saw a benefit of $416,000 in their budget in McDermont X’s first year.
The lease from the city of Lindsay expired at the end of 2022. In January of the same year, Clint Ashcraft, owner of MVI, submitted the paperwork to purchase the property, along with their first $100,000 payment to exercise their right to purchase.