The reopening of the McDermont Field House as McDermont X coincided with the start of a new year and a new beginning for both the managers running the sports and recreation center and the City of Lindsay, which owns the 172,000-square foot facility. Since opening a decade ago, McDermont has captured the attention of residents, both positively and negatively. Those in favor of the project lauded the redevelopment of a long vacant packing house, its potential to spark the City’s economic vitality, and a chance to put Lindsay on the map for entertainment/tourism in the Valley. It accomplished all of those goals but not in the way town tax payers had hoped.
The redevelopment of the old McDermont Fruit Packing Co. would have cost far less than the $13 million price tag if not for the addition of the third, and largest, building on the north side. The towering three-story structure included not one, but two indoor soccer fields, a climbing wall and tree house structure that is sparsely used and a zipline, which has yet to open. At one point, there was even talk of a netted baseball field on top of the building, a liability nightmare that would have dwarfed all other cost concerns.
At times, McDermont was profitable and actually helped the City with its cash flow problems. When it rained, McDermont offered a dry place to play soccer and basketball and when temperatures topped the century mark it offered shelter to players on a shielded field and court. The facility employed an army of workers, many of them young adults with few other opportunities to work elsewhere in town. At one time, McDermont employed 85 people through a combination of city funds and employment grant funding. After the first year of operation, that number dropped to 52. Two years after opening, the number of employees fell to 38. This fiscal year, McDermont consolidated employees with its smaller, sister facility the Lindsay Wellness Center after issuing layoffs in an attempted to inch its way toward its first break-even year. Now that McDermont is off the City’s books, there are just 24 total employees running the rebranded McDermont X. Over the course of 10 years, McDermont has borrowed $3 million from the General Fund, none of which has been repaid.
The City touted the venue as a “Disneyland of the Valley” when it opened in 2008. Yet its popularity among Valley fitness fans, gym rats and weekend warrior basketball and soccer players has yet to produce anything that could even be considered a fraction of theme park style numbers even after they have been adjusted for the local population draw. McDermont never spent more than 2% of its budget on advertising and promotion of the facility, making it one of the most expensive secrets hidden from the majority of its potential customers.
Those opposed to the project more accurately predicted the pitfalls (above) of such a large facility in such a small town.
The closest comparison to the City of Lindsay owning and operating a sports and recreation center are local hospitals owning and operating fitness centers in Visalia and Tulare. The difference is that Kaweah Delta Medical Center does not rely on the funding from The Lifestyles Center to balance the books. Even the Evolutions Fitness and Wellness Center couldn’t save the finances of Tulare Regional Medical Center.
McDermont may have done many things for Lindsay in the last 10 years, but making money wasn’t one of them, and as a publicly funded facility, profit was never the primary motivator for the facility. That is a job best left to the private sector and as of Dec. 12, the City has finally come to the realization that municipal governments are more suited to allow business to thrive instead of going into business themselves.
The profitability of McDermont now rests in the hands of a group uniquely qualified to handle the enormous packing house converted recreation center. Clint Ashcraft, who has overseen operations at McDermont since 2010, is now at the head of McDermont Venture Inc. (MVI) and joined by former managers Deici Avila and Alfredo Velasco. In its final year of being operated by the City, Ashcraft and his team maneuvered through another round of layoffs and were able to drastically reduce costs. In an interview with the Sun-Gazette last week, Ashcraft said the sports and rec center would normally begin the calendar year with a $200,000 deficit but began this year chasing solvency by just $20,000. The short staffing has given Ashcraft a blueprint for how to efficiently run the historically inefficient facility. MVI is starting its enterprise with a plan to dedicate as much as 10% of its budget to marketing McDermont, has already began working with an ad agency, and has already begun an online marketing campaign.
The City may also start to see some of the cash flow it desperately needs from McDermont to repay the General Fund, continue to pay off its initial construction costs, and supplement the City’s revenue stream. Under the terms of the operations agreement with MVI, the City will take 50% of the profits generated at McDermont in lieu of a lease payment that the City will then apply to debt service on the facility, just under $200,000 for the 2017-18 fiscal year. Once MVI hits a threshold of $100,000 in net income, MVI’s half of the profits will go toward purchasing the facility from the City. The City even built in an insurance policy. Once MVI reaches the $100,000 threshold, they must maintain those revenues year after year or pay penalties, which would be applied to debt service in addition to the profit sharing.
There is no guarantee that Ashcraft and his privately funded venture can change the fortunes of McDermont while simultaneously facilitating a turnaround of City cash flow shortfalls; but, for the first time in its history, McDermont may finally provide Lindsay tax payers with more than just a sporty city block.
