The Medical Center of Central Georgia will continue operating the Macon Health Club through August and will announce a final decision about the club’s future by the end of that month, hospital officials said Tuesday.
During a major cost-cutting initiative last fall, The Medical Center decided to close the club because it operates at a $100,000 loss. But the hospital gave health club boosters a temporary reprieve, first until spring and then until August, to develop a viable counter-proposal or work out alternative management.
The health club, which had more than 600 members at the beginning of the year, offers workout equipment, a pool, track, racquetball and basketball courts, saunas and steam rooms to members.
U.S. Rep. Jim Marshall, D-Ga., who has been a member of the club since 1977, said he has met several times with hospital CEO Don Faulk to urge that the club stay open under Medical Center management.
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The downtown building has served as a health center for more than a century. Financially struggling, it was taken over by the Medical Center in 1991.
The building and its contents were basically given to the hospital in a contract that required the hospital to maintain it as a health club until 2020. The contract indicates that if the hospital wants to opt out earlier, it must offer the club leadership the opportunity to resume management.
But that’s not all the contract requires. Marshall, who drafted the agreement as president of the Macon Health Club at the time, said he doesn’t think the hospital realized its obligations under the agreement when it decided to cut the health club loose.
According to the contract, if the Macon Health Club wants to run the facility itself, the hospital must lease it to the club for no more than the facility’s operating costs. The hospital can also, over time, charge the club for capital improvements the club requests from its landlord.
The contract indicates the hospital would have to transfer to the health club up to $100,000 in portable property to support the health and fitness program. The health club would purchase additional portable property on the premises from the Medical Center at a very low interest rate.
“I think the Medical Center will decide under closer examination, it doesn’t make sense to include the health club in its cuts,” Marshall said. “It might not be so advantageous to the Medical Center financially if it pulled out and became the landlord.”
Rhonda Perry, chief financial officer of the Medical Center, said she is confident in the accuracy of the hospital’s original analysis.
Running the club costs about $270,000 a year in direct operating expenses, she said.
Perry also noted that the hospital might be able to invest more in improving its Wellness Center on Northside Drive, which is profitable, if funds weren’t being divided between two health clubs.
But she said, “We delayed the closing in order to validate their concerns,” adding that Medical Center attorneys are reviewing the contract to make sure they didn’t miss anything.
The contract states that the lease option “contemplates that Macon Health Club will remain a corporation in good standing under the laws of the state of Georgia,” and the club agrees to maintain its corporate existence in good standing.
But the club didn’t do this. It was only recently reincorporated with the financial assistance of NewTown Macon.
Although the health club already had been targeted during the Medical Center’s $43 million cost-cutting effort, the additional loss of $3 million in funding from Bibb County this year “makes the closure more compelling,” said Joe Lavelle, executive vice president of The Medical Center.
Perry agreed, saying, “We certainly don’t want to cut patient care if we have other options.”
Originally, health club members said they might seek another organization or even a developer to run the club and renovate the upper floors into lofts.
Ford said the club is now focused on trying to keep the Medical Center as manager, perhaps by providing help with marketing or reducing expenses. He and Marshall both mentioned the cost of laundering towels — a $40,000 annual expense, according to Perry — could be eliminated by having members bring their own.
Don Cornett, a member of the health club board, said Tuesday he has been out of the country and isn’t up to date on negotiations. Some other board members could not be reached Tuesday.
Information from The Telegraph’s archives was included in this report. To contact writer S. Heather Duncan, call 744-4225.