YWCA Minneapolis shutting down two fitness centers, closing swim programs and laying off employees

The YWCA Minneapolis is closing its longtime Uptown and downtown fitness centers and pools, moving away from health and fitness to focus more on child care, racial equity and youth programs.

YWCA officials announced Thursday, Aug. 3 that two of its three fitness centers will close Nov. 1 and be sold, and 85 employees — about a quarter of its workforce — will be laid off. The organization revised the layoff number Aug. 15, saying that only 52 employees will lose their jobs, about 17% of its workforce.

The YWCA Midtown, on E. Lake Street near Hiawatha Avenue, will continue to operate a pool and fitness center; officials said they will be "reimagining" it as a community hub.

The YWCA shut down its Otters and Masters swim teams Tuesday, Aug. 1, leaving more than 300 adult and youth swimmers scrambling to find new clubs.

The restructuring comes as the nonprofit grapples with membership declines, staffing shortages and rising expenses, all of which have worsened during the COVID-19 pandemic.

"Like a lot of nonprofits, we don't have the luxury to be all things to all people," said CEO Shelley Carthen Watson, who has led the YWCA Minneapolis since 2021. "Our history is to go where we're needed and where we make the most impact."

The changes are part of a 10-year strategic plan that the YWCA Minneapolis put together over the last six months, she said. It has one of the widest range of programs of any YWCA chapter in the country, she added, and needed to pare down its programming.

"It made sense for us to double down and put our efforts into early childhood, into girls and youth [programs] and into racial justice and public policy," Carthen Watson said. "Now we realize where the need is, where our sweet spot is and where we want to focus our time, attention, our resources."

She said that the health and fitness business "never really rebounded" after the pandemic, and that the YWCA had to decide whether to stay in it.

"Even prior to the pandemic, for us, it wasn't making a lot of money," she said. "A lot of other YWCAs have pivoted away from what we call the 'swim and gym' model."

The YWCA Minneapolis will likely make millions of dollars on the sale of its two buildings, both of which have operated for decades in high-profile locations in the city.

The 80,000 square-foot YWCA Uptown, on Hennepin Avenue near W. Lake Street, opened in 1987. The 120,000-square-foot YWCA Downtown on the Nicollet Mall, which also houses administrative offices, first opened in 1929; the current building dates to 1976. Carthen Watson said administrative staffers may go fully remote or find other office space near downtown.

Property values aren't listed in Hennepin County records because the YWCA Minneapolis is tax-exempt. According to its 2022 federal tax form, the nonprofit listed $22.7 million in total building and land assets.

The YWCA Minneapolis has about 350 workers total. Of the 52 people who will be laid off from now until October, 12 are full-time employees and the rest are part-timers.

Rightsizing the YWCA

The pandemic has financially strained many local nonprofits. Last year the YWCA Minneapolis, which has an $18 million annual budget, recorded a $2 million deficit — its largest shortfall in recent years, according to federal tax forms.

Carthen Watson said the YWCA's latest financials for the fiscal year ending June 30 are still being finalized, but the year ended with a slight deficit.

Expenses have gone up the past three years, for reasons ranging from higher employee costs to the price of buying food and repairing buildings, while government aid provided during the pandemic has waned, she said. The YWCA Minneapolis received a $2.5 million Paycheck Protection Program (PPP) forgivable loan in 2020.

The YWCA Minneapolis also has struggled to find enough workers amid the so-called "Great Resignation." Carthen Watson said they've usually had 80 job openings at any given time. It's a situation familiar to many Twin Cities nonprofits, which are facing growing workforce shortages as employees confront burnout and seek jobs with higher pay or better hours.

The fitness industry has been reshaped by the pandemic. The YWCA Minneapolis has about 3,000 memberships, down from 7,200 in 2019 — a nearly 60% decline. More downtown employees are opting to work from home, and many new apartment buildings in Uptown tout their own fitness centers, Carthen Watson said.

As a result of those challenges, YWCA chapters across the U.S. are trying to "rightsize," she said, and figure out what their vision is in the post-pandemic world.

The same has been true at the Twin Cities-based YMCA of the North. In 2020, the Y closed fitness centers in downtown St. Paul, Lino Lakes and Prior Lake. Last year it shut down the Marsh in the west metro area, citing declining memberships, and sold it to the city of Minnetonka.

The Twin Cities Y also nixed plans for a boutique fitness facility in downtown St. Paul, due to fewer downtown workers and the lack of state aid. Y leaders said then that the organization was moving away from a focus on traditional sites to broader community programs, including well-being and equity efforts.

The public may still associate the YWCA Minneapolis with fitness, but Carthen Watson said it has far more nonfitness programming. It operates five child care centers, a workforce development program to train child care teachers, and programs on racial justice and for after-school girls and youth. The YWCA Minneapolis also pushes public policies at the State Capitol.

The closures and cuts will allow the YWCA Minneapolis to expand those programs, Carthen Watson said. "We have a history of pivoting and refocusing our efforts to serve the current needs of our community," she said.

'A big loss'

The YWCA Minneapolis told swimmers only last Friday that it was closing their programs. The Masters program is a swimming group for adults, while the Otters is a youth team that lets students train for swimming year-round outside of school seasons.

Rebecca French canceled her YWCA membership this week after hearing about the closing of the Otters program, which her 12-year-old daughter, Hannah, participated in for five years.

"It was so abrupt," Hannah French said. "I'm really sad for everybody."

Because the news came before the YWCA Minneapolis announced the facility closures, several swimmers and parents told the Star Tribune they were confused as to why the programs were being nixed.

"If that's what they need to do to survive [financially], I get it. But they haven't outright said that," said Brian Elliott, a parent of two swimmers, before the YWCA announced the building closures.

Elliott has been a member of the YWCA Minneapolis for 28 years, largely because of the swim programs that his sons participated in. Now there won't be a Minneapolis-based swim club team serving that age group, he said.

"It's really important that there be opportunities for kids to be able to swim in Minneapolis, the city of lakes," he said.

Sixteen-year-old Gus Rudenick said he and other students will have to find openings at swim clubs in the suburbs or one at the University of Minnesota.

"None of us were expecting it," said Griffin Larson, a South High School student who was on the Otters team. "It's a really big hit."

Kim Ellison, a Minneapolis school board member who is a Masters swimmer, said the programs may be able to use school pools before class is in session. She said she found joy in swimming after being diagnosed with multiple sclerosis; without a car, she said, the Downtown YWCA was accessible for her and close to home.

"I was kind of depending on it," she said.

When Jimmy Hoke moved to Minneapolis from Iowa a year ago, he joined the Masters team. Six mornings a week, he swam laps at the YWCA Minneapolis' pool, not just for a workout, but for the community — celebrating each others' wins and losses, he said.

Now, the team is scrambling to find another pool. But Hoke said he worries that it may be difficult to find open lanes with limited pool space in the Twin Cities.

"It was jaw-dropping. This is a big loss," Hoke said. "I'm part of the YWCA because it had this program."