February 7, 2018
Boys & Girls Club gets relief from $1.5-million debt
The Boys & Girls Club of Fauquier in early 2010 purchased the building at 169 Keith St. for $1.8 million but never came up with the funds to address that debt.
If you don’t do this, and you throw away 10 years of work, you’re back into a school setting. It’s a pretty easy choice.
— Mike Forsten, VKM Holdings LLC principal
The local Boys & Girls Club finally has relief from crushing debt that hamstrung fundraising efforts for most of the last decade.
VKM Holdings LLC of Warrenton recently agreed to take back the Keith Street building the club purchased for $1.8 million in early 2010.
The club has signed a three-year lease for the 15,000-square-foot structure at $3,200 a month, Executive Director Lynne Richman Bell said Wednesday.
That actually will cost about $1,000 more than the club’s monthly payment on the first of two mortgages, Ms. Bell said. The club had continued to pay down its first mortgage, with a balance of about $425,000, due a consortium of The Fauquier Bank, Oak View National Bank and Union Bank & Trust.
But, for years the club had made no payment on the second mortgage for $1.1 million that it owed VKM, headed by local real estate developer and health club owner Mike Forsten.
“They’ve been very patient and very understanding,” Ms. Bell said of VKM, which includes Valerie Story and Kim Forsten, Mike’s wife.
But, the debt “really took us off mission,” the club director said.
It also prevented the club from receiving grants from some foundations and donations from some private citizens, she added.
“Eighty percent of our operating fund comes from philanthropy,” Ms. Bell explained. “Donors want to make contributions to provide services to kids, not to retire debt.”
Despite a number of initiatives over the last five years, the club never found a way to address the issue. Country Chevrolet President Andy Budd last year donated $10,000 a month to the club to help it get back on track, and others, including Steve and Reta Rodgers, also made significant donations.
The club has an annual budget of almost $500,000 and 15 employees, two of them full-time, Ms. Bell said.
Under the new arrangement, VKM assumed responsibility for the bank mortgage and released the club “from all financial obligation in the form of debt,” she explained.
“The bottom line is it was kind of like being ‘house poor’,” Mr. Forsten said Wednesday. “There were a number of grants they weren’t able to get because of the status of the debt.”
He added: “If you don’t do this, and you throw away 10 years of work, you’re back into a school setting,” where the club started. “It’s a pretty easy choice.”
Mr. and Mrs. Forsten built the Keith Street structure for their Old Town Athletic Club, which moved to Walker Drive in 2009. They sold the structure to the Boys & Girls Club of Fauquier and held the note for most of that purchase.
“We were charged by the Boys & Girls Clubs of America and the PATH Foundation to develop a plan to eradicate the debt on the building as part of the terms of their . . . grants awarded to us this year,” club board Chairman John Nettles said. “The debt had to be addressed . . . .
“Mike Forsten and I met over a period of months to talk about options,” Mr. Nettles added. “He understood our position and was willing to help find a solution.”
A Nov. 21 meeting included representatives of the club, VKM and the three banks.
“Each of the bank leaders understood our purpose and was willing to participate,” Ms. Bell said. “It could not have been a more open-minded and solution-focused meeting.”
The club has 500 members who participate in a range of programs during different parts of the year in Warrenton and at Cedar Lee Middle School in Bealeton. Daily participation averages 150, according to Ms. Bell.
“We’re looking at expanding,” she said. “We’re talking with schools and parks and recreation about Marshall. That’s the focus: Serving more kids.”
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Rover 530 · February 8, 2018 at 9:34 pm
It's good that the club is not thrown out on the street because it provides an excellent service to ur local youth. People and businesses have been generous with their money and their time. Nothing can take away from that. However, it appears that the group managing the affairs of the club has screwed up royally and appears to be incompetent. If they can't manage properly they need to step aside and let people who know what they are doing run the program.
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