The San Francisco JCC's leaders have finally given up on their aging, worn building.

They haven't decided yet whether to raze and rebuild the 65-year-old Laurel Heights structure — or to gut its interior. But faced with continuing financial problems they link to the building itself, the center's top officials say the physical transformation must happen within three to five years.

"We don't see a long-term future in the current building," said Gale Mondry, board president of the Jewish Community Center of San Francisco at 3200 California St. "We feel the organization won't be financially healthy unless we have a significant reinvestment in the facilities."

Basically, JCC leaders have concluded that the run-down building drives away potential members, discourages rental use and wastes maintenance dollars.

A new or renovated one, they maintain, would be cost-effective in the long run and would attract new members.

By August, JCC officials expect to begin work on an analysis of whether to tear down and rebuild at the same site or to massively renovate the building. The study will also detail what local Jews want from the JCC, projected costs, fund-raising strategies and how to stay afloat until a new center opens.

As JCC leaders contemplate this major undertaking, they are dealing with the loss of two of its highest-level professionals: Zev Hymowitz and Katherine Feinstein.

Hymowitz, hired as the JCC's executive director in mid-1995 to revive the financially shaky center, will leave Oct. 31. His two-year contract was set to expire Aug. 1. In June, the JCC board extended it for another three months while searching for his replacement.

"I feel like I accomplished a lot," said Hymowitz, who turned 65 in May and won't publicly say what he plans to do next. "I'm not from the West Coast. I didn't intend to stay."

Hymowitz was hired to stabilize the center's operations, Mondry said, and "he's done a great job."

The JCC now needs someone who can stay for a longer period and formulate its future over the next several decades, she added.

Feinstein, who became the assistant executive director for marketing and programs in May 1996, left the JCC at the end of June but may remain involved. as a lay leader. She has been nominated to join the board this fall. Rumored as a potential candidate for S.F. District Attorney according to the San Francisco Chronicle, the U.S. senator's daughter did not return phone calls.

But Mondry said that Feinstein "did an excellent job. I think she accomplished a lot of what she wanted to." Her assistant director's position will remain open until Hymowitz's replacement is hired.

The board also decided last month that Sandee Blechman, currently the assistant executive director of finance, operations and administration, will run the JCC's day-to-day operations until Hymowitz leaves. Hymowitz will use his remaining time to focus on capital planning and fund-raising.

The decision to scrap or make over the current building came after a strategic planning committee spent several months examining the JCC's financial picture.

Comprised of leaders from the JCC and general Jewish community, the committee made its initial recommendations to the center's board in April.

"The JCC's facility and its financial situation are its two greatest weaknesses. In many ways they are intertwined," the committee's 56-page report states.

The center's financial crisis came to a head in early 1995 when its deficit topped $1.5 million. So the JCC cut its classes, hours and staff before finally shutting its health club in May 1995.

Since then, the center has slowly rebounded. The board hired Hymowitz, who was known as a turn-around man within the national JCC movement. It sold property on Brotherhood Way last year for $1.8 million. It rented out its facilities to the for-profit Pinnacle Fitness, which opened a renovated health club in January. The JCC also slowly built up its schedule of classes and events. And it increased the enrollment in its preschool.

But the center's $5.4 million annual budget is still in the red. The 1996-97 budget deficit was expected to come in under $300,000, though Mondry said final figures wouldn't be certain until the end of this month.

According to JCC officials and the report, the center cannot erase the deficit by simply cutting staff and programs, or bringing in additional revenue. They say something much more dramatic must happen.

Though other officials wouldn't say whether they back renovation or demolition without a more detailed study in hand, Hymowitz said he favored the latter approach.

"My personal feeling is that we have to knock this down and build a new one," he said. "The need for a new facility is long overdue. I think the community recognizes this."

A massive renovation might save $3 million to $4 million, he noted. "But in the overall scheme, it's not a big savings."

Any renovation would have to include a complete overhaul of the electrical system and plumbing, as well as a seismic retrofitting.

According to the report, the building is "run down" and in "poor condition" because leaders have been planning to tear it down for the past three decades and therefore haven't put a lot of money into maintenance.

Compounding the current fiscal problems are three properties that have drained the JCC of money since it purchased them in the late 1980s and early 1990s. Those buildings, adjacent to the JCC, were expected to be used for a JCC expansion. Instead, the office space and condominiums have been losing $138,000 annually, in part because some of it is rented at below-market rates to a nonprofit Jewish agency and to Russian immigrants.

Paul Resnick, the JCC's treasurer and chair of the strategic planning committee that created the report, said ideally the center could keep those properties within the Jewish community and available for future use.

"The practical aspect is that the carrying cost is very expensive for us," he said.

The concept of any future JCC is still sketchy. There are no price tags or architectural drawings yet.

One piece of the plan, however, is set in cement. A new JCC would definitely include a health club.

"I think the question is: Who runs it?" Mondry said.

Though it has been easier to let a private corporation operate the health club for now, the arrangement has also meant less potential income.

According to the JCC's report, Pinnacle Fitness Center's contract is expected to bring in about $150,000 to the JCC in the 1997-98 fiscal year. But if the JCC ran its own health club, it potentially could net $400,000 per year.

Though Pinnacle signed an eight-year lease with the JCC, officials said the pact contains provisions to compensate the fitness club in case the JCC decides to rebuild or renovate the building.

One more factor the JCC must consider in the raze-or-renovate debate is the competition for Jewish dollars. Several other multimillion dollar capital projects in San Francisco are in the works. These include the new Jewish Museum San Francisco and the Scott Street Senior Housing and Social Services Complex, as well as plans to demolish and rebuild Congregation Beth Sholom's sanctuary and social hall.

"It wouldn't make any difference if there were a hundred capital campaigns going at once. We have to do this," Resnick said.

"We don't have a choice but to compete with them. We can't continue to operate in the current facility…And the community doesn't have a choice. If it wants a JCC, it has to have a better facility."

And, he added, the city's Jews need the center because it serves everyone, from the secular to the observant. "It would be absolutely preposterous for San Francisco not to have a viable JCC."