Aspen health clubs join forces

Carolyn SackariasonThe Aspen TimesAspen, CO Colorado

ASPEN Two of Aspens oldest athletic institutions have merged in an effort to save one of them.The Aspen Club & Spa has partnered with the Aspen Athletic Club to strengthen its position in the marketplace and boost negotiating power with the landlords who control the Athletic Club’s lease.The lease is up Nov. 1, and Bill Hoffner, owner of the gym, has been unsuccessful in getting it renewed at a rate that will allow him to operate at a profit.Michael Fox, owner of The Aspen Club, has agreed to maintain the current lease and assist in negotiations for its long-term extension. But both owners said they are focused on efforts to preserve the Athletic Club and potentially provide a transition plan should future lease negotiations not pan out.The goal is to negotiate the lease and keep the Aspen Athletic Club open, Fox said. [The merger] provides a stronger, financially viable tenant.Hoffner said his 23 years of owning the gym and Foxs 15 years in the industry give them some leverage with the building owners in that it would be difficult for a new operator to run a health club.Michael brings a pretty big stick, and its a world-class facility, he said about securing a long-term lease. Now, we are in a better place to get there.But if lease negotiations fall apart, Athletic Club members, which number in the 400s, will be offered access to The Aspen Club for a rate that has not yet been established.Best of all, we are assured that our membership will have a place to pursue their health goals regardless of the outcome for an extended new lease, Hoffner said.If lease negotiations are successful, the two athletic clubs will offer joint amenities to both membership groups.I think there are great synergies between the two facilities, Fox said.He added that the merger will open up access for Athletic Club members to fitness programs and services offered at The Aspen Club. And, Aspen Club members would be able to access the Athletic Club’s facilities, such as the climbing wall and the street-level atrium used for spinning classes.Hoffner said partnering with Fox offers efficiencies in staffing and operations at both facilities.The concept is that the two businesses can combine their marketing efforts, as well as their staffs at either facility. Hoffner said one option is that the Athletic Club could close on weekends, when business is typically slow, and his members can work out at the The Aspen Club on those days.There is tiered membership rates in the works so that members of either club can use both facilities. Currently, memberships at the Aspen Athletic Club are $85 a month. The monthly dues at The Aspen Club & Spa are between $115 and $130.The Aspen Club has about 1,800 members with varying rates depending on what package they have, Fox said. Bringing in Athletic Club members will give his facility more exposure.The opportunities are really at The Aspen Club, Fox said. If we can get the lease extended, I envision creative and reciprocal memberships where all of our members reap the benefits from both facilities with options to fulfill a variety of needs and price levels.Fox and Hoffner dont consider themselves competitors; they market to different clientele and have over the years collaborated as the industry has changed.Both focus on niche markets that are unique to us, Hoffner said, adding a merger can create cost savings that allow the Athletic Club to absorb expenses like increased property taxes and utilities.Its not an easy town to do business in, especially in this economy, he said. Now we at least have a plan that certainly makes a lot of sense.After owning his space for 20 years, Hoffner sold his portion of the Aspen Athletic Club building in 2006 for $6.9 million to two New Zealand businessmen who operate under the auspices of CM LLC. The sale happened after Nick Coates sold the other portion of the condominiumized building and the owners planned to redevelop the aging structure.It needed to be remodeled, and we sold the building to a partnership that has solid experience in refurbishing and updating aging buildings, Hoffner said.He said he signed a three-year lease and began negotiating for a extended contract.As time progressed, we couldnt reach any closer to an agreement, Hoffner