Q&A with Aspen Club owner Michael Fox
Editors note: Inside Business, published Tuesdays in The Aspen Times, recently posed some questions to Michael Fox, owner of the Aspen Club. Here are his responses.Q: How long have you owned the Aspen Club? A: I have owned the Aspen Club for almost 12 years. I clearly remember coming to Aspen as a single guy whose worldly possessions could easily fit into the back of my Grand Cherokee. Since then I have added a wife, three kids, a dog, 10 pounds, some gray hair and more stuff than I know what to do with. Fortunately, the Cherokee hasnt changed. Q: How much has your membership grown since then?A: When we started in 1996, the Aspen Club membership was down to roughly 400 members. In the years since we took over, we have grown membership to over 1,900, mostly local members. In a town of 6,000 people, this is an accomplishment the team here is very proud of.Q: What are the challenges of running a health club in Aspen?A: Aspen is both an amazing community and a destination resort. Serving the disparate needs of both of these groups is necessary to survive as a business here, yet this is not always easy. At the club, we strive to create an environment that provides for the aspirational desires of both of these groups. With that comes the challenges of running a business in this town, with its seasonal environment, high labor costs, high operating costs and higher customer expectations. A struggle that all businesses in Aspen face is dealing with the high value of real estate and the dilemma it poses. If a business rents its space, the cost of the rental usually is more than the business can produce, which is why so many local businesses have disappeared over the years. In a situation like ours, where we are fortunate enough to own our building and the land it sits on, there is the constant choice between the challenges of running a business in Aspen versus the ease of realizing the immense underlying value in the land the business sits on. When the dirt is worth three times what the business is worth, it is tempting for an owner to ask why he is busting his ass running a business with a lot of employees, a lot of customers and a lot of headaches, when he could tear down the building and simply sell off the land for a lot more money than he will ever make from the operating business. That is where the passion and vision of our team at the club comes into play. Part of the impetus for Aspen Club Living is the desire to build a facility and a company that transcends the underlying value on the site so the temptation to tear down the club and sell the land disappears. Q: Whats your vision for the future of the Aspen Club?A: The Aspen Clubs core mission is to serve the health and wellness needs of our members and the larger Aspen community. Aspen and the Aspen Club have a unique opportunity to do something exceptional at the club site that can raise the standard for personal and community health, as well as greatly enhance the services we provide to Aspen locals and visitors. The Aspen Clubs proposed LEED for Neighborhood Development certified healthy living community has the potential to become an internationally renowned model for sustainable health. It will be the first facility in the country to combine sustainability with holistic health and further cements Aspens standing as an environmental leader in this country. We picture Aspen Club Living as a place where families will come annually for a healthy retreat. It will be the one time of the year when grandparents, their children and grandchildren can all get together under one roof. These families will stay in the same units for the same weeks as 18 other families. They will form lasting friendships with their neighbors who come for the same annual retreat and with the local members of the club. Eventually it will foster a community among the residents and members based around family, a love of Aspen and the desire to remain healthy. In this way, Aspen Club Living becomes a vibrant, sustaining, healthy living community integrated back into the larger Aspen community through the Aspen Club itself.This project is vital to the long-term success of the Aspen Club and to a lesser extent, Aspen. Aspen Club Living will create growth opportunities for our entire staff to enhance their careers and their earning potential. This is because there will now be a more consistent customer flow throughout the year, and we will have more interesting and complex programs to offer and our staff to work on. These types of long-term opportunities are essential to keeping quality people in our town. This project also will create opportunities for community members to explore health and vitality that do not exist today. Finally, it will create an amenity for Aspen that few communities in the country can match.Q: You have a pending development application in front of the planning and zoning commission, which eventually will end up in front of the City Council for approval. What does it entail?A: We are proposing to add to the existing Aspen Club a new community of 19 residential units and 12 affordable housing units designed specifically around the amenities of the club and the theme of healthy living. As part of this project, we will be able to make substantial investments back into the existing Aspen Club. The 12, two-bedroom affordable housing units we are building represents 150 percent of the required employee housing mitigation for the project. With a significant portion of the Aspen Club employees commuting from downvalley today, these employee housing units will allow staff the great benefit of moving back to Aspen, enjoying the Aspen community, contributing to it economically, and reducing traffic. Q: Why fractional condominiums?A: Our goal is to create vitality at the club. While whole ownership units would be easier to sell and manage, we believe that fractional units create the most energy because we will always have people at the club who are active and participating in our programs. Q: You submitted a similar proposal a couple of years ago. How is this different?A: In developing this new proposal, we spent a lot of time talking to our neighbors and thinking about how we create a low impact project that is still viable. Through this process we now have the support of a majority of our neighbors for Aspen Club Living. We do not believe that Aspen is against development per se, but rather the impacts of development, in terms of visual impacts, employee creation, traffic creation, environmental impacts and their overall integration of a project into the community. One of the main goals of Aspen Club Living is to create a project which is exciting and vibrant, allows the Aspen Club to continue to serve our community and has few negative impacts on our neighbors and our community.Aspen Club Living is a very different project than what normally comes through this city. It is low impact both environmentally and in terms of neighborhood impacts, while providing positive community benefits. With this project we will end up with a smaller carbon footprint when we are done than we have today, reduce traffic on the roads from what it would be without this project. We will bring employees who live downvalley and house them right at the club, and we will create better, more rewarding jobs for our team with a growth path and a future. In addition, we will be able to improve the community benefit of the club by investing back into it, upgrading the facility, improving and expanding our local health programming and continuing the viability of club.Q: Given the downturn in the economy and rising costs here in Aspen, how do you think this new business venture will play out in the future?A: We hope favorably. We know that the approval and construction process will take time. We expect that by the time we get through it there are better market conditions that will help make this project successful in the end. Q: Can you share any information regarding the economic model of the new club?A: The residential component of this project, and specifically the residential owners, are the essential economic driver of this project. Proceeds from sales of residential units will pay for upgrades to the club. Furthermore, the owners of the residences will help fund the ongoing operations of the Aspen Club and ensure its viability and creativity for years to come. These owners will serve as the financial foundation for the many programs and retreats we offer, in essence funding the development and operations of world class health programs. Their homeowner fees will offset some of the basic costs of running the club operations, such as maintenance, accounting, front desk and housekeeping. They will allow the club to reinvest back into creating exceptional healthy living programs. Their presence at the club will create more vitality and energy for all of our members and guest. In short, the residences will enable the club to improve in almost every area of its operation and provide a stable financial base for the Aspen Club for the next two or three decades while at the same time retaining affordable membership options for our local members. Q: Will you still operate the club in its current condition if the new development doesnt take place?A: It is our desire to create a world-class healthy living facility that meets the needs of our members and our guests. However, it will be challenging to do this without making investments into the existing building and creating a growth path for our team here. At some point we will face the inevitable Aspen business owners dilemma of do we continue to run a marginal business or cash out on the value in the underlying real estate and move what we believe is a very cool concept to a town with an easier business environment? That being said, I hope we never have to face that decision. Q: When do you expect the project to be complete, if approved?A: If everything goes well in the approval and construction process, Aspen Club Living could be a reality by 2012.