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Photo by Christian Murdock, The Gazette
By BILL RADFORD, THE GAZETTE
A major new player will be muscling its way into the fitness scene on the northeast side of Colorado Springs when Life Time Fitness opens early next month.
The roughly 180,000-square-foot, $27 million “healthy lifestyle resort” near Briargate Parkway and Powers Boulevard will be the second megagym in the area; VillaSport opened a 110,000-square-foot athletic club and spa near Powers and Woodmen Road in late 2007. (Both are even bigger when you factor in outdoor aquatics.)
It will be the 91st club for Life Time, a publicly traded company based in Chanhassen, Minn. The Springs club was the first for VillaSport, a California-based, family-owned company; VillaSport has a second club in Texas.
Among other fitness facilities in north Colorado Springs are a Gold’s Gym, a 24 Hour Fitness, the Briargate YMCA and an athletic club and spa serving the Flying Horse neighborhood. Life Time’s arrival has some wondering whether the market can accommodate them all.
“I would say that right now, we’re saturated,” said Trevor Poling, president and CEO of the local Gold’s Gym franchise. “When you add one more, it’s like supersaturation.”
Joe Syufy, CEO of VillaSport, also questions Life Time’s move.
“I don’t think it’s a very good business decision,” he said. “There’s a full complement of athletic clubs and offerings on the north side of Colorado Springs already.”
But Bahram Akradi, founder and CEO of Life Time, sees the area as fertile territory for the company. The Springs center will be the fourth in Colorado for Life Time and will help the company achieve “critical mass” in the state, he said.
Akradi, who founded Life Time in 1992, has a personal connection to the Springs; the Iranian-born Akradi moved to Colorado Springs when he was 17. He began his health club career by working in sales at a local club while attending the University of Colorado at Colorado Springs.
He said he was skeptical when the real estate head for Life Time suggested northeast Colorado Springs for a facility, until he visited and saw how the area had grown.
“It’s really a good location.” He added that he’s not worried about having VillaSport essentially just down the road.
“It’s not a factor,” he said. “I think the competition is good for everyone.”
VillaSport’s Syufy, meanwhile, said he’s not too concerned about Life Time’s arrival. “I think it’s going to affect the smaller clubs more than us,” he said.
Poling, of Gold’s Gym, doubts that, saying that VillaSport and Life Time have “very similar product” and similar costs. (Life Time is offering single memberships, minus access to tennis, starting at $49 per month for those who buy now and at $59 once the club opens; single memberships are $75 at Villa.) But Poling does expect his business to take a hit.
“I’m sure all of us will take a loss,” he said. Some members have already told him they’re leaving to join Life Time.
Similarly, Dan Dummermuth, president and CEO of the YMCA of the Pikes Peak region, expects the Briargate Y to lose some members to Life Time.
“There are some people that will leave, we understand that,” he said. “But we believe that eventually they will come back because there’s something pretty special about the Y.”
The YMCA is not just a fitness facility, Dummermuth said. “We’re a community-based organization, a very cause-driven organization.”
The Briargate Y is the largest locally in terms of membership, Dummermuth said — about 14,000 members. Poling said his Gold’s Gym at 7655 N. Union Blvd. has about 6,800 members. (There’s a second location at Powers and Palmer Park Boulevard.) Syufy declined to divulge VillaSport’s membership numbers.
Before a club opens, Akradi says Life Time looks for 2,500 memberships or so through “pre-sales.” The Springs location, he said, “is doing substantially better than that.” Once a club is “fully mature” in about three years, “the typical, comfortable range would be 8,000 or 9,000 to 10,000, 11,000 memberships,” he said.
Life Time has a built-in membership base: It took over Lynmar Racquet and Health Club in fall 2008 and will transition those members to the new center. Life Time declined to disclose membership numbers at Lynmar. The club will shut down after April 30, and the future of the site is “under review,” a spokeswoman said.
Acquiring Lynmar was a way to create a “brand foothold” in Colorado Springs, Life Time says. Life Time originally planned to open its new center in summer 2009, but construction was put on hold when the dismal economy caused the company to slow expansion plans.
The recession also took a toll on memberships at Life Time’s centers, with the annual attrition rate jumping from 34.3 percent to 42.3 percent in 2008, according to a Life Time annual report. The rate fell to 36.3 percent in 2010, the report said; it’s now, Akradi said, “relatively speaking, as good as it has ever been.” He attributes that “to programs that we implemented over the last two three years to connect people with the areas that they really are passionate about and really give them much better programs in the area of their passion” — intensive training programs devoted to, say, biking or a budding marathoner.
Life Time posted an 11.5 percent increase in profit in 2010, to $80.7 million, or $2 per share. The Springs center is one of three large centers Life Time is opening this year.
“The three combined will be nearly a half-million square feet,” Akradi said. “They’re large, large boxes.”
VillaSport also plans to expand. “We have a number of sites under contract,” Syufy said, with plans to add three or four clubs in the next two to three years.
“We’re a family-oriented business, so we’re not driven to growth,” he said. “We just do what we think is prudent and right, and try to find good locations and build them as they come.”
The Springs won’t be forgotten as the company grows, Syufy assured.
“We’ll be in Colorado Springs for a long, long time. We didn’t choose it to be our 20th club or our 50th, we chose it to be our first, so it’s very important for us to be successful here.”
AT A GLANCE:
Life Time Fitness’ new Colorado Springs center, at 4410 Royal Pine Drive, is scheduled to open May 5. The center will employ about 300, Life Time CEO Bahram Akradi said.
The center will be open 24 hours a day except for shortened hours around holidays. It will offer a state-of-the-art cycle theater, a martial arts room, more than 400 pieces of cardiovascular and resistance training facilities, eight indoor tennis courts and a cafe. The center also will have indoor and outdoor aquatics centers. The LifeSpa and Salon will deliver hair, nail and skin care services, along with therapeutic massage. A child center will include an eMac computer center, junior sport court, children’s activity areas and a separate infant play room.
More information: http://clubs.lifetimefitness.com
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