Sports Clubs Likely to Play Tug of War With New Customers

It’s the dueling health clubs again.

In the latest dispatches from the workout war here, the super-snazzy Sports Club/Irvine says new members are getting harder to find, and a competitor across the street could make customers even scarcer when it starts to build its Sporting Club soon.

At the extra-spiffy Sports Club/Irvine along the San Diego Freeway, the stream of new memberships has slowed since the club opened over the winter. So far about 4,500 health-conscious office workers have paid the stiff initiation fees to join. (The cheapest is $550 and they run up to $1,500.)

But April was slow, and May’s looking the same way, say the owners. The club can handle 1,700 customers a day; so far it’s not even seeing 1,000.

“And if the other guy builds, we’ll never reach capacity,” grumbles Michael Talla, president of Los Angeles’ Sports Club Co. and one of the club’s owners.

When last heard from, the other guy, San Diego developer Naiman Co., was saying it was just a hop, skip and a jump from building its ballyhooed new Sporting Club. That was last summer. Then it was December.

Now, however, workers are actually grading a patch of ground near John Wayne Airport, and construction may begin as soon as next month.

The delay proved fatal to the proposed kayak run, however, which now exists only in old press releases. It’s been dumped from the health club’s plans. And Naiman is trying to figure out other ways to cut construction and operating costs after building plans came in over budget.

The Sporting Club will have to go a way to upstage the Sports Club/Irvine, which has all the usual stuff: exercise bicycles, weights and a running track. But it also has some Southern California touches: valet parking, a cafe, a conference room and a child-care center.

Sports Club also owns the ultra-chic Sports Club/LA, where the elite meet to pump iron, check their pulse rates and eye each other’s sweat suits. Those who know about these things, like the writers at People magazine, credit the Los Angeles club with starting a whole new trend toward posh health clubs.

Naiman, on the other hand, has been opening its own opulent workout palaces all over the country, which may have distracted it from the business at hand in Irvine. Whatever the problem, Naiman has been slow to get building approvals from the city here. The company should have a building permit in hand and be starting construction by June, its landlord now says.

The second club almost didn’t get started. Awhile back, the two club owners--worried two such clubs might be too much for the Irvine market--talked about joining forces and building only one club. Talla, the owner of Sports Club/Irvine, still insists two such plush clubs can’t succeed so close together, although he may be trying to psych out the competition.

Why would Naiman persist in such a risky gamble as building the second club?

First, the company says, it really believes that the market can bear two fancy clubs. But more important may be the fact Naiman simply committed itself to build the thing long before it became clear what a huge head start its competitor would have.

Then there’s a little matter of a 75-year lease signed with Laguna Niguel developer Birtcher Co., which owns the land. And Birtcher really wants the club: It will make the company’s nearby high-rise office building at the Lakeshore Towers office project more appealing to tenants when the building opens next spring. (That’s the reason so many of these new clubs get built near office buildings. In fact, the other club is part of Koll Center Irvine North, another office project.)

Birtcher has lowered Naiman’s rent and passed up “a significant amount” of revenues from the lease to help the club, the developer says.

“We restructured the lease because the folks across the street opened first, and we wanted to encourage Naiman to build their club,” said Bill Kearns, the Birtcher executive in charge of Lakeshore Towers.

With office vacancy rates above 20% in Orange County and millions of feet of office space going begging for tenants--and with one boxy glass office tower looking very much like another these days--it helps a landlord to have a little something on the competition, like a health club or a fancy restaurant near his building. It also makes local government happy because a health club means some of the office workers are going down to burn calories after work instead of jumping into rush-hour traffic.