CHICAGO — Tennis Corporation of America (TCA) continues to expand. Not only has TCA been chosen by the John Buck Company to manage One Fitness Center (a 6,000-square-foot facility in Chicago's Loop), but the club chain has purchased two facilities: the Athletic Club Weston in Weston, Fla., and Le Sporting Club du Sanctuaire in Montreal, Quebec.
“We bought them both for cash,” Steve Schwartz, TCA's president, told Club Industry. “We have an acquisition line of credit that we used.”
The Weston acquisition marks TCA's entry into the Florida market. A 35,000-square-foot multipurpose facility with 2,300 members, the Athletic Club Weston had been owned by Arvida/JMB, the developer that built the Weston community (including 20,000 homes). Now, Arvida/JMB is selling off pieces of the community infrastructure, such as the health club.
The Montreal acquisition is also a first for TCA, although the company is no stranger to the city (or club). TCA had managed Le Sporting Club du Sanctuaire for five years “with the intention of buying,” Schwartz said.
TCA bought a 51 percent stake in the Montreal club. The other 49 percent belongs to a large investment company. However, TCA is in charge. “We have control,” Schwartz said.
Schwartz speaks highly of the Montreal facility, a 125,000-square-foot club boasting six indoor tennis courts, five squash courts, three group exercise rooms, indoor and outdoor pools, spa, banquet facility and restaurant. “It's the premier club in that region of the country,” Schwartz claimed. “I would say it's the premier club in Canada.”
And, Schwartz added, Montreal is a “fabulous, fun, culturally vibrant city with a sophisticated population.” So the citizens make ideal prospects for the club.
Still, TCA did experience some culture shock entering Quebec. Canadian income tax is 54 percent, and the club members pay sales taxes of 16 percent on dues of $110 (Canadian). Also, while the club is completely bilingual, everything is French first.
“‘The French police’ [a division of the police whose sole job is to enforce the French language laws] are the worst,” Schwartz said. “They cited us because all of our signs were in both French and English in equal-sized letters. The French has to be twice as big as English and on top. They inserted disks into our computer systems and downloaded all of our directories, and recorded versions of our software. They said any new versions have to be in French.”
Not that Schwartz is complaining. Many of these drawbacks actually give TCA a competitive advantage. Although TCA was able to acquire a facility in Quebec, many barriers discourage other club companies from building there.
“Montreal — and Quebec in general — is a very difficult place to do business from a U.S. perspective,” Schwartz said. “The laws are extremely pro-labor. High taxes. Very difficult banking environment — tight credit, tough credit. And a very Socialist-bent government with a strong, radical language activist community that pushes constantly for French everything.”
With these acquisitions, TCA now owns and/or manages 44 clubs, 19 of which are in Chicago, the location of TCA's headquarters. And while things have been challenging at home, TCA is doing great, according to Schwartz: “Times are tough in Chicago because of the intense competition in this market, but better-managed properties are still doing well.”
The Club Industry Advisory Board
Rick Caro, Management Vision and the Spectrum Clubs
Casey Conrad, Communication Consultants and Healthy Inspirations
Ken Germano, the American Council on Exercise (ACE)
Jill Kinney, Club One Inc.
Douglas A. Ribley, Akron General Health System
Stephen P. Roma, WOW! Work Out World
Steven Schwartz, Tennis Corporation of America (TCA)
Julia Wheatley, Women's Fitness Center