Genesis Health Clubs owner Rodney Steven had a short, direct and to-the-point message to fellow supporters of a property tax break bill that was defeated in the Kansas House of Representatives last week.
In an email sent on Monday afternoon, Steven wrote to colleagues: "Toughest LOSS of any kind in my career—still trying to deal with it. Sorry we failed."
The bill was defeated 108-16 on Friday. Supporters of the bill in the Kansas House had tried to restore it after a House-Senate conference committee took the property tax break out of the bill two days earlier, The Wichita Eagle reported.
"We had a couple of very strong people in the House that were against this, and they were very successful," Greg Ferris, a consultant to Steven and a registered lobbyist for the Kansas Health and Fitness Association, tells Club Industry. "We never really got a clear, clean shot at a vote because the chair and vice chair of the tax committee just wouldn't let it move any further than it did."
Steven told Club Industry last month after the bill had passed the Senate that this was the closest he and fellow supporters had ever been to realizing their dream of getting a property tax break for for-profit health clubs approved in the Kansas Legislature. On Tuesday, Steven told Club Industry that it was "too soon to decide" what he and his group plan to do next year or in years to come.
Ferris also was unsure which direction his group will take.
"We're going to evaluate some things," Ferris says. "We may take some different approaches. We may just sit it out a year and come back after that. I don't know what we're going to do, to be honest with you."
The bill received support from more than just Steven and his Wichita, KS-based Genesis Health Clubs. Life Time Fitness, Chanhassen, MN, which has two clubs in Kansas in Overland Park and Lenexa, provided written testimony to the tax committee, Ferris says. A Gold's Gym franchisee in Merriam, KS, also provided support for the bill, among other club operators in the state.
"A lot of people thought Rodney was the only person involved in this," Ferris says. "There are several clubs that have a lot more at stake in this than Rodney does because Rodney doesn't even own all of his buildings. And if he didn't own them, he wouldn't have gotten the tax break. There were six different testimonies that were given at the committee hearing."
The property tax break would have helped for-profit health club operators combat their nonprofit competition, mainly YMCAs that are not required to pay property taxes. YMCAs are the not the only competition—newly built city-run rec centers around the state also pose a challenge to neighboring for-profit clubs, Ferris says.
Opposing Views of the Bill
The bill ignited opposing views from those outside the Kansas Legislature. In an editorial that recapped the end of the Kansas legislative session, The Kansas City Star wrote the Legislature "thankfully rejected some horrible ideas" and called the property tax break to gyms and health clubs "a ridiculous proposal."
Many readers of the Wichita Eagle and Topeka Capital-Journal who had been following Steven's quest for a property tax break the past two years also took exception to the fact that Steven spent a reported $67,000 in contributions to about 70 members of the Kansas legislature. Ferris disagrees with those who asserted that Steven was "buying votes."
"Rodney makes his donations based on his philosophical beliefs," Ferris says. "What Rodney donated was a drop in the bucket compared to what companies and individuals donate in Kansas on a regular basis. I know a lot of people like to draw a correlation because, frankly, they're very narrow-minded and ignorant. Anybody that draws a correlation between a $1,000 donation or a $500 donation and a vote is ignorant."
Lobbying has become a magnified issue in Kansas recently. Last month, the Capital-Journal reported the Federal Bureau of Investigation (FBI) has been looking into a lobbying group called Parallel Strategies and that firm's ties to Kansas Gov. Sam Brownback. (The firm's owners had previously worked for Brownback in some capacity.) The Kansas City Star followed up with its own story on Sunday, reporting the FBI was looking into "pay-for-play" lobbying allegations.
Ferris told Club Industry that Steven is not a client of Parallel Strategies. Ferris added that one of the principals of Parallel Strategies also works with another lobbying group that does have a contract with the Kansas Health and Fitness Association.
"There are a couple of people at Parallel Strategies that we may interview and use as lobbyists because they're good people," Ferris says.