Two years ago, when Mountainside Fitness in Arizona decided to expand, they took a look at expanding populations in new markets. They took notice of the developing population expansion in Downtown Phoenix.
Like many cities similar to the size of Phoenix, there is an uneven expansion between residential and commercial growth. According to Billy Malkovich, the CEO of Mountainside Fitness, there is a fear of the first move. Do companies wait and see if residents move into Downtown Phoenix, or do businesses make the first move and force residential growth?
Chase Field, home of the Arizona Diamondbacks major league baseball franchise, located in Downtown Phoenix, appeared to be a perfect location for a Mountainside location downtown. Mountainside based its decision to build a club at Chase Field in Downtown Phoenix on a three-fold desire.
The first desire involved branding. “Then, we recognized that a large portion of our existing customer base worked in Downtown Phoenix, but lived in the surrounding suburbs,” explained Malkovich. “We wanted to make sure that our existing customer base had an ‘at work’ and ‘at home’ option. The third reason was really to grow market share and move into a new area. This is our first downtown location for the company.”
Branding was a major factor that came into place when planning began in 2011. There had never been another fitness club built inside a major league baseball stadium, and the Diamondbacks would bring in roughly two to three million people for games each season. That number didn’t include other events that the stadium hosted throughout the year, or the placement of the brand onto Chase Field. According to Malkovich, the placement of the club inside the stadium has ensured that between three and four million people would regularly view their brand, aside from MLB games.
The club was designed to mimic another facility, “Platinum at the Ice Den,” developed inside the Alltel Ice Den in Scottsdale, Ariz. That facility has grown in popularity, and with two expansions, has finally reached 17,000 square feet, a small box for a traditional Mountainside location.
“Platinum at Chase Field,” is a two story, 13,000-square-foot facility that cost the club $1.6 million. Mountainside built the club using the best equipment and design ideas from its other nine locations. The cycling studio, which used Trixter Bikes, has a large window overlooking portions of the stadium and can be viewed from certain seats inside Chase Field. Additionally, other cardio areas of the facility overlook the vast parking lot and Arizona State University.
Aside from members being able to view the outside environment from almost every angle in the club, Mountainside has also incorporated one of its more attractive areas that it has tested in its bigger facilities. A 600-square-foot functional training facility removes the member from the rest of the club and allows for functional personal training, as well as members to use TRX, boxing, kettlebells, flip tires and CrossFit-style obstacles, without bothering the more traditional members.
Malkovich explained that, due to limited space, the designers relied heavily on what was working in other major facilities. He said that the Chase Field location should provide members with a similar experience that they’d receive from a larger Mountainside location.
“We added Fitness on Demand into both of our group fitness rooms,” said Malkovich. “In addition to the live instructor-taught classes, those members also have the ability, that any time there is not a live instructor-taught class, to go in and have a virtual instructor-led class.” Malkovich believes that the virtual classes will work well with the downtown clientele, because the opportunity to get in a workout may not be the same for everyone.
Mountainside also understands the struggle to swiftly get from an office to the facility at Chase Field. Fitness on Demand was designed to give members the ability to experience group fitness at any time, but Mountainside’s big move was installing a shuttle service ($30,000) with five stops throughout Downtown Phoenix.
Unlike a city bus that will reach multiple stops before its final destination, the shuttle leaves Chase Field, arrives at a destination, and then returns immediately to Chase Field. This keeps employees in Downtown Phoenix from having to wait for long periods on a bus before they are able to get into the fitness facility.
Additionally, through a lot of discussions with Maricopa County, which owns Chase Field, they were able to acquire special parking strictly for Mountainside Fitness members. The parking and shuttle played an integral role in Mountainside pursuing memberships within the downtown market.
Malkovich explained how Mountainside began selling memberships by leveraging the relationship they had forged with the Arizona Diamondbacks and Maricopa County. The Diamondbacks assisted Mountainside in developing relationships with major brands that operated inside Chase Field, such as Gatorade, Chase Bank, Pepsi, as well as many others. “Our first large corporate partnership was actually with the city of Phoenix and Maricopa County,” explained Malkovich. “Just to get in there as a tenant, we also did a corporate deal that provided discount memberships to a thousand plus Maricopa County employees.”
Malkovich said offering the discounted memberships was just one of the steps they had to encounter in order to become a tenant at Chase Field. “Maricopa County owns and controls the building, the Diamondbacks are a tenant inside that building, and major league baseball controls what goes on with the Diamondbacks,” said Malkovich.
The relationship with the Diamondbacks has gone well for season ticket holders, as well as current Mountainside members. The 12,000 season ticket holders received a notification of a discount at Mountainside Fitness. Additionally, Mountainside Fitness members received a discount on Diamondback ticket packages. “If you’re a season ticket holder, you’ll get a discounted membership, as well as free personal training. If you’re a Diamondbacks season ticket holder you get a benefit with Mountainside, and if you’re a Mountainside member you get a benefit with the Diamondbacks. Our membership base is right around 45,000, so they like sending out discounted ticket packages to our 45,000.
“What Downtown Phoenix does not have is a strong residential component,” continued Malkovich. “It’s very much stuck in a chicken and egg conundrum. There’s not enough residential component, but yet there aren’t a lot of people that want to be residents of Downtown Phoenix because there aren’t restaurants, and stores and grocery stores. Everyone is waiting to see who’s going to go first.
“While the city figures that out, we looked at it and said, there isn’t a strong residential component, but we have to make sure we reach out to Arizona State University, which has a very large campus directly across the street from us, and all of our corporate clients. Those are our two key players that will feed our business down there.”
Malkovich explained that ASU didn’t have a fitness center for its students at the downtown campus. “Their fitness center right now is only at the Tempe campus … probably a half an hour drive from the downtown campus. The last number I saw, I believe, had 20,000 students in Downtown Phoenix.”
Additionally, the downtown market provides two direct competitors in a Gold’s Gym location and a YMCA. However, Malkovich explained that the parking lot and the shuttle for the Chase Field location, gave them a feature that the other facilities couldn’t compete with. “We have a private parking lot carved out for our members only,” explained Malkovich. “The YMCA can’t offer that, their members have to park in a structure, and Gold’s can’t offer that, their members also have to park in a structure. We have a surface-level parking lot right outside our front door. That’s a big differentiator for us — the ease of accessing our location versus our competitors.”
As the baseball season gets under way, Malkovich believes there will be trade offs in order to function successfully. With baseball underway, there will be millions of eyes on the facility throughout the season. “The trade off will be, during games, it will probably take our members a little longer to get to the facility,” he said. “They certainly won’t have an issue once they are in there. The other trade off will be just like anyone downtown. It will take them a little longer to get around.”
Mountainside Fitness has been a corporate sponsor of the Diamondbacks for about five years. However, the building of the Chase Field location has elevated that relationship due to Mountainside being the only other tenant. “We’re married to each other for the next seven years of that lease, if not longer,” explained Malkovich. “Our success, I see being tied together. We both took a risk in this. Nobody else has opened a facility inside a major league baseball stadium, so we took a risk here and the Diamondbacks took a risk on a very visible space. Our successes will be seen by a lot of people in that space, and our failures will be seen by a lot of people. We are certainly tied in together.”
Mountainside members using the Chase Field location will be able to experience group classes entirely different. In addition to using Fitness on Demand, they will enjoy boot camps throughout the entire building, minus the field. “We never looked at ourselves as being confined to just the 13,000 square feet of space,” said Malkovich. “We are going to utilize the entire stadium and surrounding area as part of the facility.”
Within five miles of Chase Field, Mountainside is looking at a potential membership population of 408,688, according to the 2011 census. Mountainside is utilizing three large digital display boards located throughout Downtown Phoenix to make members, and potential members, aware of the new location right down the street.
“The majority of our expansion will occur within the suburbs, but the main employment bases in Arizona are in Phoenix, Scottsdale and Tempe,” explained Malkovich. “We’ve got a really strong footprint in Scottsdale with three locations, and we don’t have a presence in Tempe, but Phoenix being the largest employment base, we now have a presence there.
“Future expansion you’ll see from us will most likely go back out to the surrounding suburbs,” said Malkovich. “If Downtown Phoenix grows, like a lot of people are expecting it to do, then I can see us moving into different areas of downtown. But, as Phoenix is today, I can only see it supporting the one location. However, three to five years from now, as the population grows, we could certainly do more.
“Our customers utilize the facility as part of their normal routine, regardless if [baseball] is in season, or out of season for the Diamondbacks. Fortunately for us, the majority of the Diamondbacks games are 7 p.m. and later. That will allow our customers to get in there, after work at 5:30 p.m., and be out of the stadium before the baseball game starts. Certainly, we’ll be more sensitive to timing of classes during games, as well as staffing. But, having that members-only parking lot should make every day, a game day or not a game day, an easy experience for our customers. They don’t have to go into a parking structure and battle with all the game traffic to get a parking spot. They just pull into the club and walk into the front door.”
When Mountainside Fitness planned to launch the Chase Field location two years ago they set a budget for $750,000. Malkovich said it was the most difficult build he has ever pursued. From the amount of hoops, to constructing inside a major league baseball stadium, everything was different than simply building a large, independent structure.
The two-story facility, with strength equipment on the first floor, and cardio equipment on the second, finally reached a cost of $1.6 million. With the club opening in early last December, after scheduling and rescheduling around the baseball season, the Mountainside Fitness Platinum Chase Field location has started revolutionizing how members in Downtown Phoenix experience fitness.
By Tyler Montgomery