Like most clubs throughout the U.S., Rodney Steven’s Genesis Health Clubs in Kansas share the marketplace with nonprofit facilities, mainly comprised of YMCA and YWCA facilities. The competition has been fierce due to separate tax exemptions for nonprofit facilities, as opposed to for-profit fitness clubs.
Over the last eight years Steven has been fighting to level the playing field for fitness clubs in Kansas. “Everyone knows it’s right,” said Steven. “It’s just how long we’ll close our eyes to it. We all know that health is an issue in the county and we need legislature to help the profits that are doing a great job, but being put out of business by nonprofits.”
Recently, Senate Bill 72 has been submitted in Kansas Legislature that could potentially level the playing field. The bill states that if a facility has cardio, weight training or strength equipment it can qualify to be exempt from property and sales tax. However, arguments against the bill have stated that the wordage is too vague and could potentially include facilities that aren’t fitness clubs, such as retirement homes with small gyms inside.
According to Steven, who has donated $45,000 to political campaigns in the last two years, nonprofits benefit greatly in Kansas by being able to avoid property and sales tax. “The average sales tax is a little over 8 percent in the state,” he said. “Community centers and YMCAs have built $20 million facilities — some of them are $30 million facilities — that don’t pay property tax.”
Steven said clubs in Kansas don’t want the government to pick winners and losers in the fitness industry. “The nonprofits are building in the wealthiest areas in the state, not to help kids, but to sell memberships,” he said.
According to a news article from The Leavenworth Times in Kansas, County Administrator Pat Hurley was quoted as saying, “I checked with (County Appraiser) Bob Weber as to the impact and loss of revenue to this county. He estimates it would be at least $58,000.”
Genesis Health Clubs, which is comprised of 12 clubs throughout Kansas, has two clubs in Leavenworth County. According to the news article, the County Commission for Leavenworth County has agreed to oppose the bill.
By Tyler Montgomery
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Rachel Zabonick-Chonko is the editor-in-chief of Club Solutions Magazine. She can be reached at rachel@peakemedia.com.
