A Different Field of Dreams

CSAug14_Claremont_1806How a passion for athletics led Mike Alpert to his post as The Claremont Club’s president and CEO.

In life many of us have dreams, but we sometimes lose track when attempting to establish careers for ourselves. That’s exactly how Mike Alpert, the president and CEO of The Claremont Club in Claremont, California, came into the fitness industry and drastically changed the future for The Claremont Club.

As a boy growing up, Alpert’s dream was to play professional baseball. “The problem was, I couldn’t hit a curveball,” he explained with a slight grin. “But, I had a pretty good arm, so they moved me to pitcher, and I was a pretty good pitcher, but I couldn’t hit a curve ball and I couldn’t throw one. And I hit too many batters.”

Although fairly unsuccessful in baseball, that experience still left him with a passion for athletics. “I wanted to be in the athletic business,” he said. “When I got out of school, I didn’t know how to do that.”

Alpert was living in Orange County, California, at the time. “I wanted to get into the health club business, but I couldn’t afford to buy property and there was so much competition across the land in Orange County,” he said. “I went to work for a company that my dad worked with — a very large home furnishing manufacturer. I was in sales and marketing. In 1986, I decided I wanted to make a change and do something I really liked. I always liked numbers and ratios, so I went to work for E.F. Hutton as a financial consultant [and] stockbroker.”

Alpert worked for Hutton in Orange County but in 1988 found himself desiring to move to a smaller town. He started looking at central Oregon, thinking he would stay with E.F. Hutton. Fate had a different outlook. “I got there in late October of ’88, and that next month my best friend who ran the downtown athletic club in Eugene, [Oregon], came up to spend Thanksgiving with us, and we went out to play golf one day. I’m in shorts on the third fairway of a golf course. I turn around and look at snow on the mountains and I said ‘John, let’s build the club we talked about here in Bend, Oregon.’

“We laughed because we had talked about it for about 14 years. I went back to work and that was in November. The following March I left Shearson Lehman Hutton and went to work on an archaic business plan that eventually became the Athletic Club of Bend.”

Alpert was able to secure the property for the athletic club on eight acres of land at $1.50 a foot. The stipulation on the sale was that he begin construction no later than January 1, 1993. They beat the deadline and opened on July 1, 1991. “That’s how I got into the business,” said Alpert.

Immediately following the opening of Alpert’s club, Portland developers fronted by Homer Williams began developing the first gated golf course community directly across the street. “It was an incredible golf community, one of the 50 best courses in America,” explained Alpert. “The day they finished construction on their project, our property was reassessed at $8.50 a foot.”

At the time that the Athletic Club of Bend opened, the town had about 18,000 citizens and several gyms that had been around for a while. “I remember when it was being built, all the articles in the Bend Bulletin saying to be wary, these guys from Southern California are going to scam your money, and it was interesting,” said Alpert. “The most amazing part for me was I got to be involved with the architect from the conceptual drawings to the working drawings. I got to oversee with my partner, my best friend, construction and actually learn how large buildings were built in areas that had pretty severe weather, both cold and hot. It was just an amazing experience, and because we had so much property … we had the opportunity to build our club kind of like a charm bracelet.”

CSAug14_Claremont_1833To ensure the club’s success, Alpert leaned on industry veterans like Rick Caro from Management Vision in New York to do an in-depth marketing and economic feasibility study for them. “He said it looked pretty good,” said Alpert.

During this venture at the Athletic Club of Bend, Alpert learned a handful of lessons that would help him down the road. One, he said, was a group of silent partners that made it hard to stay there. However, the biggest lesson was the importance of being surrounded by outstanding people and being able to understand that one person shouldn’t try and do everything by themselves.

Developing the club also gave Alpert perspective on raising capital for the initial build and start up. “It took us a year and $100,000 to realize we shouldn’t do a limited partnership, where we were going to take on 75 to 99 percent of the downside risk and give up all the upside potential,” he said. “We really needed to do it with a small group of investors that would do a limited sub chapter S Corporation or an LLC. Going through all the bank financing was very challenging, but very interesting.”

During the establishment of the Athletic Club of Bend in 1991 to 1992, Alpert had just reached the mile marker of 40 years old. Alpert stayed with the club until about 1995, when issues started arising with the partnership. He decided to step away from the club he had built and move back to Irvine, California, closer to where he grew up.

“When I got to Irvine, I was offered an opportunity to work for Steve Gilmour and Leisure Sports running Lakeshore Towers Sporting Club in Irvine,” said Alpert. “That was a club that was owned by three entities. I ran that club for a little over two years. It got sold to 24 Hour Fitness, which at the time was trying to go public, and wanted a flagship club and wanted to tier [its] membership, and we sold the club to 24 Hour Fitness.

“In the process I was recruited by the same firm in Boston that recruited me for Irvine to go to Claremont, California. The owners were looking to retire and were looking for a president and CEO. I was the lucky guy that got that job, and I’ve been there for 16 and a half years.”

The Claremont Club had the high-end appeal that Alpert evaluates for new opportunities. For him, high-end goes a lot deeper than just the membership price, and clubs that follow the same pattern were the ones that were able to continue to thrive during the recession.

“We spend a lot of time with our managers talking about this,” said Alpert. “I think that any club that’s been successful during this five-year recession, and is still open and operational, all do the same things. We all paint our walls, we all turn over our equipment every year so that every four years there is new equipment, all have locker rooms that you could probably eat off the floor [of]. We preach customer service and how to serve each other. So, what is the defining difference? Is it price and size? For us, it’s community outreach and it always has been.”

When Alpert arrived at The Claremont Club in 1997, he was presented with a grand opportunity, or so he thought. “The one mistake I made was I failed to see the most important report anybody needs to run a business — that was the cash flow report,” said Alpert. “I looked at the income statement and the balance sheet, but I didn’t ask to see the cash flow statement, and when I saw that the first day I almost had a heart attack.”

CSAug14_Claremont_1796In Alpert’s second week, the owners held a luncheon and invited the bank to meet the new president and CEO. “One gentleman shook my hand and said, ‘It’s nice to meet you, Mike,’ and he turned to the owners and said, ‘We’re calling your loan and we recommend we put the club in Chapter 11,’” explained Alpert. “It was actually about four and a half months away from Chapter 7.”

Alpert decided to take massive action and figure out how to get the club back on its feet. But first, he had to figure out where and how to balance out the loan. “I talked to every bank … Bank of America, Wells Fargo, local banks, everything,” he said. “No one would take our loan. Finally, the last stop on the train station was an asset lender out of Anaheim, [California], Fremont Investment and Loan that said, ‘Huh, The Claremont Club, 18.8 acres of pristine property in Claremont, California, and there is no other property there. We’ll do it. We’ll do it on a very, very bad loan.’”

The loan was adjustable every month, was callable every five years and had a floor of 8.5 percent and a ceiling of 15 percent. “It was the only loan we could get,” said Alpert. “That was the challenge early on. And then the challenge was a management group that was very disjointed and dysfunctional. A lot of people were nervous about their position and their future. People that were more interested in climbing the ladder faster than their teammate, than picking their teammate up and helping them — those were the challenges early on.”

Alpert thought to himself that if he could turn this club around it wouldn’t be short of miraculous. “I was asked to do a survey for a REX Roundtable that I’m in, and they wanted to know an accomplishment in my life that I was most proud of in business,” explained Alpert. “It was the turnaround in Claremont. I can actually say I’m more proud of the turnaround we’ve had in Claremont, California than the club that I was part of building and developing in Bend, Oregon. Why? Because it was almost miraculous that we saved that club. [We] not only saved it, but made it with a group of incredibly talented and wonderful men and women. [We’re now] one of the healthiest financially and one of the best clubs in the world.”

To be asked to become the president and CEO of a fitness club is a big deal. However, it’s a much bigger deal to have the composure to discover after two weeks that the club may not be able to continue financially, and still turn it around. Alpert said his keys to success were praying a lot and talking to his dad, who passed away in a car accident three years ago. “I think until the day he died, I don’t think I can tell you an important business decision ever in my life, or social decision, that I didn’t seek his advice out on,” said Alpert. “Probably 85 percent or 90 percent of the time I listened to what he told me.

“I was blessed to have a lot of really good mentors. Other than that, I was fortunate enough to know really well early on that no one person should try to do things all by themselves. I knew the importance of building a group of men and women … that would walk to the corner, hold hands and cross the street together. The importance of people getting bought in on values, vision and [who are] passionate about taking an organization or business that everyone can be proud of. It all boiled down to people.”

Alpert said his dad was the reason for him knowing to lean on people, as opposed to doing it himself. “When I was a kid, my dad ran a very large furniture manufacturing facility, one of the largest in the world,” said Alpert. “I remember being woken up a few times early in the morning and going into our breakfast-nook area of our home. There would be my dad sitting with one of his linemen that was arrested for a DUI, and he’s sitting there with a pot of coffee and the guy is crying his eyes out.”

Alpert witnessed his dad treat employees like they were his sons and daughters, looking after them and their wellbeing. “It was a real eye opener for me, the importance of love,” said Alpert. “I think it’s the most important word in the dictionary. Treating people like your family, you build a group that’s unstoppable, and that’s the bottom line to it.”

Like many club operators during the past few years, Alpert believes Claremont is on its way to bridge the gap between medicine and fitness. However, Claremont isn’t simply looking for doctor referrals to improve its bottom line. Rather, Alpert said, the club is striving to develop programs that doctors can respect and the medical community will recognize as a solution to medical conditions.

Eight or nine years ago, Alpert reached out to his friend and an ex-president of IHRSA, Julie Main. Prior to dying of cancer in 2009, Main had designed the Cancer Well-fit program. “At an IHRSA convention years and years ago, I brought my wellness director with me, and I asked Julie if she would mind if we put a program together like hers at Claremont. We put together our Living Well After Cancer program.

“As of March 1, [2014] … we have put almost 600 women and their families through this free program. It’s been an amazing program and changed a lot of lives … We are the first Project Walk franchise in the world. We opened February 1, 2013. We opened with 17 full-time spinal injured clients. We ended the first year with 40 full-time spinal cord injured clients and Augie Nieto, our first client with Lou Gehrig’s Disease, ALS.”

For Alpert, what differentiates The Claremont Club from any other club in the country is the philosophy focused on changing lives. “They do it with people that could never afford to walk through the front doors of our club,” he explained. “We’re not doing it to run to the bank, we’re doing it to save lives and change people’s lives. In doing so we are teaching citizenship to young boys and girls, we’re making our communities healthier and better, and I think we are building a reputation within our staff as the employer of choice in our community, and as the club of choice because we are on 18 acres and have all the bells and whistles.”

For Alpert, The Claremont Club has come a long way in his 16 and a half years as CEO and president. He has established a management team that is more interested in changing lives and growing the business than it is about itself, he has founded respective programs that could help bridge the gap between medicine and fitness, and he has designed one of the most well-respected clubs in the world.

It has been a long journey for the boy from Southern California that always wanted to be in fitness. In the end, Alpert finally found his place and discovered amazing success in his role at The Claremont Club.

By Tyler Montgomery

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