Issue:  Vol. 44 / No. 38 / 18 September 2014
 
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Gold's name change
delays Castro project

NEWS


m.bajko@ebar.com

Workers from Hupp Signs of Chico install a new sign at the newly named Fitness SF gym in South of Market, which used to operate under the Gold's brand. (Photo: Rick Gerharter) 
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The decision by the Bay Area family that held the Gold's Gym franchise to part ways with the international fitness chain has further delayed plans to redevelop the Castro location.

Since 2009 the locally based Jackovics family has sought to expand the building at 2301 Market Street at Noe. Their plans call for adding a third floor of gym space with an expanded women's locker room and another two floors of rental housing.

But zoning issues have bedeviled the project. An attempt to raise the height limit for the property from 50 feet to 65 feet two years ago stalled at City Hall.

Then in late 2010 the gym owners found themselves caught up in a controversy over the political giving of a Texas billionaire whose company licenses the Gold's Gym brand name. It was learned that businessman Robert Rowling and his company TRT Holdings had given nearly $6 million to a political group that then funneled the money to support anti-gay congressional candidates on the fall ballot that year.

The donations enraged the LGBT community, and a firestorm of criticism soon engulfed the famed fitness chain. Some LGBT advocates called for a boycott of Gold's and urged its LGBT members to switch gyms.

Looking to distance themselves from the brouhaha, brothers Zsolt and Sebastyen Jackovics, who bought the Bay Area Gold's Gym franchise nearly 24 years ago, issued a letter to members in which they pledged to leave the chain when their contract expired in September 2012.

At the time they operated the Castro and South of Market Gold's Gyms in San Francisco as well as locations in San Mateo, Oakland, and Marin. They also said every dollar they spent on their franchise fees would be matched with an equal or greater donation to LGBT charities.

Their decision further postponed the planned remodel of the Castro location, as the owner's attention and resources were focused on launching a new independently owned gym chain.

As the Bay Area Reporter's September 13 Business Briefs column noted, the Gold's Gym properties in the city were renamed Fitness SF as of 7 a.m. Saturday, September 15. The switch also applied to the Lake Merritt location in Oakland and the property in Corte Madera in Marin County. The family no longer operates the Peninsula gym.

Signage at the four gyms has since been changed to reflect the new name, as have staff uniforms and merchandise sold at the fitness centers. Instead of Gold's black and yellow palette, the properties now sport orange and black, the color scheme of the San Francisco Giants baseball team.

In a recent interview at the SOMA gym, Sebastyen Jackovics said his franchise agreement with Gold's bars him from directly addressing questions about why he and his family opted out of their affiliation with the brand. His lawyers even advised him not to confirm just how long he was a Gold's franchisee.

"I can say I have spent 23 years in the fitness industry," said Jackovics, 43, who is straight and lives in Marin. "Everything that revolved around that issue we said two years ago and we are just following through on that. The members get it, the members understand."

He added that the decision came down to the family deciding that the "best way to serve our neighborhoods and members was to create our own brand born here in the San Francisco Bay Area."

According to notices the gym sent to its members and a comment posted on its Facebook page under FitnessSFCastro, it intends to keep its monthly dues the same for current members for at least the next two years with the possibility of extending the rates for as long as five years.

"The ownership remains the same. It is the same family, the same management, the same trainers and the same employees," said Jackovics. "We have the same hours, the same classes, the same rates."

While Fitness SF members no longer have access to other Gold's franchises, as they did under their old membership terms, they can access more than 10,000 fitness centers in 70 countries that belong to the International Health, Racquet and Sportsclub Association. Fitness SF recently joined IHRSA in order to be part of its passport program.

"We feel the name on the door is important, but more important are the people behind the name. Our gyms have always been about the people, and that is where the emphasis is," said Jackovics. "Now that we are our own brand, we are able to do what we want and are unrestricted."

Based on postings on the gym's various Facebook groups, members have either applauded the family's decision to leave Gold's or have questioned the sincerity behind the move.

"I'm so proud of the gym for keeping its word and not renewing that contract. It's important to stand on principle and I really appreciate their support of our community!" wrote San Francisco resident Joseph Mott.

Others viewed the switch more as a PR move and asked why their fees should remain at Gold's pricing levels.

"My understanding is the back story is a little more complicated than the purely altruistic version we've been given. More importantly now that they no longer have franchise fees and it will cost us to go to a gym out of town how willing will they be to really give back to the community by reducing our membership fee? Kind of doubt it," wrote San Francisco resident Steven Rangel.

The gym's management said the transition has largely been a smooth one and are hopeful they will not lose members. So far there has not been a large exodus out the doors, said Jackovics.

"You don't know what the future will bring and how people will react to it," he said. "So far our members have reacted with an unbelievable amount of support."

It is unclear how soon a new Gold's Gym will open in the city and begin to compete against Fitness SF. Jackovics would not discuss the terms of his agreement with the company; neither Gold's media spokesman or a franchise representative responded to the B.A.R.'s request for comment.

 

Zoning change afoot

Jackovics did say his family is still committed to remodeling the Castro location and adding housing. The original plans had called for 18 rental units, with the required affordable units built on site, and a separate entrance for residents on Noe Street.

Under the 2009 plans, no new parking would be added for residents. The existing underground parking would remain solely for use by gym members. And the gym's entrance would remain on Market Street, though a reconfigured retail space would be situated on the corner.

"It is still on the books," Jackovics said this month when asked about the development plans, though he couldn't give a timeline for when it would move forward.

Now that his gyms are no longer part of a "huge corporate conglomerate," its resources are somewhat limited, he said, and have been focused on the rebranding effort.

Plus, the same zoning issues from three years ago remain with the site.

The family is working with gay District 8 Supervisor Scott Wiener, who represents the Castro, "because the zoning change hasn't gone through yet," said Jackovics. "There are still some restrictions on the height limit."

Last year Wiener withdrew legislation that would have addressed the change in height allowance. He recently reintroduced the request as part of a larger rezoning change he is seeking for the upper Market Street corridor.

That legislation would zone Market Street between Church and Castro streets as a neighborhood transit district instead of its current classification as a neighborhood commercial district. The Planning Commission must first adopt it before the Board of Supervisors can take it up, a process Wiener estimates will take several months.

He told the B.A.R. this week that he does support the Jackovics' request for additional height limits since recent zoning changes adopted by the city allow for 65-foot-tall buildings on corner lots along Market Street. But due to what Wiener characterized as "one of those quirky planning code issues," the property at 2301 Market Street was not covered by the height change.

"These property owners are obligated to pay extra fees without getting the benefit of every other corner in the district," said Wiener. "I support the rezoning."

He added that he has not seen the full details of the proposed remodel but called the project "an improvement" over the existing 1963 structure.

"We need more rental housing in the city and the neighborhood," said Wiener.

As for the change over from Gold's to Fitness SF, he said he had heard no complaints about the switch.

"I have not heard anything negative about that," said Wiener.

 






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