As the U.S. economy struggles to recover from the Great Recession, there is very little construction activity occurring in downtown Milwaukee.
One of the few projects under construction downtown is the transformation of a long vacant building into a Gold’s Gym health club.
Gold’s Gym will occupy about 43,000 square feet of space on five floors of a 7-story building at 731 N. Water St.
The building is owned by Madison-based Compass Properties LLC, which also recently restored the decorative cornice and did roof improvements to its historic office building at 735 N. Water St. Compass is investing about $19 million in the improvements to the two buildings, including about $13 million for the Gold’s Gym project. The city provided $3.2 million in tax incremental financing (TIF) for improvements to the 735 N. Water St. cornice and riverwalk segment.
Gold’s Gym will be the first new health club in downtown Milwaukee in several years. Other downtown Milwaukee health clubs include the downtown YMCA, 161 W. Wisconsin Ave.; Wisconsin Athletic Club, 411 E. Wisconsin Ave.; Bally Total Fitness, 1237 N. Van Buren St.; and the Milwaukee Athletic Club, 758 N. Broadway.
Downtown Milwaukee has about 15,000 residents and about 78,000 people work downtown. But can the downtown market support an additional health club?
The owners of the downtown Gold’s Gym franchise think so, and the Wisconsin Athletic Club is planning to open an additional downtown location.
“We don’t look at (the other downtown health clubs) as competition,” said Joseph Harrison, managing partner of the downtown Milwaukee Gold’s Gym. “Our competition is sedentary lifestyles. We want to complement the other guys. There’s definitely room for everyone in this market.”
“We think there is enough demand for all of the (health) clubs to prosper,” said Sheldon Oppermann, vice president of Compass Properties.
Keith Nygren, a Wisconsin Athletic Club partner, said the WAC is in negotiations for an additional downtown location, but he declined to disclose any details. The WAC is also renovating its existing downtown location.
Gold’s Gym will provide competition, but the Wisconsin Athletic Club is confident most of its members will stay at the WAC, he said.
“The people who have been well-served will stay with us,” Nygren said.
Most of the members that use the downtown WAC work and live within close proximity, including office workers in the 30-story 411 E. Wisconsin building, Nygren said.
Gold’s Gym will be located in between the WAC and downtown YMCA locations, about three blocks from each. But the YMCA is located west of the Milwaukee River, a bit further away from the bulk of the office space in the central business district, compared to the WAC and Gold’s Gym locations.
“I think the Y is in a much more precarious position than we are,” Nygren said.
However, the YMCA is not concerned about Gold’s Gym coming to downtown, said Bob Heger, chief operation officer of the YMCA of Metropolitan Milwaukee.
“Our view is it’s important for everyone to choose the best path to help them achieve their health goals,” Heger said. “We just want to see people live healthy lifestyles. Members may choose to try a different environment for awhile. But people tend to go to where their friends area and where they feel they fit in the community. The Y is the right thing for many people.”
Gold’s Gym will provide a more high-end offering than most of the other downtown health clubs. The facility will have a 20-meter, 3-lane salt water swimming pool and a basketball half court, which neither the YMCA or WAC offer at their downtown locations. WAC members can use those facilities at the Milwaukee Athletic Club.
Gold’s Gym will also have a cardio cinema room with a big screen TV playing movies for people working out on exercise equipment, three exercise studios, valet parking and a VIP locker room.
Gold’s membership will cost $200 to join and about $60 per month for individuals. The WAC charges $50 to $100 for individuals to join and $60 per month. The YMCA charges $50 for individuals to join and $52 per month.
“(Health club members) want a little more for their money,” said Jeremy Lowell, one of the owners of the downtown Milwaukee Gold’s Gym. “I haven’t walked into any of the other clubs here. I just know as a consumer what I would like to receive for what I pay.”
The downtown Milwaukee Gold’s Gym is expected to open in December.
The health club will occupy a building that has been vacant for about 20 years. Squeezed between two high-rises, the 16-story 735 N. Water St. building and the 35-story 100 East Wisconsin Avenue building, many Milwaukeeans have never noticed the 7-story building at 731 N. Water St.
Built in 1959, the building was laden with asbestos and office tenants were not interested in it when there were other, better options in downtown Milwaukee’s soft office market, Oppermann said.
The redevelopment of the 731 N. Water St. building for Gold’s Gym includes the removal of all of the asbestos, Oppermann said. Gold’s will occupy five floors and has the option to expand into the 6th and 7th floor in the future. Otherwise, Compass Properties will seek a complimentary office tenant for that space, Oppermann said.
The building also has a 3,000 square feet space on the first floor along the riverwalk that is available for a restaurant tenant, Oppermann said.
The Gold’s Gym owners liked the building because of its location in the heart of downtown and the fact that it was one of the few buildings there with a large amount of contiguous vacant space that could be converted into a health club, said co-owner Sandy Hall.
Compass worked hard to sell the Gold’s owners on the idea of opening a health club in the building, Oppermann said.
“We found them,” he said. “We had to convince them to come here.”
The downtown Gold’s Gym will create about 100 jobs, including 15 full-time jobs.
The club has already attracted about 1,000 members.
Gold’s Gym will also enhance the 300,000-square-foot 735 N. Water St. building, which has about 100,000 square feet of vacant space. Tenants at 735 N. Water St. will be able to get a discount on membership at Gold’s Gym, Opperman said, and will be able to use the valet parking service at the health club.
Although many of the Gold’s Gym members are expected to walk there from nearby office buildings, they will also be able to park at a parking structure across Water Street, which is also owned by Compass Properties and used by tenants at 735 N. Water St. Gold’s Gym members will be able to park in the parking structure for free before 8 a.m. and after 5 p.m. on weekdays and all day on weekends.
Compass Properties is also working to get Gold’s Gym and the 735 N. Water St. building connected to the downtown skywalk system.
“Being on the skywalk is a big bonus,” said Tim Ahner, general manager of the club.
Gold’s Gym will also help improve the vibrancy of downtown, bringing life to a long-vacant space near the busy Wisconsin Avenue and Water Street intersection, Oppermann said.
“We feel we’re going to have consistent (customer traffic) traffic throughout the day,” Harrison said.
