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Archive for Friday, March 2, 2012

Lender seeks ownership of athletic club

Lawrence Athletic Club, 3201 Mesa Way.

Lawrence Athletic Club, 3201 Mesa Way.

March 2, 2012

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A default on a $2.4 million loan has created questions about the future of one of the city’s larger athletic clubs and exercise facilities.

Meritrust Credit Union has filed a petition in Douglas County District Court seeking a legal ruling declaring the credit union now owns the real estate, equipment and all other business interests of the Lawrence Athletic Club, 3201 Mesa Way.

An attorney for Wichita-based Meritrust confirmed the credit union is seeking ownership of the club after longtime LAC owner Rick Sells and his corporation Junkyard’s Jym defaulted on a $2.4 million note. But the attorney said the club’s several hundred members should not worry the exercise facility is planning to close.

“I’m confident that everybody involved wants all the people who are working out there to be able to continue working out there without interruption,” said Eric Bruce, an attorney for Meritrust. “Nobody wants to cause problems for anybody who is a member of the organization.”

According to the filing, it appears Sells has agreed to turn the property and the business over to Meritrust. The filing states “Junkyard’s Jym, Inc. has quit- claimed its interests in the subject property to the credit union.”

Sells did not return phone calls seeking comment, and an attempt to reach a manager of the club, which was open on Thursday, was not successful.

It isn’t clear whether Sells remains involved in the management and operation of the club. Bruce was guarded in his comments about the matter, but said to the best of his knowledge Sells was still involved in managing the club.

As for the ownership issue, Bruce said the court filing was an attempt to ensure no other parties had a legitimate claim to the property or business. The legal filing indicated other parties may try to make a claim on the property, including the Lawrence real estate company The Caspian Group.

The Caspian Group, which is led by longtime Lawrence landlord George Paley, won in August a nearly $400,000 judgment against Junkyard’s Jym in Douglas County District Court. That ruling stemmed from a lease dispute at 1202 E. 23rd Street, which housed Lawrence Athletic Club East before it shut down.

Shortly after the August ruling, Sells filed for bankruptcy protection. At the time, Sells told the Journal World he did not believe the ruling or his bankruptcy would impact his ability to keep the club open.

Bruce indicated that Meritrust would begin seeking a new owner for the facility once it has clear title to the property and business.

“If this goes as we want it to, we won’t own it and somebody else will,” Bruce said. “Meritrust is a credit union. It doesn’t want to own a gym.”

Comments

Steve Jacob 2 years, 4 months ago

It may not close right away, but would anyone sign a one year contract right now?

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fan4kufootball 2 years, 4 months ago

Exactly - they really should offer month to month fees right now just to keep people coming in the doors.

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ontarget 2 years, 4 months ago

What caused this business to go bankrupt? Does anyone know?

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somedude20 2 years, 4 months ago

The American people just are not fat and lazy anymore so no need to workout which means less loot for him.

Of course I kid..........buy Geico

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Armstrong 2 years, 4 months ago

Ricky's sparkling personality and people skills

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JackMcKee 2 years, 4 months ago

What happened to the first story?

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RDE87 2 years, 4 months ago

Rick Sells has been cutting corners and doing shady business for years. This news does not come as a surprise to me. He is getting what he deserves. My hope is that the new owners are able to fix all the broken equipment, leaks in the ceiling, etc.

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lunacydetector 2 years, 4 months ago

self assists would be perfect, but then he wouldn't have his basketball courts for tournaments where he can recruit.

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Kim Murphree 2 years, 4 months ago

I am sorry to see this. Rick Sells has been a great friend to Lawrence people in so many ways...supporting charities, and his staff. Just ask the Kiefers--and Coopers Cause folks. I wonder at the voratious appetite of for more $$$ of people like George Paley. Did we really have to put someone out of business, George? Really? Rick has been part of our local scene and local economy for almost 30 years. That deserves some respect. I just bet you could have found a more eqiutable resolution. As for the above comment, "shady" and "cutting corners" I bet you are perfect and have been a business owner that has created hundreds of jobs for 30 years or so, right? In any case, there are many of us who are saddened by this and hope that Rick and Shannon will continue to be a part of the Lawrence business community as well as the community at large.

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Kim Murphree 2 years, 4 months ago

that would be voracious..misstype!

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JackMcKee 2 years, 4 months ago

a good member of the community pays its bills. A good business person doesn't spend more than he makes. The attitude expressed in your comment is exactly the reason that Lawrence is not a good town for business. You'd rather coddle the insiders from competition than allow a business environment where the best succeed. It's sad that Lawrence is so difficult to break into.

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Kim Murphree 2 years, 4 months ago

Oh whatever. I'd rather express thanks to a person who has done so much for so many than judge from the outside. You must have missed the part about how this happened---LAC paid bills with us for over 10 years--on time, always. As for "coddling insiders" -- I have to say I do have respect for people who built this place--and if you don't like it...well....you know the rest.

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Keith 2 years, 4 months ago

Wow, you got so much wrong in your original comment I don't know where to start. George didn't put anyone out of business. Rick lost that suit for a reason, and everything that followed that was his own doing, as was the reason for the suit in the first place.

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08Champs 2 years, 4 months ago

I have known many that have worked for him and with him that were not treated fairly. Obviously he has a life outside of his business, but since this is an article about his business, then examination of his business practices are appropriate. I don't know anyone that would defend him there.

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cammieb 2 years, 4 months ago

I can not speak for others. But, I can say that I taught fitness classes at LAC for over 5 years. Rick and Shannon Sells were very fair to me. They treated me with kindness and respect. And, were very supportive with my family through illness and loss of my parents. If LAC closes, there will be a large void in the community. This is the only fitness club that provides a pool and is Co-Ed.

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1southernjayhawk 2 years, 4 months ago

Since this forum is an ongoing opportunity for all the jerks and small-minded people of the Lawrence area to show up and judge others behind their anonymous cloaks, please allow my 2 cents worth. I have done business many times with Rick and I mean big, six figure business and I have found him to be, without exception, true to his word, honest, and in possession of a big heart. He was running a business, he had to say no sometimes to some people who didn't always take it well. It is a tough business environment and I'm sorry to see his business's demise. A lot of people enjoyed a lot of time and sweat in the environment he created and if LAC closes it will be a big loss for the community.

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Armstrong 2 years, 4 months ago

This comment was removed by the site staff for violation of the usage agreement.

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08Champs 2 years, 4 months ago

Jerk? Gee, thanks. Small minded? Not hardly. VERY familiar with his business over the last 20 years? Absolutely. We'll agree to disagree.

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MIke Mallory 2 years, 4 months ago

I hate to the the barer of bad news to the bank that now owns this place, but there is no one in there right mind that will pay 2.4 million for that business, even with the existing members and equipment. As a owner of a sucessful fitness club, ( not in Lawrence, but local ) there is just no way this can cash flow. I wll predict that they will try and run it for a year or so and then there will be a auction for all the fitness equipment in the building and then the building will sell. Hopefully I will be wrong, but let me know if anyone wants odds on that one. Let me know.

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SofaKing 2 years, 4 months ago

I would bid on one of the working treadmills. $500. Take it or leave it.

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Take_a_letter_Maria 2 years, 4 months ago

Better make that a bid of $500 for two of the working treadmills because you'll need one for parts when the other breaksdown.

I do wonder where he's been hiding the money since he's drafted my account (and I'm sure many others) for dues monthly, just recently filled up his class schedule, and has put nothing into the equipment or building for the past year.

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SofaKing 2 years, 4 months ago

I thought "Out of Order" was the brand of the treadmill.

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