Mountainside Fitness works out Arizona expansion plan | Crain's Phoenix

Mountainside Fitness works out Arizona expansion plan

Mountainside Fitness – Arizona's largest locally owned health club chain – is turning up the intensity with no cool-down set for at least a year.

The 26-year-old company just opened its 14th center this spring at the Marina Heights development in Tempe and is working on launching two others, in the North Valley and South Valley, by early 2018.

“That will put us at 16 locations,” said founder and CEO Tom Hatten. “There may be a few more after that, but at that point, we may just run out of room in the Valley for what we’re comfortable with in terms of demographics.”

Mountainside faces ample competition in the local market, but upward trends in the region's fitness industry are working in its favor. Plus, the Marina Heights location is nestled next to State Farm Insurance Co.'s massive campus on Tempe Town Lake, across from Arizona State University and Sun Devil Stadium.

Hatten says he had little inkling the company would grow so much when he opened his first location back in 1991. Back then, much like a newbie exerciser, Hatten took small steps.

“My goal back in those days was just to have two fitness centers. My first one was so small. The whole club was the size of a basketball court. So, I never thought we would be this big," Hatten said. "I was ambitious, but I was conservative and I was learning. I was so young at the time – just 22. I didn’t have any partners, so everything was slow.”

One thing that Hatten learned early on was the value of real estate development. For most of his locations, Hatten first bought the land and then built a club, which has given him more control of long-term costs and operations. Each time, he has reinvested his own money, which resulted in an expansion process that has been slow but steady. As the clubs became more successful, Hatten had more money to develop his next locations, making them bigger and nicer.

However, the new Tempe location is only around 17,000 square feet, which is less than half the size of Mountainside’s usual 40,000-square-foot footprint. The facility offers bike rentals and may even offer outdoor classes, taking advantage of Marina Heights’ lakeside location.

According to the International Health, Racquet & Sportsclub Association, there are 650 health clubs in Arizona. The industry trade association says 1.2 million Arizonans go to health clubs, and IHRSA notes that health clubs across the state generate $422.5 million in annual revenue and $18.5 million in payroll taxes. The growth rate of health clubs in Arizona has been robust, surging 37 percent from 2011-2015.

Hatten envisions Mountainside expanding outside of Arizona after the next two locations open in the Phoenix area, though there will be no rush. He wants to remain focused on operations and making the company as good as it can be, rather than expanding just for the sake of growth.

Meanwhile, the fact that there are thousands of workers at the Marina Heights development will be a boon to Mountainside.

“Of all the things that I’ve done in my career, this was the most fun,” Hatten said of the Marina Heights location. "We were recruited by State Farm to come there, which is pretty exciting. They probably could have had anybody. We’re excited to be able to service their employees.”

Mountainside has recruited roughly 100 employees to staff its new facility.

“Tempe is a vibrant community of business owners, families and fitness lovers,” said Pamela Zager-Maya, marketing director at Mountainside Fitness. “We have long hoped to open a location to support this incredible city.”

June 6, 2017 - 11:18am