and Washington owning 25% each. In April they would close the deal and rename Adolphus Fitness 24/7-Union Square. In desperate need of cash, Washington dropped the membership price from $599 to a “more reasonable” $299, and printed flyers and brochures advertising the new price and 24-hour availability of the gym, which previously closed at 10 p.m. Those changes resulted in a sharp membership increase — from 660 to 1,500. Also added were a juice bar, and aerobics, kickboxing, and trampoline classes that catered to the white-collar professionals in the area.
A TIME OF TRAGEDY
Things were looking bad. Bank loans came in segments, remodeling fell behind schedule, and there were cost overruns. Making matters even worse, some of 24/7-Tribeca’s prepaid members demanded refunds when the gym failed to open as scheduled in July and still wasn’t open by Labor Day. On top of the delays, the $15,000 per month lease on the Tribeca location still had to be paid. Combined with the expense of paying 24/7-Union Square’s large payroll with its team of fitness instructors and a $100,000 tax debt (which was put on a repayment schedule Wilson worked out with the IRS), money was tight to the extreme. “The gym didn’t open [on time]. People get upset when they prepay and promises are not kept,” says Washington.
Expenditures were enormous. When the duo purchased 24/7-Gramercy Park in 1997, then Johnny Lats, they spent a total of $175,000. But so far, in 2001, they had lain out closer to $700,000 for the new locations and equipment. Payroll also skyrocketed as they increased staff. Serious damage control was needed. Wilson took out a secured $100,000 bank loan, leveraging the equipment at 24/7-Gramercy Park as collateral. He let f
rustrated members of 24/7-Tribeca exercise at 24/7-Union Square free of charge while waiting for construction to complete.
Then, on Sept. 11, things went from bad to worse.
Few businesses in the U.S. were unaffected by the tragedy of September 11, and none were affected more than those located in the shadow of where the Twin Towers once stood. Tribeca is one of those areas. Authorities shut down lower Manhattan, which looked as though martial law had been declared. All businesses not related to the financial markets were essentially closed because employees and customers could not get to their locations.
“It took us weeks to get back down there,” says Wilson. “At one point, when we were trying to get our contracting crew down there, they wouldn’t let them in without some sort of letter because the area was heavily patrolled. We couldn’t get any trucks in. It was just very restricted.”
Meanwhile, losses at 24/7-Tribeca would amount to almost $3,000 a day while the doors remained shut in the aftermath of the tragedy. At least 20% of the gym’s prepaid members worked at the World Trade Center. To help offset the losses, Washington and Wilson had stopped drawing full salaries by the end of September. “As far as sales were concerned, that was the end of it,” Wilson laments. Though there