Fitness clubs complain about unfair competition

A number of urban public-owned recreational centers are unfairly competing with private fitness clubs, a special tax-study committee was told Friday.

But those public facilities are often specifically approved by a vote of area residents, offer a wide range of programs that aren't now provided by private businesses and are much loved by residents, local city, county and special district officials countered.

The 2003 Legislature ordered the Tax Review Commission, made up of citizens and legislators, to look at the conflicts between private and public recreational facilities. Friday, the TRC took public comment on the issue. Among other things, commission members learned:

• There are just over 30 major public recreational facilities in the state providing everything from swimming to child care to karate classes to rock-climbing walls. Often, those public facilities are in direct competition with the 60 private clubs and fitness centers in the state, which usually provide just aerobic classes, weight rooms and exercise equipment.

• Such public facilities usually are subsidized by tax dollars and don't pay sales tax on the equipment and supplies they buy, don't pay property taxes or other special fees that private gyms must pay.

• The number of such public facilities is growing, with several votes taken each year either by city councils or county commissions or school districts or the general public at large to create such public recreation centers.

"This is just unfair competition," said Gary Nielsen, the owner/operator of four Gold's Gyms in the Ogden area. Nielsen, who is also a Plain City councilman, said he pays any number of taxes "and my tax dollars are then used against me" via subsidies to public recreation facilities.

Adding insult to injury, when the current state and local sales taxes were added to amusement businesses several years ago, any gym that also offered dance, aerobic or other such classes had to start charging the sales tax on all membership dues — which previously were exempt, he said.

"West Valley City recently built a $13 million recreational facility. And two miles away is a Gold's Gym," said Nielsen. "They are getting into our pockets."

Roger Tew, lobbyist for the cities and counties, said there are only "a few touchstones" where public facilities operate programs in direct competition with private enterprise.

By far, most public recreational entities operate parks, softball and soccer fields, large swimming pools, basketball and tennis courts — facilities that no private entity is interested in making a go of, but for which there is great demand among the populace. The public's cry for government-sponsored recreational opportunities just grows, Tew said.