Cover Story Classics
The Schwartz Family - 50 Years of Success at Midtown Athletic Club
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Publisher's Note: Our Cover Story Classics series continues this month with the story of the legendary Schwartz Family and Midtown Athletic Club. This story was written and the interviews conducted in November 2020, during the pandemic, but the history and lessons learned over 50+ years of business are as pertinent as ever. This story was unique in that the father and son of a legendary company were interviewed by the father and son of Club Insider. It was a memorable experience that we are happy to re-share today. Sadly, since the original publication of this story, family patriarch, Alan Schwartz passed away in 2022 at age 91. May Alan Schwartz continue to rest in peace, and may Midtown continue to thrive!
• • •
The year is 1970. A new decade arrives, the space race has been won and Tennis Corporation of America, TCA (now Midtown Athletic Club) opens its doors. A gallon of gas is 36 cents, and the cost of a new home is just over $25,000. It was a different time. Fast forward to today, and Midtown Athletic Club is now celebrating 50 years of success.
Founded by Alan Schwartz and his father, Kevie Schwartz, the family business is now four generations deep, with Alan's son, Steven Schwartz, as the company's CEO, and Steven's son, Alex Schwartz, as the company's Director of Marketing. The Midtown of today is night and day compared to the TCA of the early days, but it was not an overnight change. The key tenet of reinvestment into the business has led to a steady evolution of the company over the years.
Now, with the devastation caused by COVID-19, Midtown has continued its evolution to ensure survival and be poised for new success. This has cut the 50-year celebration short, but as Steven Schwartz says, "We are going to celebrate next year when 51 will be the new 50."
Folks, this cover story is one of the longest in the history of Club Insider, but we assure you it is worth the read. The advice you will be given, the lessons you will learn and the stories you will be told will better round you out as a professional in the health and fitness club industry. We consider this statement true whether this is your first day or 50th year in the business. So, we invite you to grab one or two of your favorite beverages, sit back, relax and read the story of the Schwartz Family and 50 Years of Success at Midtown Athletic Club!
An Interview With Alan Schwartz, Co-Founder and Chairman of Midtown Athletic Club
Norm Cates (NC) - My friend, Mr. Alan Schwartz, it's another real honor for Justin and me to be on the phone with you today for your second Club Insider Cover Story, with your first one having been in March, 2002. Now, Alan, in honor of the 50th Anniversary of your amazing Chicago-based organization, Justin and I are thrilled to be producing this amazing 50th Anniversary story for our readers. However, before we get started, let me wish you a Happy 89th Birthday on November 7, 2020 while we're producing this cover story! That's awesome, Alan! And, Justin and I want to thank you for giving us a chance to do this story with you, your son, Steven, and grandson, Alex. Having reviewed your amazing cover story that we did with you and Steven back in March, 2002, I want to make this very sincere comment based on my knowledge of your life at this point: Alan, IF there was EVER a guy whose life story would make a really terrific subject for a great movie, it's you, Alan Schwartz! So, let's get to work on your 50th Anniversary Cover Story.
Alan Schwartz (AS) - Thank you very much, Norm. Some days, the body feels it... my mind never does... but the body does!
Key Early Moments/Memories
NC - First, Alan, let's begin with your going back and taking us through some of the key moments/memories of those very early days some 50 years ago.
AS - The first memory that strikes me was sitting down with my Dad, Kevie, and noodling, actually over a period of better than a month, on what the hell we could do together that we would enjoy doing. That's because, aside from being a father and son, we were very good friends. And, indoor tennis was HIS IDEA. He said, 'Okay, I taught you how to play tennis. You love the game. We've both have an entrepreneurial spirit. And, if we're going to do it, let's do it big. Let's build the world's largest indoor tennis club!' That certainly was a striking moment, and as soon as he said that, I said to him, 'You know... that's it!' We had discussed a bunch of things, real estate deals, etc., but none of them got me excited until that one! Other ideas had not gotten him excited, either. But, that one hit us both and got us BOTH EXCITED.
Then, he found a piece of land, and we realized that there was no zoning code for this in the City of Chicago! We thought that, if we got into the manufacturing district, that would take care of it. He said, 'We're going to hit a couple of hurdles. One of them is getting the mortgage that we need to do this. And, the second one is the zoning. I'll take care of working with building commissioner Fitzgerald, and I will write the Zoning Code for indoor tennis with him.' And, then, I went out to get the mortgage! Well, he got the zoning code done a hell of a lot sooner than I got the mortgage because I was turned down 16 times! Literally! Literally 16 times!
The late Alan Schwartz
NC - Trust me when I say that I know exactly what you're talking about because I've been there and done that!
AS - And, I'm talking about guys I went to school with and who were very good friends. They went to business schools, they were the bankers, etc. You were best friends with them until you came in and tried to borrow money for a tennis club! Finally, my wife, Ronnie, came to me one day and she said, 'Alan, I just saw a Time Magazine story about a school friend of yours named, Don Parsons, who was written up as being the most disliked banker in Detroit.'
She explains, 'He's the Head of the Bank of Commonwealth, and he's disliked by his banker competitors because he's paying more interest than anyone else. They all have a cozy little group paying very little interest to the depositors, and he's paying almost double to the depositors. He's really raking the deposits in, and he's breaking up that little fraternity they have there! Maybe he will be interested. Why don't you call him?'
Kevie Schwartz
So, Don Parsons was the 17th banker I called. First of all, Don is about 6'4" and weighed about 140 pounds. Our friends called him, 'Shaky Don,' because with that height and no bulk on him, he'd shake a little bit. When I called him in Detroit, I asked him, 'Don, what do I call you now?' And, he said, 'You can continue to call me Shaky!' (he was laughing) And, he asked, 'What are you doing tomorrow?' So, I flew up to Detroit the next day with all the artist's drawings and renderings I had from having already been turned down 16 times. I had all the projections you could think of... best case, worst case, etc. When I got up there, we sat down, and he wouldn't do anything but talk about our fellow classmates for about a half hour! I knew I didn't have that much time with him, so I finally said, 'Well, Don, I have to remind you I came up here to talk about my tennis club idea...' He said, 'Ah, Alan, don't worry about it. What were you looking for?' I told him, and he immediately responded, 'You've got it!' And, I asked, 'What do you mean, you got it? I hauled up all these exhibits.' (pointing to renderings and projections)
He explains, 'Look, it's pretty pictures you're going to show me. I'm sure of that, so don't bother. And, as far as projections, you're probably going to tell me that you're going to lose money the first year, break even the second year and make money the third year.' I said, 'Yes, that is what it says!' So, he continues, 'Are you going to tell me how much a court should cost? I have no idea how much a court should cost! I have no idea if women will even go inside the place at night. That's your problem. That's not my problem!' Then, I asked him, 'Why in the hell are you making the loan?'
Don explained, 'Alan, you were the only guy on the varsity tennis team who would come down and play with us guys on the junior varsity team so they felt like they were part of the action. There I was, never able to make the varsity, but you still came down periodically to hit a few balls with me. I appreciated that. I knew you were a leader then. Second of all, you would kill yourself before you lost! So, I'll take a chance you will do the same thing on this deal.'
NC - That is incredible.
AS - Norm, I thought a lot about the answer to that first question. I also have a third very special memory from the very beginning that I feel clearly qualifies as one of my most outstanding memories from the very early days. The timing is great for this third memory. 1968 was the same year that Open Tennis became open so amateurs and pros could play together. Wimbledon had the Amateurs and the Pros in the same Championships. There was excitement! I knew that, somehow, to survive long-term, Midtown would have to create players and not just rely on tennis going 'Open.' You had to keep replacing players, so I worked with a top pro from Rochester, New York named Spike Gonzalez, no relation to Poncho Gonzalez.
NC - Yes, I know Spike (See Club Insider's July 1997 Cover Story).
AS - Together, Spike and I put together what was the only program on how to teach tennis that the U.S. Government ever gave a U.S. Patent to. It was called Tennis in No Time, and we still use it! It was designed to teach people who had never played tennis or maybe had just played a little at a summer camp or at a public park and get them involved and make it fun for them.
The Family Dynamic
NC - Alan, you started your business (then TCA) with your father, Kevie, so essentially, with your son, Steven, and grandson, Alex involved, it's now a fourth-generation business. INCREDIBLE! I know your father taught you a lot. How did he carry that knowledge over to you so that you could acquire the knowledge and pass it to Steven?
AS - The first thing he told me was real simple. He said: 'I want you to know that, for the rest of your life in business, if you shake hands, that's a deal. I don't give a damn if it's in writing or not, it's unshakable.' And, that has been with me ever since.
The second thing he said was: 'I expect you to have a strong work ethic. If that means 70 hours a week, then it's 70 hours a week. If you want something, then be prepared to put in the hours to get it.' He was a big, strong, bright, hardworking, creative guy. He was a force in his own right.
The third thing he told me was: 'If you ever want to get anywhere, you've got to be willing to delegate because you can't do it all yourself; you've got to have a team. You're going to respect them, delegate to them and not hover over them. If they make a couple of mistakes, so be it providing it's not a fatal mistake. As we bring people into this company, we're going to delegate to them and give them a chance to fly, be their own person and be excited about being that person!'
Those were the big three, but there's one other thing he said: 'Be rounded enough so that, in defining yourself, be sure you are more than just your job. It may be you as a contributor to society... you as a human being... it's NOT JUST YOUR JOB. Be comfortable with the rest of things you do, be a contributor, be a giver and not a taker so you will be proud and feel good about yourself.'
NC - Given Steven worked elsewhere before entering the family business, how did you transition him into the business?
AS - Since he was 10 years old, which he was when my Dad and I first got the idea of building the club, we used to talk a lot around the dining room table about the successes and the failures of each day. The frustrations and the good things. Steven was a very good listener, and he participated in the discussions at a very early age. So, he knew about things, even though he was only ten years old. He seemed to understand, and he actually did. He knew the struggles in the beginning, and he remembered my coming back with those 16 turndowns and many of the hurdles my Dad and I experienced in our effort to get our first deal off the ground. So, he had that background and a great deal of awareness. That was the easy part of the transition.
The difficult part of the transition, and it was difficult, was when he got out of Cornell University, he spent a couple of years as a consultant and four years with Hyatt. He earned a position reporting directly to the owners of Hyatt, the Pritzker Family. He got a hell of an education there, and that also placed him in a position where I was the one who was chasing him to join our family business! He was getting a lot of responsibility and good compensation at Hyatt. In fact, when he was 27 years old, he was their National Director of Development. But, then, we sat down and had a heart-to-heart talk about the difference between salary and equity. I said to him that he was earning a handsome salary, but the Pritzkers would never let go of any equity in their business. Theirs was a family business, and they would keep it that way.
So, with some conditions that he laid down and I accepted, he came in with enthusiasm. And, his transition was eased because he brought with him a perspective that he got from the Pritzkers that was fresh and different. I was not just the teacher. He was bringing a new perspective and teaching me at the same time! I'll give you one example. He said, 'Dad, whenever a deal comes up and someone introduces it by saying: It's strategic deal. What that means is: It loses money right now... but we're justifying it some other way.' He added, 'So, do me a favor. Let's see if we can not get involved in any strategic deals that are losing money. Let's see if we can get some that are making money and are also strategic as we move ahead.'
I always remembered that. I thought to myself how I wanted to buy into a certain deal, and he would say, 'That sounds like a strategic decision you're making to justify buying that loser.'
Justin Cates (JC) comments: 'In my interview with Steven yesterday, we had a talk about strategic vs opportunistic growth, so you guys are in alignment.'
AS - Well, that's great because Steven and I didn't discuss my interview today ahead of time.
NC - When did the official handoff occur? What's your role in the company now?
AS - That's a good question. There's a specific period of time that took place. In 2002, I was nominated to become First Vice President of The United States Tennis Association (USTA), which is a 2-year term, from which you almost automatically move on to be President, I saw what the path was going to be. So, I said to Steven, 'If I'm going to do the jobs of Vice President and President of the USTA, then I'm going to do it right, which means I will be out of here 50 - 60% of the time over a period of 4 - 6 years! We need to spend the first year getting this transition moving, so that, before I take the Presidency, you are running it and people KNOW you're running it. So, when the bankers call up to discuss something, they ask for you and not for me.'
At that point, I stopped going to any meetings with the bankers, and I kept referring decisions to Steven. He liked that way a lot, which was great! I knew it would also be wrong to step back in six years later and ask Steven to step back after that kind of absence, an absence which turned out to be eight years! I felt this way even though I still stayed involved in the business. He stepped up and did an excellent job. He deserved to keep it.
NC - Gotcha. That was close in time to our March 2002 Cover Story with you and Steve. My son, Justin, who's now Publisher of Club Insider, asked Steven to share his perspective on all of this. So, let me now ask you. Alan, from the point of view and perspective of the Dad: What positives and negatives did you experience being involved in and running a family business with your son?
AS - That's probably the most difficult question you've asked. Before I answer your question, Norm, let me say this to your son. Justin, your Dad was so proud of you that all of us who received Club Insider really knew how you did in every football game since you were 13 years old and after! I'm not kidding. You have a father who really cares about you. I feel lucky the same way. But, Justin, you're very lucky. Your Dad was very proud of you, and he let everybody know it!
JC - Thank you. That I am!
NC (laughing) - Alan, thank you for that... for remembering those proud writings of mine about Justin's football efforts. That's been a great joy for me. I think it would be easy to say you and I are Blessed Dudes!
AS - I thought for quite a while about this question, and it finally boiled down to the most difficult thing being to find the right balance between being a father or son and being a colleague. How do you find a balance between being a father and a colleague... and a friend... and a peer? Someone you can just have a beer with afterwards and let it all out, but at the same time, show the respect you learned when you were the son and that you hoped to have from your son when you are the father. There were some times when one of us would get upset and say something really harsh to the other one, and then, it took a while to be able to separate the fact that they weren't criticizing you, they were just criticizing a particular thing that you did. That's DIFFERENT than criticizing YOU! At first, I did take it a bit personally when my Dad would come at me and say something like, 'With all the education you had, how could you conclude something that illogical?!' Sometimes, he added a word in there you wouldn't print in your magazine!!!
NC - Would one of them begin with an 'F?'
AS - Right, Norm... and it would end with 'ING!!!' (laughing) Then, the other way around then; sometimes, I would catch it from Steven when he would say something like, 'Keep out of this one because you're discussing this with other people when you're out of touch!' I would think: What do you mean I'm out of touch? But, he'd be right, particularly when it came to the latest in fitness. They couldn't ever get me out of touch on tennis or finance, but I was out of touch on fitness and the latest in technology.
Seriously, though, I really enjoy being Steve's friend. Steven is my best friend. I will make that as a flat-out statement. He's got many other very, very good friends, too. And, one may, in fact be, his best friend. But, at this point, he is mine. And, he's developing that relationship quickly with his son, Alex, whom I'm very fond and extremely proud of.
In conclusion, it's that balance that was the most difficult thing. I think I've got it now, because at this point, I know that, if I say something harsh to Steven, he knows I'm not criticizing him but rather a particular act or conclusion. And, vice versa when Steven voices criticism.
NC - That's a great balance to have, Alan!
Looking Back
NC - When you look back on your truly amazing career, what would you say are three of the most important developments/experiences you have had?
AS - The three most important thoughts I have are:
1. Understanding that there is a time to cut losses on a given deal and doing so on a timely basis. I think my tendency is to: Keep after it! Keep after it!!! I can't be that wrong! And, chasing it longer than I should and not recognizing I made a mistake. Cut your losses!
2. You can't turn a battleship around in a lagoon! I learned this big lesson as President of the USTA. They'd been in business for 125 years when I came in there. I stepped in, and I wanted to change some basic things in a major way. But, I'll tell you, it doesn't happen overnight... it doesn't happen in a month... it is literally a question of years! The battleship needs room and time to change course!
For example, before I even got to be First Vice President, I spent five or six years as a Board Member. The Board felt the most important thing that they had to do was run a successful U.S. Open Tennis Tournament. That was their main reason for being... to run those tournaments. The USTA owned that tournament, and they made a lot of money with that tournament. That was their goal. When I got on the Board, I said, 'If that's your Mission Statement, I joined the wrong Board!'
Then, we had a long discussion, and they asked me, 'Do you have a better idea?' I said, 'Yes, I thought about it before coming here. I've got eight words: To Promote and Develop the Growth of Tennis. That's our Mission! It is NOT the U.S. Open. That's a vehicle to get publicity for our sport and some money to do our real work, which is to expand the sport and bring as much joy to as many people as possible.'
You have to understand that, at this point, there were two new members who came on the Board, a gentleman named, Gene Scott, and me. We were actually the first people in 125 years who ever made money from the sport to be on the Board! Before, if you were a tennis pro giving lessons, or if you were an owner of a tennis club, or if you were a writer and wrote books about tennis, or if you were a writer for a newspaper, you were barred from the Board. For some reason, they let that bar down and let the two of us on. Scott was a writer, and I was a club owner.
So, when I made the suggestion to, 'To Promote and Develop the Growth of Tennis,' this same very stodgy Board said, 'Promote? What are we, hucksters? Growth? Is this cancer?' I'll never forget that meeting! It was a long, long meeting! Finally, it was over, and I had swung a majority of the people over, adopting the new Mission Statement. Now, between the adoption of that and the implementation, there was a long road, and it took two years before they acted on and finally endorsed the new mission statement, which stands unchanged today. So, that's why I use the example of turning a battleship in a lagoon.
3. Appreciating the difference in skillsets of strategizing and implementing. It's one thing to strategize. It's another thing to implement. And, if you're lucky enough to find one person who can do both, you're lucky. I was lucky. Steve has both, though he prefers strategizing. Don't downgrade someone if they don't have both. Fill the slots with two different people.
NC - What was the most FUN time/era you can remember in your amazing career?
AS - I think the most FUN year was clearly the year before COVID-19. Not just because it was our best year business wise, but it was the first full year I had with my grandson, Alex, in the business. If I had to pick one thing that we did a little bit of but I wish we'd done more of was that, on Wednesday afternoons, the three of us would get together and have lunch together. We'd talk business. We'd talk personal. I first sensed Alex had the skills to take over someday. I'm sure of it now. It's going to take him a few more years, but he will be ready. What could be more fun than having time with your son and your grandson at the same time!?
The other fun memory was during my first year as USTA President... I had basically divorced myself of 90% of the day-to-day business that Steven was running. At that time, 17 years ago, the USTA budget was $250 million a year! People don't realize that the USTA actually owns the entire U.S. Open Tournament, which generates $250 million annually. In my day, it was $170 million. If you've got that kind of money to reshape priorities, that's a lot of fun. You're not focused on where to get the funds from, you're focused on where to spend the funds wisely!
Combine that with the fact that, when you go to Wimbledon as USTA President, you sit in the Queen's Box seats for as long as you want. It's a two-week tournament. I did it for one week, but I was entitled to the full two weeks. One time, we were sitting in the Queen's box at Wimbledon when it started to rain. Who did I get to sit and talk with, one-on-one, for 30 minutes? None other than Margaret Thatcher! I mean, who is Alan Schwartz to be talking with Margaret Thatcher, one-on-one, for 30 minutes! Bill Clinton was there that day, and my wife, Ronnie, talked to him. When you go to the French Open, you sit with the French President and dine with him. Then, the most fun of all is when you go to Australia and sit with their great players of yesteryear (Laver, Rosewall, Newcombe, etc.)... they are the most fun-loving group of people you will find. Those were the 'perks' of the job. The Grand Slams were highlights with much accomplished at Grand Slam meetings, but the rubber meets the road when the President meets with the local tennis leaders of El Paso, Schenectady, Sioux Falls, Charleston and Oakland.
Closing Advice
NC - Given the wild times we're all now being forced to live with and operate in, what advice would you give to other club owner/operators who have been in our industry for many years?
AS - With all of its terrible ramifications, take advantage of COVID and get as lean as possible to survive without cutting muscle or destroying the club culture you've built... because there's a bright light at the end of the tunnel. You can come out of this much stronger, much leaner and ready for action once you've survived this. When you come out of this, your club will be able to be more responsive and quicker, and you will be more competitive than you were before. Justin and Norm, it's a lot easier for me to sit here and say this while my son, Steven, is the one who has to implement this thinking and make it work.
NC - To close this great interview, Alan, what key advice would you give to anyone who's thinking of and hoping to enter our industry and be successful at it over the long haul?
AS - I would say two things for sure:
- 1. DON'T go into the club business to get rich, because you probably won't.
- 2. DO go into the club business if it's a passion; because you have a chance in the club industry to positively influence more lives than you can in almost any other profession than I can think of. You can change lives. You can encourage people to socialize. You can change and modify their exercising habits. You can help people develop a skill that could be a fun skill the rest of their lives. You can help people develop discipline and teach them to follow regimens. And, along the way, you meet and help people meet other people. But, by and large, IF your only reason for going into our industry is for the money, I think you're missing the boat.
NC - Alan, I've looked up to you for many years. Thinking back on our times together many moons ago, I can't help but think about our experiences together. From those experiences, I remember what a fine gentleman you were in your business practices when dealing with me and others. To close this wonderful interview, Alan, do you have anything else you'd like to say to the folks in our industry?
AS - I think I can say comfortably that I've met very few people, if any people in this industry who, once I got to know them, I didn't really get to like. I guess my parting words are that I feel lucky I got into this industry, especially the tennis part, which is such an important part of my life. I want to thank the many people I have met, I've become very friendly with and I've come to respect for adding a significant and happy dimension to my life.
NC - Well, this is another World Class interview Mr. Schwartz, and I tip my black hat to you!
An Interview With Steven Schwartz, CEO of Midtown Athletic Club
Steven Schwartz
Justin Cates (JC) - Where were you born and where did you grow up?
Steven Schwartz (SS) - That one is very simple. I was born in Chicago and raised in the suburbs of Chicago.
JC - Where did you go to school, and what did you study? Did you play any sports?
SS - I went to college at Cornell's School of Hotel Administration, graduating in 1981 with distinction. At Cornell, I was Captain of the water polo team and was lucky enough to do a stint in 1979 with the Concord Club at U.C. Berkeley under Coach Peter Cutino, the Olympic coach. Concord had many national team members preparing for the 1980 Olympics. It was hard as hell but a really fun time.
JC - When researching this story, I was surprised to see you didn't go directly into the family business after college. Please take us through that alternate path and how it led to Midtown (then TCA).
SS - I started out as a financial analyst at a large worldwide consulting firm, doing market research and financial feasibility studies for hotels, resorts and large real estate projects. I started in San Francisco and got transferred to their Phoenix office where we specialized in resort studies. One of our largest clients was Hyatt Hotels, which was expanding dramatically in the resort business. Resorts studies were very difficult and challenging, and our expertise was well respected, so we ended up covering developments in California, Arizona, Utah and Hawaii.
Anyway, I got to know the Hyatt people very well, and they hired me as Director of Development. Their corporate office is in Chicago, so Hyatt brought me back home. I would see my Dad on weekends and would hear about how things were going. As anyone who knows my Dad knows, he can be very persuasive. He persuaded me to join the company. I actually started with my Dad doing non-club real estate deals. We bought apartments in Houston, we did a sale/ leaseback of some bank branches, as well as some other retail developments.
At the time, the company was primarily a tennis and racquetball club business. I would periodically sit in on management meetings. Over time, I got more involved in the business. One of our managers and partners at the time wanted to expand significantly into the fitness business. It was a big investment, and we had partners. So, I dug into the financial model on the fitness side of things. It was clear that multi-rec could be much more profitable if we learned how to do it well. That is how I ended up getting much more involved in the transformation of the company from primarily a tennis company to a multipurpose club company.
Ultimately, I felt we needed to change Senior Management, and my Dad, who is not really a fitness guy, was less interested and kind of looked at me and said, 'If you think you are so smart, you run it.' I hired an outside COO, but it didn't work out. I came into the business through the real estate and finance, not through the sales, programming or operations side, so I needed a great operating and sales partner. Thank goodness Doug Cash was at Midtown; he stepped up and did a great job advancing our company at that stage. Today, we have strong management teams led by Jon Brady and Debra Siena.
The Evolution of Midtown
JC - Congratulations on celebrating 50 years in business! There is so much to cover. Let's start with the evolution of the company from back then to what it has become today.
SS - Thank you. My Dad was a successful real estate developer and one of the top tennis players in the region. He was a State champ, Western District champ and had nine National titles under his belt. He was very active in the competitive level tennis environment in Chicago, which was an outdoor experience centered around one club in Chicago called the Edgewater Beach Tennis Club, but there was no place to play indoor tennis.
The group of competitive guys he played with were all successful businessmen, so they got together and decided to build an indoor tennis club. Dad took on the leadership role among 20 or so partners, and they built the largest indoor tennis club in the world with 14 indoor courts. They built it with a real enthusiast's eye; everything was made to make the playing environment the best it could be. But, what they did that was very different at the time, really even today, is that they did not focus heavily on the advanced players and high performance juniors, or on just renting court time; instead, they focused everything on programming to teach tennis to beginners and to make better tennis players. So, it was all about teaching and training.
This is because they were smart enough to realize that it would be very easy to sell all the prime tennis time after work and on the weekends, but it would be very hard to sell the daytime hours. They focused all their energies on filling those softer times, and as a result, the culture of our company grew into one of programming. At that time, what most clubs did was they built a tennis club and rented a court to a pro who was an independent contractor. All of our pros were on staff, and as a result, we had an active role in how all the programming teaching was delivered.
Next, Dad started doing partnerships with other tennis buddies around the country who were looking to do the same as he did. They would talk, and periodically, we would become active investors and often be hired to run the club. We got involved in some cities that probably did not make sense for us in the long run, but it made sense in the limited view of tennis at the time.
In the late 1970s, early '80s, racquetball was blowing up, and TCA got into the craze. We partnered with Bob Fitzgerald and the Courthouse Group. Bob ended up becoming a President of IHRSA and was the President of our company for a time. We grew to eight or nine racquetball clubs, and out of that came a racquetball and fitness club management contract at a newly built large multi-tenant office complex at O'Hare. That started our management business, now known as Midtown Health.
I joined in 1987, and as I said, I mostly did real estate development at that time. Around 1989 - 1990, we started converting clubs to multipurpose. I sold all the racquetball clubs, and we continued to grow our management business through management contracts in corporate HQ facilities and then some hospital facilities. We started buying out the early investors and other partners, consolidating the ownership almost entirely. Many of these people had been invested for 20 years at that point; some had passed away, others moved out of state, etc. We also began selling or leasing our clubs in markets where we really did not feel we were the right person to be the operator or where my Dad had a friend who he thought would be a good tenant. We probably should have kept Boston; that was a good location for us, but we leased it to a true tennis fanatic, Laury Hammel.
Our reputation was growing, and when banks would foreclose on clubs, they would often contact us to help them work out the loan or to act as receiver. Occasionally, we would buy the club. That is how we grew, and around 1995 - 1996, we made a big play into the outdoor facility business with our Bannockburn location... we added a resort-style pool, much more dramatic outdoor facilities, beautiful tennis courts, and it did extremely well. So, that became the new mantra. We began to make everything like Bannockburn, and that wonderful resort-like experience was very successful for us.
Around 2013 - 2014, the City of Chicago began changing the intersection where our original club was and took part of our land, including our fitness center and some locker rooms. We had never really converted the original indoor tennis club to the outdoor resort concept or added a significant/large fitness offering, so we decided to build a giant indoor sports resort, and we put a hotel on top of it. It opened in 2017, and that has been a dramatic game changer for our company.
JC - That is one heck of a ride over 50 years! And, it is clear how the different periods in the industry's history have influenced that evolution.
SS - Yes, it is important to know that we have reinvented ourselves a few times over 50 years. We started as indoor tennis, added racquetball, then fitness, then resort-like environments and now full-out hospitality with fine dining and a hotel. One of the most important things that we do is constantly reinvest our capital into reinventing our clubs.
Midtown Today
JC - How many locations do you have today?
SS - Midtown has eight locations that we own, and Midtown Health has 23 locations that we manage.
JC - I see you have a cluster of locations in Illinois, but then single locations are spread out from Canada, to New York, Georgia and Florida. What are the benefits of this? Challenges? Future opportunities?
SS - We have grown opportunistically, not strategically. What that means is when we saw a deal we liked, we bought it. We did not say, 'We want to go to Atlanta; let's look for clubs in Atlanta.' We said, 'Let's look for something that fits our investment model, wherever that may be.' The opportunistic expansion concept can be good and bad. It is a good way to get started, but at some point, you need to switch to be more strategic. You get better synergies if you can cluster clubs.
To build a club on our scale, you would be lucky if it cost $20 million dollars or even $40 million dollars. Chicago was $85 million dollars. So, you do not want to be wrong. There are markets that can't support what we are doing. It doesn't mean it's a bad market, it's just not a market for Midtown.
JC - Please describe a typical location (square footage, amenities, services, programming).
SS - They average 150,000 square feet indoors on ten acres. They all have the fitness that you would expect: the do-it-yourself fitness area and the various boutique, studio environments (spinning, boxing, yoga, Pilates, general group exercise, etc.). We have indoor pools, outdoor pools, indoor tennis, outdoor tennis, usually a basketball court, restaurant, spa services, higher-end locker rooms, etc. These are full-service sports resorts, and they also have expensive, upscale finishes.
JC - So, you can never get bored in one of your facilities!
SS - No. And, in each one of those areas, we have a deep series of programs. For example, and obviously, in tennis, we have everything from beginner's tennis, or Tennis in No Time, where we bring people who never played tennis before, up to high-performance and leagues with all kinds of tournaments, private lessons, group lessons, etc. On the fitness side, there is personal training, of course, but many different pre-choreographed group exercise options, as well as our own developed spin, performance, dance and yoga programs. We have a really cool boutique feature we call The Field, which is our functional performance area, and we have a number of programs we have developed for that space. So, our offerings are deep. When a member joins Midtown, they receive a rich mix of fitness programming to sample from and dive deeply into.
JC - What is a truly unique thing found at Midtown?
SS - I think what you have in Midtown is more space, and that space is thought through as a social environment so that you do not just come in, work out and leave. You can come in, work out, see friends, chat, hang out and be very comfortable doing all of it. Space is a luxury, so most clubs have to take advantage of every square foot that they have. What we have done is to make sure we are not as efficient as the other places.
JC - Wow, that is a different thought.
SS - The reason for that is that you want a little breathing room. Space is luxury. Starbucks has a place where you can sit. If they were overly efficient, it would just be a counter. It is very typical to go into a health club and hear them say, 'We have a community social space.' Sure enough, there's a TV with two couches or a couple of chairs and a rug, and it is surrounded by fitness equipment. That is not a communal social space.
A communal social space is a place where you actually do not see any equipment at all. You can't see fitness equipment when you check-in at any one of our clubs. I do not want you to see the fitness equipment. I do not want you to even see any of the sports. I want you to check in like you are checking in to a hotel or going into a fancy restaurant. This is an entrance experience that does not involve hurrying in to get your workout done. It is a place to relax.
Much has been made about the third place, if you have heard of that.
JC - I sure have, and we have written about it a few times. Frankly, I try not to write about it as much now just because it has become so cliché.
SS - It is a cliché, but Midtown is a genuine third place. And, now during COVID, it has become a second place. Since home was the first place and work was the second place, for those now doing both at home, Midtown was needed even more, and it has become many members' second place. If you are working from home all the time, you need to go somewhere just to get out.
JC - That makes a lot of sense. That is a really well-thought-out concept given the world in which we live today.
SS - I like to say, 'We got a promotion: From Third Place to Second Place.'
The Membership
JC - Let's talk about your membership. First, what are the typical market demographics? Any key differences between markets?
SS -They are not exactly the same, but they do have certain similarities. We don't strategically look at a map and say, 'Here is our demographic; this is where we are going.' Instead, we look at opportunities and ask ourselves, 'Do they fit?' We are looking for areas where there is significant density of higher income, meaning $150,000 per household minimum and then dissect the higher categories above. It is kind of that simple. Our average age is probably in the low 40s.
My Dad used to do a complicated formula on professional occupations and education level for tennis because you are looking for a more professional mix and executives. But, when you start getting into these price points, you kind of get into that category anyway. So, there isn't really any magic to this; it is just a function of density and income.
JC - What is your initiation fee? How does it vary, and is it ever discounted?
SS - They range from $0 - $750. It depends on the market and where we are in the renovation cycle. We are trying to get to the point where we can keep and maintain a genuine initiation fee. It is very hard to do. We have done it in Chicago but have not successfully done it in other places.
JC - What are your membership options/price points?
SS - Our average individual dues rate is $200 per month. Average couple is $330, and average family is $410.
JC - If you are able to share, system-wide, how many membership accounts do you have, and how many members does that equate to?
SS - Pre-COVID: 26,000 memberships, 52,000 members.
Midtown During COVID-19
JC - Please take us through your shutdown experience and the re-opening.
SS - The worst thing I have ever had to do is lay off 2,400 people, and we essentially had to make the decision in a period of less than 24 hours. There was a lot of denial around it, but you could see the train's light coming down the tracks. There was no stopping it; there was no getting away from it. For us, it all started in Montreal on a Sunday; they gave us four hours' notice to shut the club down. They announced it in the afternoon via a press release that was in French, then by evening, we had to be closed. It was very hard for us to figure out. What was going to happen? Who do you call on Sunday afternoon? Is it true?
Then, on Monday, we got word that our Rochester, New York location was probably going to shut down, then we knew Illinois was coming on the heels of that and so on. By Monday afternoon, we could see what was happening, so we just decided that we were going to close everything.
We had very long meetings with key Senior Leadership teams trying to figure out all the various moving parts that needed to be coordinated. What is our sick day policy? How much vacation is owed? What notice do we have to give people? Who are we going to keep? What do we have to cancel? What is our financial position? How do we deal with our vendors? What do we do with our bankers? So, we ran down the list and informed staff and members via phone calls and emails. Everyone reading this article knows what I am talking about.
JC - That is just brutal.
SS - Yes, and the thing that made it a little more challenging was that we had a brand-new CFO and a relatively new Head of HR, so they did not know all of the little moving parts that were going to be affected because they were still learning the company. We were not highly centralized and standardized. When you have 2,500 employees in thirteen states and Canada, as well as a management division with 23 clubs, there are just a lot of a different State regulations, Federal regulations, etc. How do we comply? Who do we contact and notify? There were countless questions, and we worked down the list as best as we could.
As you may recall, at the time, people thought it might be a two-week shutdown. Well, we planned for 20 weeks. People were like, 'Are you crazy?' I remember calling our banker and her saying, 'It won't last that long; you don't need to worry.' I insisted, and we cut very hard, very early. We went down to just two or three employees per location, and we clamped down on our payables. When this began, we had phenomenal momentum; our business was doing as well or better than ever before. We were chugging along with projects and initiatives, and suddenly, we had to put a halt to all of it. But, reality did not play out that way, and it still took us the better part of a month to stop the momentum. So, of course, we spent a lot of money that I did not want to spend, just shutting down.
I then spent an enormous amount of energy calling our Congressmen and various political leaders to try to qualify for PPP, which we did not qualify for. We were also in the process of closing two construction loans for projects we had already started. The lucky thing for us is that we had hoarded a whole bunch of cash, not because of this, but because we were about to start these projects. The loans had not started. We knew we were going to have a big tax bill coming up because we were doing well, so we were as cash rich as we have ever been before. So, thankfully, when we shut down, we had the cash pile, but sadly, we have had to burn through it.
We have secured financing for the next year. I feel good about that except for the fact that it is essentially unproductive capital. It is not going to build the business; it is just keeping the business alive. I went through the grief cycle. You know: anger, depression, etc, and now, I am just trying to chug along, keep my wits about me and realize this is going to be a long haul.
JC - How is Midtown doing now?
SS - We realized that the real issue was going to be consumer behavior and psychology: Are people comfortable? Our members love us, so our clubs are very well positioned. They are very popular, and they are very profitable. Members want to come back to our clubs, but what keeps them from coming back is fear. So, our entire focus has been on real, substantive ways to lower risk. It's not just marketing.
We researched and employed responses and equipment that lowers the possibility of getting infected. We were ahead of the curve by accident because we already had a relationship with airPHX. which sterilizes particles in the air. This is an airborne illness, so it reduces the amount of particles flying around in the air. It kills any virus or bacteria it touches, and it is used 100% throughout all of our clubs. They are used within immunocompromised wards in hospitals. Very few other club companies do it, instead using air purifiers and filters, UV light and things like that, which is great if the virus comes to you, but we go to the virus and kill it. We also spray a chemical that is not toxic and will not give you a reaction. Additionally, just the fact that our clubs are so big helps. When you have 40-foot ceilings, it is effectively an outdoor space. And, we have large outdoor areas, so we can run classes outdoors. This is the message we communicate to people who are still hesitant to come back.
Internally, I tell our teams that we are just at halftime. There is nothing more we can do except for getting out there and playing the second half! Right now, we are lucky to get 40 - 45% usage, and we were lucky to get 60% of our pre-COVID members paying. We are selling memberships to new people, but it's not enough to make it a profitable business. So, we are just going to chug along until there is a vaccine. That is all we can do at this point.
JC - As the sun sets on 2020 and rises on 2021, as you mention, I believe most of us realize this is not over. What advice can you offer as we all move forward through these times?
SS - There is a wonderful book entitled, The Biggest Bluff, and I recommend everyone who is going through this to read it. It is about a psychologist who became a professional Poker player to learn how to deal with mastery of a skill, emotional control and the effect of chance.
We were top of our game. We were as good as you can be in our business. Midtown is terrific. The clubs are great, the staff is great, the programs are great and the members love us. We just got dealt a hand that we simply couldn't win. That's just the way it is. We didn't do anything wrong, so beating ourselves up is not a good plan. Instead, staying calm is a good idea and holding our chips back so we don't lose everything trying too hard to do the impossible, which is to make people come back when they are not ready.
JC - Absolutely, well said. I enjoy playing Poker and have written about it before, so I definitely understand what you are saying there. You're talking about something called being 'on tilt' after losing a big or bad beat hand, and it has taken down many great players! Resetting after a hard, uncontrollable loss and making compartmentalized decisions that avoid losing everything requires true discipline.
SS - I am not a poker player, but this book helped me put it in perspective. I think about it like this: You have a pile of chips, and every month is another round. You are going to lose every month. There is no set of cards you are going to get that is going to make this month win. So, if you knew that, what do you do? You either walk away from the table, which in this case, you cannot do, or you just put in the minimum each round until the game turns around. No big bets; just hanging in there. That is our strategy.
I think the other big advice I have is this: If you did not think Government involvement was important, and it was a low-level priority for you before, so you did not get involved in political action items, now you see how important it is! If you are not at the table, you are on the table. You cannot expect politicians to worry about you and think about you just because it is right or just because it is fair. So, we should all recommit to get more involved. Politics is local. Getting to know your U.S. Congressman is a local thing. Getting to know your Mayor is a local thing. Getting to know your Governor is not that hard. Your local State Representative, your local State Senator... these are the people who turn out to be the ones who can affect your business the most. Voting for President is nice, but it is not going to change what happens to your business. Get to know these local people so they support you and so they are not shutting you down. They need to know you to understand the difference your business makes in the community and in the world of preventative medicine.
The Family Dynamic
JC - Having grown up in a family business myself, I must ask: What positives and negatives did you experience being involved in and advancing to run the family business?
SS - Do you have brothers and sisters?
JC - I do not. I am an only child.
SS - Yes, so that makes life much simpler. I had a brother, Andrew, who unfortunately died, and I have two sisters. We all grew up thinking we would be in the business, and at some point, my Dad expected it. But, you know, I kind of went my own way to the hotel side of things. My brother did come into the business pretty quickly after school. My sister was in the business for a while until she had her third child who was born blind, so she quit working to raise him. He has turned out to be excellent; she did a phenomenal job. She and my brother-in-law are unbelievable.
Before I joined the company, I spent some time interviewing people who were in family businesses: my boss at Hyatt (Hyatt is owned by a very wealthy family, and as I was working for one of the family members), all my Dad's friends, my uncle and other people. I did some research, and as you can imagine, I heard some horror stories. So, I sorted through and categorized those horror stories and talked to my Dad about how we could navigate in a way that would avoid or mitigate them as much as possible. My Dad is a very strong-willed guy, but he was incredibly open to listening. This allowed me to join the company.
Of course, it was not all rose petals and perfume; there were some fights. My Dad and I make a great team. He is a brilliant tactician, and I am a good strategist. If you saw us in the office, you might think we were having a huge fight, but really, it is just kind of like a big Jewish family dinner conversation... loud and everyone talking over everyone else, all thinking they are right. So, you would be making a huge mistake to think that we were having a fight that would split us up. We are both big, loud and opinionated, but we are also both very respectful of each other's position and opinions. So, even though I have controlled the company through stock or trusts for probably 20+ years now, I treat it completely as a 50/50 partnership. If my Dad does not want to do something, then I am not going to do it. And, he is the same way with me. He respects me; I respect him, we are both smart and capable, so it works out well. We just don't agree all the time, and because of the complexities of a father-son relationship, there is often more at the table than just the issue at hand.
There were many, many days where I wished I was not working in a family business. Justin, you may feel this, but I do not know... My Dad likes to work all the time. That is just what he does. He does not have any other real hobbies or interests and is never going to retire. He does not want to retire. He is 89. He still comes into the office. I am 61. When I see him on the weekend, he wants to talk business. When I see him at the office, he wants to talk business. If we are at dinner, he wants to talk business. There is no escape. One of the nice things working for Hyatt was that, on the weekends, I did not really have to worry about it. Plus, failure in a family business has its own set of additional problems. So, with the shutdown, I did not want to lose. I do not want the company going down on my watch. But, it has worked out, you know, and God love him, you could not ask for a better partner. You can quote me on that: You could not ask for a better partner.
JC - What lessons did you learn from working with your Dad, and how did it affect how you and your son, Alex, interacted in the business?
SS - First of all, one of the things I learned is that working for other people first is a really good idea because it gives you the chance to make mistakes and learn without having the whole family dynamic. Second, you have the opportunity to get success on your own. A family business can tear you down. Third, you have an opportunity to learn from people whom you otherwise would never have had the opportunity to learn from.
With Alex, I was not sure he ever really wanted to come into the family business, but my Dad wanted him to come in right away. I wanted him to go out on his own and decide what he wanted to do. I only wanted him to come here if he wanted to come here, and that was a little hard for my Dad to accept. I did not want him to feel forced or guilted into coming in. I wanted him to find success and be happy.
Fortunately, Alex had a wildly successful career in advertising before he joined Midtown. Advertising is a crazy business, but he is very talented. The relationship evolved. We were looking for a new ad agency. We had a New York agency that was good, but it was getting expensive and I did not really love their campaigns. Alex wanted to go out on his own, and because we needed a new agency anyway, I told him, 'We will be your first client. We will put you on retainer.' Doing so saved us money, and we got a much better result than we would have by hiring another firm.
We did that for about a year or two. Then, we started a search for a new Director of Marketing, and he said he would like to do the job. So, really, in the end, he came to us. We needed him, and he has been a terrific addition. He doesn't report to me. He reports to Jon Brady, our President, so we respect the distance. It has worked out well. Truthfully, I would like to work with him more (and I know my Dad wants to work with him a lot more!).
JC - That is great! I am glad to hear that.
50 Years and Beyond
JC - What's on the horizon for Midtown? Any future plans for new clubs?
SS - When we get through this thing, I am expecting that our business will come back. It may not come back 100%, but if it comes back 80 - 90%, we will be fine and generating enough cash so that, after a short period of recovery time, we will grow. We will continue upgrading all of our clubs to be just like the Chicago standard, and then, we are going to be on the lookout for new places. As I mentioned earlier, I think the opportunistic background got us to the point where I wanted to be more strategic, but the opportunistic background will serve us well because there are going to be a lot of opportunities when this is over.
JC - To close this incredibly informative interview, once again, congratulations on 50 years! What a truly great achievement. Given COVID restrictions, how did you celebrate this? Any plans for a larger celebration in the future?
SS - We did not celebrate, but we did inform our members. We just can't celebrate right now, but we did tell everyone we are going to celebrate next year when 51 will be the new 50.
An Interview With Alex Schwartz, Director of Marketing for Midtown Athletic Club
Alex Schwartz
Justin Cates (JC) - Please take us through Midtown's marketing strategy during the shutdown, and now, the re-opening.
Alex Schwartz (AS) - Our main focus was and remains the health and safety of our members. We wanted our COVID safety steps to be comparable to hospital ICUs, not just other health clubs. We attacked this with a campaign we called New Standard of Clean. The campaign had three problems to solve...
First, a technology problem. Even before shutdown, it was a strategic initiative to identify and invest in cutting edge sanitation technology for our clubs. One technology we had at the clubs is called airPHX. This is ICU-grade air sanitation technology that creates and circulates active hydrogen molecules that continuously sanitize the air and everything the air touches. We already had these machines in high-touch areas of the clubs: locker rooms and kid's clubs. Right away, in the shutdown, we knew we wanted to invest in more airPHX machines. Since we already had a relationship with the company, we were first in line after hospital orders. While we were closed, we invested in and installed new airPHX machines at every club, continuously sanitizing nearly every square inch of every Midtown location to ICU standards. We didn't stop there, though. Since then, we have since purchased a new product from airPHX, their "mini" machines, for every single group fitness studio at every club in the company. So, every single class at Midtown will have its own airPHX coverage. Those should be installed in about one month, in time for winter.
We also changed our core cleaning supplies. We found a cleaning solution called Aqueous Ozone Solution (AOS) that is made by infusing tap water with stabilized Ozone molecules. We are able to make this solution in-house. It's stronger and faster acting than bleach, but it is also 100% safe and sustainable. After a few hours, the solution breaks down into water and oxygen. That means anyone can use this solution to clean, not just trained housekeeping staff, and it doesn't produce any toxic residue or have risk of irritating people's skin. Technically, you could drink it, but we don't recommend that.
The second problem was a culture problem. AOS allowed us to turn every single Midtown Associate into a cleaner, which was the core cultural shift internally. 'We are all cleaners' is a motto that every Midtown Associate now wears across their chest on our new uniforms, from our General Managers to our front desk staff. We turned it into a rally cry and a point of pride. Every morning, every Midtown Associate gets a bottle of AOS, and every associate is responsible for helping clean the club. It's really inspiring to see how everyone has taken up the challenge and how much pride everyone has taken in keeping the clubs clean.
Lastly, we had a confidence problem. It's not enough to just invest in the technology and unite our team around a mission to keep the clubs safe and clean. We needed our members to have confidence in everything we are doing. To have that confidence, we realized people need to see the new policies and culture for themselves. We developed a video campaign outlining everything we did, an extensive (almost encyclopedic) landing page for our "Clean Campaign" detailing all the science. We created a pneumonic device to help associates and members remember, and talk about, the cleaning technology, the Four Ss: Strong, Safe, Sustainable, and proven by Science. Then, we invited every member to come in for a socially distanced, one-on-one tour of the club. We knew that, once people experienced our New Standard of Clean, they'd have the confidence to come back. And, it's worked so far. We're getting rave reviews from the members who have returned and the new members who have joined us since we re-opened.
JC - How do you go about customizing marketing collateral/messaging for each club?
AS - It's a challenge. South Florida is different than Upstate New York. That said, the first thing we do is find the similarities. For example, after we re-opened, we saw that tennis came back strong at every single location. We decided to focus a marketing effort on Midtown's patented introductory tennis program, Tennis in No Time, at every club. We aligned every location on the dates of the program in October, then pushed advertising to every market. It's been a huge success for us, plus a little friendly competition between locations to see who can get the most sign-ups doesn't hurt.
Where there are differences, we focus our efforts on what we believe will drive the biggest impact for the most people. For example, this summer, our Chicago club moved every single group fitness outside. But, in Chicago, winter is always coming. So, in the fall, we invested in weatherizing two outdoor spaces at the club, one for training equipment and one for classes. We installed wind screens, heaters, the works. Then, we developed a unique campaign for the Chicago club called, Winter Can't Stop You, to promote the two new spaces. We hope what we've done will extend the life of those outdoor spaces, even through a Chicago winter. So far, members are loving it; you can check out the spaces on the club's Instagram page @midtownchicago.
As far as the actual creative collateral, the simple answer is we have a rockstar internal design team. They're incredible at designing beautiful, engaging marketing materials that balance strong branding while being templated enough to be flexible for all clubs.
JC - When a club has a possible COVID exposure or additional and/or modified Governmental restrictions, how is that communicated to affected members?
AS - Our ability to respond to possible COVID exposures is one of the things that really separates health clubs from bars, restaurants and other businesses. We know our customers. We know who is in the club and when and if they were in close proximity with a possible case. That means we can contact trace very well. We're really thankful for the investment in cleaning technology we made and all our new cleaning procedures: Since re-opening, there has been no evidence of COVID spread within our membership at any club. When we do have a possible exposure, we immediately contact trace that person's visit and reach out to anyone who we know they were with at the club.
As far as announcing Government restrictions, and really any other major announcements, our main channel is through email, supplemented by updating our website and social media channels. If a member is personally affected, like a private tennis lesson needs to be cancelled, we'll reach out by phone and try to connect with them directly.
JC - What do you expect and plan to do in 2021?
AS - Our product --our clubs-- are incredible. During shutdown, we were able to transform three clubs to the standard of our Chicago flagship: Bannockburn, Willowbrook and Rochester. Because of travel restrictions, it's been tough to get out to see the new Rochester club, but my Dad just road tripped there this week, and it literally brought him to tears because it turned out so well. We'll definitely focus on getting the word out about the new clubs in those markets.
We believe that, once we are through this, we are in an incredible position to succeed. But, we don't know how long the pandemic will last, so for now, the focus is on keeping the clubs safe, clean and operating well for our members during this difficult time. People spend most of their time at home since their offices are closed. We think the club is a perfect 'second place' for people, so they have a safe place to go, get out of the house and can stay physically and mentally healthy.
JC - We have asked both your father and grandfather, so it is only fair: What positives and negatives have you experienced being involved in and advancing in the family business?
AS - I'm incredibly lucky to be able to join the business at a time when both my father and grandfather are active in what we're doing. I had great relationships with both coming into the business, and one thing I've enjoyed is seeing both with a new context, as leaders in this business, as a part of this business. It's allowed me to appreciate them in new ways.
When I first joined, I'd spend at least two hours every couple weeks sitting with my grandfather and going over financial statements; he loves quizzing me on the numbers and helping me find great insights in them. That's harder now that we're working from home and social distancing.
One of the first initiatives our executive team took on after I started was to evaluate and commit to our company's core values. We did it by thinking of our best teammates across the whole company and distilling the characteristics that they all shared. When we stepped back and looked at what came out of the exercise, I realized something: the values that united our best people were the values that Alan exemplifies. He had created a culture in our company that reflected the best aspects of himself. Those values are: Win Together, Better Than Yesterday, Passionate About Helping Others, Glass Half Full and Kind.
When the first COVID restrictions came, and we had to close the clubs, I got to see my father step in as the emotional leader of Midtown. It was a really hard time for everybody, but even as we worked through those hard times, my Dad had the entire Midtown team ready to run through a wall for him. He was real and raw. He was inspiring.
One thing about my family is we all have opinions, and we are not shy in sharing them. This is my first job where my grandmother will call me to give creative feedback on a piece of messaging. One of my aunts is a writer and adept grammarian. No stray comma goes unnoticed. One of my first moves when I joined the company was to standardize the use of the Oxford Comma in our communications. That helped.
JC - What do you think your generation brings to the business and the industry as a whole?
AS - I believe all people of any generation want similar things: to be healthy, to be happy and to have a community in which they feel they belong. That's what I love about this industry, helping people achieve those things is what we do.
I think my generation cares a lot about making a difference in people's lives, and most Millennials have an understanding that fitness and community are fundamental to health and wellness. The other thing I'm excited about is that my generation treats fitness not as a chore, or even really a hobby, but as a lifestyle. They embrace what Midtown tries to deliver: A place to go to transform their lives.
• • •
Our Sincere Thanks and Appreciation to Alan, Steven and Alex Schwartz for their time and truly forthright nature in interviewing with Club Insider. Thank you also to Shari Tody for her assistance throughout the process. Finally, congratulations to everyone at Midtown for celebrating 50 years of success with the Schwartz Family!
