Tuesday, January 1, 2008

Cleveland Athletic Club RIP

By Rick Morris

Over the last quarter-century, America has seen the demise of many old big-city institutions. The end of 2007 marked yet another occasion, as the Cleveland Athletic Club shut its doors for good on December 31 just as it was about to celebrate its 100-year anniversary (although eerily, the club's website still lives on, at least for now).

As a department manager at the CAC in the late ‘90s, I had a front-row seat to the proceedings as this institution’s tailspin developed in earnest. The club had been losing members in droves to upstart competitors in the suburbs since the 1980s and the 1990 federal tax hike that removed the ability of businesses to write off club memberships on their tax returns (a classic empty class-war rap foisted on the American people by George H.W. Bush and the Democratic Congress that ended up hurting the “little guy” employees of private clubs much more than the “business barons” who were members). The downward spiral that ensued was somewhat predictable, as declining revenues led to dues increases and ever-increasing assessments on members – which led of course to fewer members and less revenue.

In 1997, faced with the absolute financial brink for the first time, the club decided to sell to investors and end their 89-year history as a member-run institution. The new ownership slashed membership prices dramatically as a near-term means of boosting the number of paying customers. The strategy was forged by the “turnaround specialists” who crafted a plan for the CAC along similar lines of previous corporate takeovers they had instituted, notwithstanding the vast differences between the CAC and conventional businesses (not coincidentally, this was the first of their attempted turnarounds to fail to succeed). From my perch as club pro and manager for the CAC bowling center (the unit that was the economic engine of the entire club, providing financial fuel for the entire enterprise through the prodigious bar bills of league bowlers and corporate events), I observed that most of the new members joined only because the club was now an affordable family expense and no level of improvement to club services was going to be sufficient for them to stay on when the membership rates rose again. Many of these people said this directly to me. But, faced with a new insular management team that wasn’t entertaining contrary observations, I wisely kept them to myself as did everyone else and did what I could to co-exist with the new order. Unchallenged by any of the holdover managers, the members enraptured by the "white knights" or anybody else, the regime embarked on a wild spending spree which included a huge new workout facility and a marble floor in the men’s locker room that cost into the millions!

As my fellow managers and I moved on to greener pastures professionally, we continued to monitor how the institution was faring. As far back as my tenure (1996-1998), the date December 31, 2007 was stamped on the consciousness of everyone associated with the CAC – because that was the date that the sweetheart deal on the 99-year lease signed in 1908 would expire. Given the worsening financial situation, everyone involved knew that a relatively favorable renewal of the lease would have to be reached in order for the situation to avoid tipping into the abyss. And that did not happen. The “snowball effect” of the negative financial situation in recent years led to the members having to assume control of the institution unexpectedly once again in 2006, and the urgent status quo before the acquisition in 1997 reemerged. Rising dues and assessments were necessary to meet the basic expenses – and membership dropped through the floor. Half-measures in terms of modified bankruptcy filings and the shutdown of the food and beverage operation were desperate attempts to stop what appeared to be inevitable. Ultimately, the clock ticking towards the end of the 99-year lease proved to be the final straw, as the insanely cheap rent negotiated towards the start of the previous century was never going to be even remotely feasible for a renewal.

As a student of history who understood and appreciated the lineage I was a part of during my time at the Cleveland Athletic Club, I am saddened by its passing. The bowling center I ran was in and of itself something extraordinary, an 8-lane house towering above downtown Cleveland on the 15th and highest floor of the building. Like the rest of the club, it saw a ton of history, including the annual Interclub tournament with the Detroit Athletic Club, a competition dating back almost to the inception of the club. There has never been a feeling of competitive accomplishment in my life to match my victory over the Detroit pro in head-to-head competition on his own lanes (where he had never previously lost) in 1998, a win that avenged my shellacking the previous year on my own lanes and a triumph that resulted in my grateful members winning several thousands of dollars in side bets from their Motown counterparts.

I don’t wish for our blog to be a forum for pointing fingers by name at the decision-makers who ensured this fate over the last decade, that’s not how we operate here, but members and employees alike are showing no such reticence as they look back at the final chapters of the story. This is to be expected; if someone such as myself - on the outside for years - is disappointed at this outcome, imagine how those presently involved in any capacity feel at this time. The recriminations are flying fast and furious in the conversations these days and while some bear more blame than others, there does seem to be a decent amount to go around. This is because there were many people at the center of club operations over the years and a wide consensus that made possible the huge gamble that the financial doubling-down in terms of spending on facilities represented. The Euclid Corridor project, which is a massive transportation adjustment project that has torn through the heart of downtown for the past few years, is being blamed in part for putting a crimp in the wedding reception-hosting business, and there may be some truth in this, but decisions made at the club level far outweigh this outside factor in terms of the overall impact.

If for no other reason than the fact that the expiration date of the lease was etched on everyone’s mind long ago, it almost feels like fate to have the doors close for good at the stroke of midnight going into the 100th year. While the institution deserved better than its ultimate fate, as did those who worked to build and sustain it over the decades, everything does happen for a reason and the memory of what it was can never be erased. RIP CAC.

No comments: