The Enterprise - Utah's Business Journal July 18, 2011 by Vaughn Taylor

UTAH’S BUSINESS JOURNAL www.slenterprise.com

July 25-31, 2011

Volume 40, Number 52

$1.25

Scheels confirms plans for 220,000 Larry H. Miller Group square foot store in Sandy pursuing sports-themed Scheels, a North Dakotabased operator of a chain convenience stores of national sporting goods superstores, confirmed last week it will build a 220,000 square foot store at State Street and Auto Mall Drive in Sandy. The Enterprise first reported about the company’s plans in its Jan. 17 edition. The store, for which ground will be broken this month, will include a collection of entertainment venues, specialty shops and boutiques and is expected to employ more than 400 people when it opens in September of next year. “We have been studying this market for more than 10 years and we love the overall demographics of the market, combined with the opportunity in all aspects of our business, from hunting and fishing to bikes, golf and ski, to pro and college teams, to fashion clothing and athletic footwear and apparel,” said CEO Steve D. Scheel. “Scheels will open only one new store in 2012 and that is the Sandy Scheels.”

Artist's rendering of the Scheels in Sandy. Ground will be broken this month and the store is slated to open next September.

The Sandy Scheels will feature specialty shops ranging from fashion apparel to technical running gear to hunting and fishing stores. The sport shoe, hiking boot and casual footwear selection will be “designed to be the largest in Utah, with everything from toddler to serious hikers and beach sandals to fashion boots for women,” the company said. Interactive shopping will include a golf shop, bike shop, ski and snowboard shop, canoe and kayak shop ad fishing shop. The gun and hunting shops will have the largest selection of firearms in Utah, the company said, ranging from guns

for everyday shooters to $20,000 collectible firearms. Attractions will include a 65-foot, 16-car Ferris Wheel, a 16,000-gallon saltwater aquarium, a 35-foot tall “wildlife mountain,” a home decor and gift lodge, shooting galleries, shooting simulators, sports simulators, a “walk” of U.S. presidents featuring two fully animated, talking characters, a deli and fudge shop, and a Starbucks Coffee. Karen Jones will manage the store; she currently leads Scheels’ efforts in Iowa. Scheels will anchor a larger see SCHEELS page 2

Tank manufacturer nearly doubling size of plant in Ogden O.P. Tanks, an Ogden-based manufacturer of custom water and oilfield tanks, is nearly doubling in size. The company, formed two years ago, has increased the size of its plant at 1807 W. 2550 S. from 17,000 to 30,000 square feet and making a significant capital investment in equipment used to create the tanks, which range in size from 210 to 500 barrels. Some are as tall as 30 feet, with diameters of more than 15 feet. Overhead cranes are required to manufacture the products. Dennis Barker, owner, said while the company ships nationwide, one of O.P.’s larger clients is Houston-based Newfield Exploration, an independent oil and gas exploration firm with offices in Roosevelt.

“They came to us a couple of weeks ago and more than doubled their order, so we took over some more of the building and are gearing up,” Barker said. O.P. also has a large Canadian customer. A staff of 19 should grow by 50 percent or more as a result of the expansion, Barker said. O.P. Tanks was formed during the height of the recession, Barker said, because he was able to get excellent prices on real estate and equipment. “It was one of the deciding factors in going ahead and doing it,” Barker said. Another factor was the fact that Barker, after selling his stake in a dry-ice blasting business and “trying to retire” found that he see TANKS page 2

The new Prostop stores will blend the Miller Group's sports assets with convenience-style shopping. The Larry H. Miller Group of Companies is preparing to explore a new business venture — sportsthemed convenience stores. In August, the firm converted its Larry H’s c-store at 10986 S. State, Sandy, into Prostop, a store with a hardwood basketball court and hoop and numerous flat-screen televisions broadcasting sports networks in a space festooned

with Utah Jazz, Utah Bees and Miller Motorsports logos. Now, the firm is taking the concept a step further by seeking permission from Draper City to construct a new prototype Prostop at 13900 S. Bangerter Parkway that will have the same amenities but be somewhat different in appearance. In addition, according to Jay see MILLER page 2

Blender maker to expand Orem plant by 100,000 square feet Blendtec, an Orem-based producer of high-performing, durable blenders for both commercial and home use, is preparing to expand its plant by 100,000 square feet, primarily to support the manufacture of a new self-serve smoothie maker. Spencer Taggart, global marketing manager for the company, said expansion of the plant, which now measures 162,000 square feet, should be complete by fall. Kris Pasker of Pasker Gould Ames & Weaver has been chosen to design the addition. Pasker said this is the second time his firm has worked on a Blendec expansion, noting that Blendtec purchased about additional property to the north of its facility from Orem City to accommodate additional parking. Layton Construction was selected last Friday as general contractor. Blendtec is located at 1206 S. 1680 W. and has been making blenders since 1987. Taggart said

the company hopes to complete the expansion by this fall. Dubbed the “Smoothie Shop in a Box,” Blendtec’s newest product is generating a significant see BLENDTEC page 2

Editor's note “Emigration, forced or chosen, across national frontiers or from village to metropolis, is the quintessential experience of our time. “— John Berger ***** In order to observe Pioneer Day, The Enterprise is not publishing a regular edition this week. Instead, this issue contains some of our best stories from earlier this year that are not yet available in the archives on our new website, www.slenterprise. com.

July 25-31, 2011

The Enterprise

SCHEELS

MILLER

from page 1

K. Francis, executive vice president-operations for the Larry H. Miller Group of Companies, the new Prostop in Draper, if approved, will make discounted tickets to Jazz, Bees and Motorsports Park events available for purchase, as well as discount tickets to films being screened at the firm’s various theaters. The Miller Group has teamed with c-store veteran Max Hunsaker and his company, Solutions Marketing and Consulting LLC, to operate the Prostops. Miller will own the land, buildings and the Prostop name. “It’s going to be kind of a unique c-store opportunity where we combine the sports assets of

development called One Fourteen. The property is owned by MicAm LLC. Reno-based Q&D Construction will act as general contractor on the Scheels store and adjacent retail development. RL Engebretson Architects, based in North Dakota, will serve as the lead architectural design team for the Scheels project. CLC Associates Inc., Salt Lake City, will provide site design services and architectural services for the surrounding retail development. Scheels dates back to 1902. Today, the firm has 23 stores in eight states and employs more than 4,500 people. The firm is employee-owned.

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the Miller Group with a c-store,” Lewis said. “It’s going to be a fun concept. At the pumps, if we want to, we might be able to have [Jazz player] Deron Willams saying ‘welcome to Prostop’ on video screens. The new locations are also going to be built for RVs and weekend warriors with their trailers and four-wheelers” who will have a lane dedicated to their larger vehicles. Sites for two additional Prostops are being examined, Lewis said. “Long-term, both we and Max [Hunsaker] look to meld this in as part of the Larry Miller Group,” he said. “It’s a business we know has very tight margins and we want to make sure that besides having fun, that it’s profitable for Max. If it’s profitable for Max we’ll look at going further with him and probably making Prostop another major arm of the Miller Group.”

TANKS from page 1

was going “stir crazy." "I saw an opportunity to capitalize on another business and went ahead and opened it up.” With an engineered combination of robotic track welders, a 10-foot, 26-ton roller, 38-foot plasma table and custom made fit-up beds, O.P. Tanks, before the expansion, was able to produce up to three 400-barrel tanks per day. The company leased its new space with the assistance of Andy McCrady of Crest Realty. Barker said the expansion is being financed privately.

BLENDTEC from page 1

amount of interest, Taggart said. The device, which is 42 inches tall, 22 inches wide and 30 inches deep, weights 280 pounds and can produce a smoothie in less than one minute. Users place a cup in the machine’s holder, choosing from three cup sizes, then select one of seven primary flavors. Four additional ingredients can be added. According to Blendtec literature, in the third quarter of 2010, the number of smoothies on restaurant menus exceeded that of shakes. About two billion smoothies were sold in 2009. Eighty-eight percent of smoothie drinkers would like to see more fast-food restaurants offer smoothies, which command the highest price points in the beverage market, with an average price of $4.69 compared to $3.39 for shakes. Smoothie have an average unit margin of 80 percent, according to company literature. Taggart said the Smoothie Shop in a Box would work well in convenience stores, gas stations, educational institutions, theme parks and arenas. Blendtec currently employs 225 people in Orem, Taggart said, noting that the plant expansion will also include an on-site health

clinic that will complement a gymnasium and a massage center where employees can receive a half-hour treatment for $5. The bulk of Blendtec’s products are created in Utah. “About 80 plus percent of everything we do, everything on a blender, is manufactured, built, bought and developed in Utah,” Taggart said. “We use Utah companies to supply us with the chips and boards and parts we can’t create here, to try and keep as much as humanly possible here in Utah.” Blendec’s “Will It Blend?” series of YouTube videos has received more than 500 million views, Taggart said. The videos feature CEO Tom Dickson demonstrating the capabilities of the firm’s products by “blending” items that range from iPads to golf balls, marbles and rake handles. Dickson introduced his patented “micronizing” grain mill in 1975. Blendec debuted in 1987 with the Champ, a multi-function kitchen machine primarily used as a bread mixer, blender and a food processor. In 1995 as the smoothie market was heating up, retail food outlets turned to Blendtec to adapt blender technology for commercial use. Blendtec developed the first blender to use a microprocessor to govern the speed of the motor.

Work to begin on 110,000 square foot 'Chinatown' in South SL

Artist's conception of Chinatown, whose anchor will be a 30,000 square foot 1st Asian Supermarket. Utah’s growing Asian population will soon have a new retail destination. Construction is scheduled to begin March 21 at 3390 S. State St., South Salt Lake, on a new 110,000 square foot Asian shopping center, named Chinatown. The majority of the development — 66,000 square feet — will be housed in the former Rocky Point Haunted House building, which will undergo renovations during Chinatown’s third development phase, according to Andrew So, president of Chinatown Investment Inc., the Utah wing of a company responsible for developing similar Chinatown shopping centers in Orlando and Philadelphia. All told, construction of the

State Street is scheduled to last 14 months, So said, with a grand opening tentatively scheduled for October 2012. The first phase of development will include the construction of a 12,777 square foot strip mall facing State Street, which So said will house a variety of Asian-themed retailers. Chinatown’s second phase will include the construction of the development’s anchor tenant, the 30,000 square foot 1st Asian Supermarket, which will face Main Street. The final construction phase will renovate the Rocky Point Haunted House building into an indoor mall that will sit in between the supermarket and strip mall. see CHINATOWN next page

The Enterprise

July 25-31, 2011

CHINATOWN from previous page

So said his company is in the early stages of securing tenants, but added that the initial lineup will likely include a Japanese, Vietnamese and three Chinese restaurants, an Asian hair salon, Asian bakery, massage business and a credit union. The development will also feature 270 ground level parking stalls. Chinatown Investment Inc. acquired the 5.6-acre parcel in 2007 and received project approval from South Salt Lake in 2008, but was forced to wait out the recession before breaking ground. “The market has been tough,” So said. “We had a lot of interest in 2008 but our company decided not to take action at that time. We’ve been watching the market and we think that the time is right to begin developing.” Chinatown Investment has enlisted the architectural services of Fred C. Cox Architecture to design the development. Murray-based Kendricks Brothers Construction will act as general contractor. Chinatown will cost $20 mil-

lion to develop, according to So, who said his company has secured a combination of private financing from New York and Hong Kong investors, and will use additional financing from Zions Bank to complete the project. Two percent (55,000) of Utah’s 2.7 million residents identified themselves as Asian in the 2010 census — a 49 percent increase since 2000. Still, So said, Utah’s Asian population is smaller than his company prefers, but after conducting market studies, Chinatown Investment found Utah’s returned missionary population, along with a growing number of people studying Asian languages, to be a sufficient enough buttress to begin building. “We’ve done similar projects in Orlando and Philadelphia and believe that each large city needs a Chinatown because we’re seeing growing populations in Asian communities,” So said. “We’re seeing a lot of Asian communities scattered around the valley so we’re hoping that once we have this kind of development, we can gather all of the Asian communities to shop, eat and be united … to have place for them to celebrate Asian festivals.”

Swire Coca-Cola to nearly double size of Draper facilities Swire Coca-Cola USA, Draper, plans to nearly double the size of its corporate headquarters, warehousing and distribution facility at 12634 S. 265 W., Draper. Currently measuring 402,577 square feet on a 87.6-acre site, plans call for ground to be broken in April for an additional 346,842 square feet. The project should take between nine and 11 months to complete, said Jeff Edwards, vice president of IT/logistics. Big-D Construction, Salt Lake City, will act as general contractor. The addition has been designed by Architectural Nexus, Salt Lake City. “We’ve always planned for expansion here at some point in time and were just waiting for business conditions to be right and our growth to be right,” Edwards said. It’s already our corporate office and intended to be a central distribution center for us for a lot of our existing sales centers. We operate in 10 different states. Because of the growth of the

number of our products over the last several years we really have to work at more of a distribution center concept. Most of new space will be dedicated to storage. We’re just plain out of space. And the ability, logistically, to move products more efficiently. We’re stacked on top of ourselves right now.” Swire Coca-Cola USA’s bottling plant is located in West Valley City. Draper is the location of the firm’s largest sales center. The firm employs about 450 people in Draper. Expansion of the Draper facility will take place both north and south of the existing corporate offices, warehouse distribution building, vending building, vehicle maintenance building and fueling station, on which construction began in 1997. Draper City officials have approved the project. “We have a good relationship with the city and the community and we’re very excited for this decision that will keep us here, distributing product from here

to both Utah and other areas,” Edwards said. Swire Coca-Cola USA is a subsidiary of Hong Kong-based Swire Pacific Ltd., which traces its roots back to 1816. It is the exclusive Coca-Cola bottler in Taiwan and in seven provinces in mainland China. In 1978, desiring to expand its soft drink business see COKE page 5 THE ENTERPRISE [USPS 891-300] Published weekly by Enterprise Newspaper Group Inc. 825 N. 300 W., Suite C309, Salt Lake City, UT 84103 Telephone: (801) 533-0556 Fax: (801) 533-0684 Web site: www.slenterprise.com. For advertising inquiries, e-mail david@slenterprise. com. To contact the newsroom, e-mail barbara@ slenterprise.com. Opinions expressed by columnists are not necessarily the opinion or policy of The Enterprise Copyright 2011 Enterprise Newspaper Group Inc. All rights reserved Periodicals postage paid at Salt Lake City, UT 84199. POSTMASTER: Send address corrections to P.O. Box 11778, Downtown Station, Salt Lake City, UT 84147

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July 25-31, 2011

Small Business Spotlight Phipps Enterprises 695 N. 900 W. Kaysville, Utah Phipps Construction and Service Master by Phipps are companies that perform disaster recovery, restoration and remodel services, both commercial and residential, in Salt Lake, Davis, Weber, Summit and Morgan counties. The company is a family owned and run business. Principals are Steve, Marie and Bryan Phipps, who have been in business for 34 years. The firm has about 30 employees. Steve specializes in commercial remodels and repairs while Marie and Bryan focus on residential. Kris Mosley manages the Service Master side of the business, and has more than eight years of experience. Phipps is a preferred provider for many insurance companies. Whether it is water, fire, sewage or molds, the company’s staff can clean up, dry, sanitize and get customers back in their homes as soon as possible. Phipps’ ability to work with commercial clients and school districts on larger jobs ensures its competitiveness in the marketplace.

••••• Q: What brings you the most satisfaction with this business? Marie Phipps: The greatest satisfaction is helping someone in a time of need. A disaster is hopefully only experienced once in a lifetime and our ability to make our customers feel that “someone cares” is an opportunity for us to help our neighbors. Our clients are always happy to see us arrive and seem to be relieved that there is someone who really cares and is willing to work with the insurance companies to get their problem fixed. Q: What brings you the most disappointment? Phipps: The greatest disappointment is when the customers have a loss that is not covered by their insurance. That usually means that they either must foot the bill themselves or try to do the job themselves. Unfortunately, they are not familiar with the many problems that are caused by mold or moisture. The second area would be insurance fraud. There are always a few consumers looking to take advantage of their insurance companies by filing claims for damage that already existed or goods that are over valued.

Q: How has the recession affected you? Phipps: We have been fortunate that the recession has not greatly affected us, since most of our business comes from insurance and disaster recovery. We have seen a decrease in the remodeling but have offset that with larger commercial jobs. We have always been careful not to over extend ourselves and have been conservative in our purchasing of equipment and vehicles. We also expanded our marketing efforts, and put into place a program to

recognize agents for referral business. Q: How you feel the Utah economy is doing? Phipps: We are seeing some improvements in the Utah economy but it appears the housing market continues to slump. This has caused some homebuilders to try and jump into the remodel business, but since most of our work is through the insurance industry the effects have been minor. We continue to thrive based upon our reputation within the insurance industry. The competition in the

disaster recovery sector continues to grow but we have been fortunate to have built a reputation of being reliable, efficient, caring and professional. We have been fortunate to work with Mountain America Credit Union since our previous banking institution was closed by the FDIC. We were looking for a banking source that was local, understood the needs of small business and had flexibility in the services they provide. In all cases Mountain America answered the challenge.

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Major outlet mall in Lehi is back on track By Barbara Rattle The Enterprise A 50-acre outlet shopping mall proposed in Lehi in 2006 but mothballed due to the recession is back on track. Newport Beach, Calif.-based Craig Realty Group, developer and manager of a number of upscale factory outlet centers, and Lehibased Legacy Retail LLC, plan to break ground in late summer or early fall for Outlets at Traverse Mountain. The development, to be located on 50 acres directly south of the Cabela’s sporting goods store, will consist of about 400,000 square feet containing between 130 and 140 stores, said Craig Realty Group president and CEO Steven L. Craig. Pre-leasing activity has been abundant, Craig said, although he declined to identify any of the project’s future tenants, other than to say that some will be new to Utah and others will be better versions of stores they already operate in the Beehive State. “We’ve had a lot of strong interest in the property,” Craig said. “I think people have a lot of confidence in the consumer there — larger families with maybe greater needs to buy apparel, and that’s primarily what we’re in.” Phase I of the Outlets at Traverse Mountain will consist of about 225,000 square feet and should open in late summer to early fall of 2012 with a threestory parking garage that will abut Cabela’s parking facilities. A San Diego company is designing the center, while Craig said his firm is in the process of interviewing local contractors and touring projects they have completed or are currently working on. “We’re attempting in every way to create not only a place where you can do outlet shopping but a place where it’s truly an

COKE from page 3

enjoyable shopping experience, from parking the car to getting out of the car and walking to the shops,” he said. “We’re putting in a lot of features such as weather protection, but you can still get all the sunlight. A fitted glass canopy will cover a lot of it. It’s especially crucial for us because when the weather’s getting pretty tough, that’s our busiest shopping season, so we want to make it as comfortable for everybody as possible. We’re also famous and well-known for building the nicest restrooms in the world. In this particular market we’ve focused very heavily on doing a lot of family restrooms, because there are many families that have two or three young children and you’ll be able to take them to a special place and not worry about one of them getting away. You can corral them all in one spot at the same time.” Shops will average about 3,200 square feet and have three to four employees on staff at any given time, Craig said. “Smaller stores are one of the pluses of outlet shopping,” Craig said. “You don’t have a store where you can’t find a person to help you or you can’t check out quickly, like in a lot of the bigger stores today. You get a good selection of that company’s particular product. It’s kind of like it used to be, as opposed to some of the department stores you go to today and you can’t even find someone you can pay.” As to financing, Craig said his firm is “very blessed. We’ve had a good credit history for almost a quarter of a century and we have very, very strong banking relationships. We actually have banks competing the make the loan right now.” Craig Realty, the managing general partner in the venture, owns, operates and manages nearly 4.3 square feet of retail developments in six states.

International Paper to consolidate, expand Salt Lake operations By Barbara Rattle The Enterprise International Paper plans to consolidate, expand and modernize its xpedx, Western Paper Co. and Zellerbach operations in Salt Lake City under the xpedx brand. Sales and customer service employees from Western Paper and Zellerbach will move to the current xpedx facility at 1987 S. 3700 W. on April 4. Warehouse and delivery personnel will remain in all three company locations until August, when construction will be complete on a 277,000 square foot xpedx distribution facility at 1635 S. 5070 W. “I think we’ll have about the same amount of total square footage, but the difference is the three buildings we’re currently occupying are extremely old, so the cube in the buildings is significantly less than what the cube in the new building will be,” said Paul Dickamore, general manager, xpedx Salt Lake City. “For example, at the Zellerbach building, in the front half we have 17-foot high ceilings. In the new building they’re all 32 feet high. Our ability to stock and warehouse product is growing significantly. And for the most part the buildings that we’re in now were built at the time when the flow was different. The new facility will have 40 dock doors. I would guess that out of the three facilities we’re in now, the most dock doors we’ve got are 10, and they’re all located in the

Artist's rendering of the new 277,000 square foot xpedx facility, now under construction at 1635 S. 5070 W. same part of the building. In the new one we’ll be able to receive in the back and ship out of the front. So it’s going to be a lot more efficient. Also we have some stateof-the-art software, so everything will be received and bar coded

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beyond Asia, Swire purchased the franchise rights for the CocaCola bottler in Salt Lake City. It continued to purchase other surrounding franchised bottlers and distributors. Today, Swire’s U.S.-based bottler, Swire CocaCola USA, operations production and distribution centers in 11 western states, employs more than 1,700 people and is the fifth largest Coca-Cola bottler in the United States. Its products include not only soft drinks, but also waters, sports drinks, juices, energy drinks, enhanced waters and teas.

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July 25-31, 2011

PAPER

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6 aging and facility supplies and equipment. Zellerbach began operating in Salt Lake City in 1916 and is currently located at 2255 S. 300 E. In 1911, Dixon Paper Co. began operations in Salt Lake City. It was acquired by xpedx in 1990 and today, xpedx is one of the largest business-to-business distributors in North America. Customers include printers, manufacturers, retailers and other commercial facilities. International Paper made the decision to consolidate the locations after an analysis of the commercial printing, packaging and janitorial industries. “Most consolidations or mergers are generally because of poor financial performance,” Dickamore said. “That is not the case with this. We have had minimal impact as far as having to lay off people. We’ve retained by far the mass majority of the workforce; we’ve had a few duplicate clerical kind of positions, but just in general it’s been extremely minimal in terms of employee reductions.”

Forty-acre shopping center, anchored by Target, planned in West Valley

By Barbara Rattle The Enterprise West Valley City planners have given a green light for the construction of a 135,300 square foot Target store at 2819 S. 5600 W. The store, which would be built on 9.9 acres, would anchor a 40-acre shopping center dubbed Highbury Centre that is being developed by Suburban Land Reserve Inc., (SLR) a real estate subsidiary of The Church of Jesus Christ of Latter-day Saints. Thomas M. King, senior vice president of business development for SLR, said plans callDATE: for Target to buy its acreage, and SLR is aiming to sell the remainder of the project to a master developer. While the Target portion of the project is fully entitled, the remainder of the commercial subdivision must still receive approval from the West Valley City Council, which is slated to take up the matter late this month. 6” x 8” Black and White Ad - Proof 3 King noted that while SLR’s

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Artist's rendering of the Target store planned in West Valley. It would mirror the relatively new store on 300 West in Salt Lake City. deal with Target has not yet been finalized, a closing is close. “We’re encouraged by the participation and are excited about working to finalize an agreement with Target. We’re at very short strokes on that contract,” he said. “What we’re trying to do is be land sellers. We felt that the opportunity to bring Target to the center, however, was just too good to pass on. “Target is the best anchor you could ask for in a retail center. Our expertise and our business model, though, are to be land sellers. We’ve sold some land to Granite School District for an elementary school and for a junior high. That’s more our interest. We’ve been talking to master developers and continue to have ongoing conversations with them. We’re trying to find a buyer for the balance of the center. The site is not listed at this time. We’re

trying to not take steps that would step on the toes of the master developer so that the Boyers of the world or the Miller Weingartens or the Johansen Thackerays could come in as a master developer and then let them engage their preferred broker.” As proposed, the Target store would be flanked by several retail parcels. One measures 36,000 square feet, another 40,000 square feet, a third 35,000 square feet and the fourth 43,000 square feet. The non-Target lots range in size from 1.1 to 11.5 acres. “We’ve been most encouraged by is the economic development posture of West Valley City,” King said. “They’ve been very supportive both with their mouth and with their feet. They’ve worked hard to help this deal go forward.”

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The interior of the Planet Fitness facility in Ogden, which opened for business last December. By Barbara Rattle The Enterprise A best-selling author and his wife have signed an area development agreement to bring five new Planet Fitness facilities to the west side of the Salt Lake Valley. Economist, entrepreneur,

author an adjunct professor Paul Zane Pilzer said his wife, food and fitness aficionado Lisa Dang Pilzer, will own and operate the five new facilities, the first of which is slated to open in about 18,000 square feet at 1836 W. see FITNESS next page

5400 S., Taylorsville, in early July. The four other gyms, which will range in size from 20,000 to 25,000 square feet, will all be open within the next four years and all will be located west of I-15. “The demographic in Taylorsville is double what we needed,” Pilzer said — “165,000 people within three miles. We need a demographic of 80,000 to 100,000 people within three miles, 200,000 within five. Pilzer, who lives with his wife in Park City, said he became a spokesman for Planet Fitness last year. He is the author of Other People’s Money, God Wants You to be Rich: Theology of Economics, The Next Millionaires and The New Health Insurance Solution. But it was his book The New Wellness Revolution that brought him to Planet Fitness. “I profess no real knowledge about health or wellness” said Pilzer, who has been on the cover of roughly 100 magazines and on the front page of The Wall Street Journal several times. “But I do have knowledge about the economics of health and wellness. I can’t tell you what vitamin to take or what exercise to do, but I am probably the best-known economist in wellness and preventative medicine.” Pilzer said he regularly speaks before the International Health, Racquet & Sportsclub Association, whose members consist of 24,000

The Enterprise

July 25-31, 2011 owners of health clubs around the world, and is surprised that he is welcomed by the organization. “I really don’t like the fitness industry,” he said. “It’s terrible; they cater to fit, healthy people and make anyone who needs to improve their life feel bad. They have such a bad product that someone comes in, they sign them for a one to three-year contract and then have departments to sue them if they default. The No. 1 cause of credit card defaults is health club memberships.” When Dover, N.H.-based Planet Fitness called Pilzer to hire him to speak, “I thought they were crazy,” he said, “that I would scare away all their members. But I got religion. Wow.” Pilzer said he was taken by the Planet Fitness business model: a $29 annual fee, $10 a month, no commitment, “please quit if you’re not coming in, if you don’t like it.’ “Planet Fitness started, effectively, in 2003 when a guy in New Hampshire decided to start franchising it. Today it’s the largest in the U.S. with 404 clubs open, 750 under development, including the one in Taylorsville, and 2.5 million zealous, happy members,” Pilzer said. “They’re 65 percent female, they’re 90 percent ‘I hate other clubs’ and they all have a story — ‘they made me feel cheap, they made me look bad.’ It’s about belonging, not judging you, help-

ing you. Planet Fitness is a brand. Your loyalty is to a brand. The Planet Fitness brand is the ‘you belong’ brand. Feel good about yourself, don’t ever let someone else’s opinion of you affect what you do. For me to get involved it has to be something that is affecting my nation. Planet Fitness is that. I can’t find a person who has ever walked out of a Planet Fitness unhappy.” He said 40 percent of Planet Fitness members choose to upgrade to a $20-per-month “black card” membership, which allows them to bring in unlimited free guests (one per visit), and enjoy unlimited free tanning, reciprocity at other Planet Fitness centers in the area, and half price waters and other drinks. Long-term, Pilzer said he would like to take the Planet Fitness concept to China, where, last December, he was invited to address the nation at the Great Hall of the People after his book On Health and Wellness became a No. 1 Chinese best-seller. “The preventative economics of medicine caught the eye of the Chinese premier, which makes sense,” he said. “They’re focused on health care, establishing social programs, and here I’m writing about how much you save if you get to people before they get sick. And China has a runaway obesity problem among its affluent people. About 300 million.”

It’s likely that Utah would be the base of operations for expansion into China, Pilzer said, due to the state’s number of bilingual young people. Pilzer, 57, completed Lehigh University in three years and received his MBA from Wharton in 15 months at age 22. He became Citibank’s youngest officer at age 22 and its youngest vice president at age 25. At age 24, he was appointed adjunct professor at New York University, where he taught for 21 consecutive years. During the past 30 years, Pilzer has started and/or taken public five companies in the areas of software, education and health care. He founded Zane Benefits Inc., Extend Health Inc., Zane Publishing and The American Academy. Regulated hunting preserves animal populations and habitats.

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