Rest In Peace River Oaks?

In today's Plain Dealer, Business Section, there's an article about River Oaks and it's financial troubles which it blames on the opening of municipal fitness centers in Rocky River and Westlake. Each member of the club received a letter asking them to contribute $300.00 to keep the club open at least until next September. If they don't get enough members to contribute the club will close on February 2nd.

The letter raises as many questions as it answers. It seems strange that the checks are to be made out to Michell. The club has stopped taking charges at the front desk. Why don't they want to put any money into the River Oaks account? After over 20 years of business and the amount of cash flow that has transpired one would assume that there would be a good relationship with a bank or two. Many other questions could be asked about this situation but remember that this is a privately owned club and all of their financial information is private and need not be shared. However, having been in business myself for over thirty years I would make the following analogy. It's like I got a unexpected large credit card bill from my wife's Christmas spending and I went back to my customers and asked them if they would mind paying more for the work I did after they paid their bills because I needed more money for my personal bills. Folks, this is not how you run a business.

In the opinion of this observer, the only viable solution is for new ownership with the ability to negotiate a new long term land lease and the willingness to spend major money on renovations. This blighted building is probably worth less that $10.00 per square foot now considering the liability of the necessary repairs to roofs and insulation. At 150,000 square feet that would be a value of less that 1.5 million, and maybe that's high. The value of the land is blighted too if the club should close. Redevelopment would require it's demolition....although they may make out because the price of scrap steel is up.

All in all it's a sad time for the River Oaks community. Yes we are like a family and there and many friendships and romances have blossomed here. We need a knight in shining armor to rescue us. The band-aid approach that has been proposed seems doomed to failure. Yes, I will contribute my share as part of the family but lets get real. If you (the club) wants our help, lets have some openness and some sort of membership meeting to present the real facts. Stop hiding behind Michell. There are some of you owners who have had many years of profit sharing. Will the real owners or River Oaks please stand up?

More to come......Please leave your comments....