Gym Dumped For Big Lots

1,000-member Payson Athletic Club booted for new tenant as clients press for refunds

A client at Payson Athletic Club uses an exercise bike just a week ahead of the gym’s closure after losing its lease. Pictured on the front page is Larry Stephenson, another member of the gym.

Photo by Andy Towle. |

A client at Payson Athletic Club uses an exercise bike just a week ahead of the gym’s closure after losing its lease. Pictured on the front page is Larry Stephenson, another member of the gym.


Another Rim Country business is closing its doors, but this time its for lack of a lease, not for lack of customers.

At the end of March, Payson Athletic Club will close up shop forcing its 1,000 members to look elsewhere for a place to work out, its owners announced earlier this week.

Gym owner Gina Vaughan said the athletic club is being forced out to make room for a 30,000-square-foot Big Lots in the Rim Country Mall Shopping Center.

Big Lots will take over the former Sears store and the space leased by the gym to operate one of the largest retailers in Payson, which remains heavily dependent on sales tax to provide most town services.

“It is really devastating,” Vaughan said of closing the gym. “There is this heart aching feeling that I can’t do anything about.”

Vaughan said she was blindsided when an employee with Larsen Baker, a Tucson-based commercial real estate firm, called her in mid February and told her she had six weeks to relocate. She said she couldn’t afford to relocate due to the costs of remodeling, given the gym’s drooping profits of recent years.

George Larsen, co-owner of the real estate firm, said the company tried to relocate Payson Athletic Club and even offered to help cover some of the remodeling costs, but couldn’t work out a deal with the gym.

Larsen said the gym was not kicked out, the lease simply expired and the two sides could not come to terms on rent or a new location.

The athletic club has been a fixture in the community for roughly 18 years. Originally opened on the south side of Highway 260, the gym was one of the first tenants to move into the Rim Country Mall after it was remodeled when the Walmart left for a bigger location on North Highway 87.

Through the years, the gym changed hands several times. Jerry Baker took it over several years ago. Six months ago, Vaughan bought the gym when Baker decided he could no longer manage the business.

Vaughan, a gym member of eight years, said when she first learned that Baker planned to close the gym, it took her only five days to decide to buy it.

Vaughan said she knew the business was struggling, but was looking forward to making improvements and keeping it going to provide a vital service for the community.

The gym offers traditional gym equipment and classes as well as rehabilitation programs through the Mogollon Health Alliance and the Silver Sneakers program for senior citizens.


Larry Stephenson works out.

“The closing is going to affect a whole lot of people,” she said. “It is really a sad thing. I don’t think they realize the impact of what they are doing.”

Larsen said he wishes there was a way to keep the gym open.

In an e-mail to Vaughan Wednesday, Larsen wrote that the gym is closing because he believes Vaughan and/or Baker refused or were financially unable to negotiate a reasonable lease rate and refused to accept Larsen Baker’s offer to help relocate within the shopping center.

“We valued having Payson Athletic Club as a tenant,” Larsen e-mailed Vaughan. “We did not make much money on the rent, but your business was always welcome and we would have liked to have retained it.”

Vaughan says she knew the athletic club’s lease was up March 31 and was willing to pay more, but never expected Larsen Baker would tell her to move.

Larsen said they needed the gym’s location to meet Big Lots 30,000-square-foot space requirement.

The discount store will be located next to Stage and stretch around the back into what is now the 10,000-square-foot gym.

Larsen Baker offered to move the gym to a space behind the former Sears location.

Vaughan said she looked at the space, but when she factored in moving the equipment, installing new facilities, including showers, the cost was too high — one contractor quoted a price tag upwards of $450,000.

“I don’t have the financial means to do it on my own,” she said.

With the decision to close made, Vaughan plans to sell off the gym equipment.

Some customers are already upset that Vaughan is not offering refunds of memberships.

According to membership contracts, however, the fee is nonrefundable, she said.

“I don’t blame them for being upset,” she said. “If I had the money I would give it to them, but I didn’t expect this to happen.”

Larsen said it did not make any sense for Larsen Baker to keep the gym in the location, especially when its lease rate was one-half that paid by other tenants in the mall.

The gym had a low rent because it signed a lease before Larsen Baker bought the shopping center in 2008, Larsen said.

Two weeks ago, Big Lots signed a 10-year lease. The store could open as early as December.

The former Sears space is still empty. Larsen Baker is in talks with two possible tenants — a hardware and furniture store.

Payson Athletic Club now joins a long list of closed businesses. Recently, the Rock Yard, China Wok Buffet, Azul Tequila and Lock N Load all closed their doors.


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