Announcement to Members – Closure of Active 8 Gym

Announcement to Members – Closure of Active 8 Gym

Together with Daniel Spice and the Board of Directors, I am writing to inform the members of the gym of this important update, the closure of Active 8 Gym, after 20 years of operation, 5 years under the License to Lease with Daniel Spice.

This decision has not been made lightly. Active 8 has not been financially viable for several years, with the Board supporting the facility throughout its operation. In its first year under the License to Lease, the gym required an injection of $50,000 to remain operational, and in subsequent years the Board covered all outgoings associated with electricity, water, waste removal, maintenance, cleaning, security, and rent which has never been charged.

As part of our ongoing review of member services, it remains important that the Club focuses on reinvesting profits into amenities and initiatives that benefit a broader range of members. This may include updates to existing facilities, potential outdoor dining areas, and other improvements that more members can enjoy.

The timing of this announcement aligns with the end of Daniel’s licence-to-lease period. With his long-term plans to relocate to a farm in Mudgee, it is appropriate for the gym to conclude operations on Christmas Eve.

Over two decades, Active 8 has played an important role in our community. However, in recent years membership has significantly declined an indicator that the time has come for change. When Active 8 was established, it was only the third gym in the area. Today, there are 23 gyms locally, creating a very different environment for member demand and financial sustainability.

To support our current members, we have secured an excellent transition option with the University Gym, which is offering a reduced membership rate. If sufficient members take up the offer, the University has also agreed to continue running the Les Mills classes with our much-loved instructor.

The land on which Active 8 operates has been approved by members for future sale for the development of a hotel or serviced short-term accommodation. As outlined in this year’s Annual Report, CBRE has been engaged to re-assess all Club land holdings, determine current valuations, and provide recommendations on divestment, partnerships, or redevelopment opportunities.

Given the current interest rate environment with little movement and the possibility of further increases the most likely course will be a divestment to reduce debt and allow the Club to grow in other ways. Should CBRE’s recommendations differ significantly from the existing in-principal member approval, a General Meeting will be called, or at minimum an information night, to ensure full transparency and member input.

The Board has always valued member feedback, and we remain committed to open communication. In response to a recent question about “why the Club has not opened the void upstairs,” it is important to note that doing so would require meeting council parking requirements. This would involve creating approximately 300 additional car spaces adjacent to the Club. Prior to COVID, the estimated cost of a six-level underground and above-ground carpark was approximately $11 million. These types of projects may be reconsidered in future, particularly if asset divestment provides the necessary capital, another reason the land review is so important.

We appreciate the community Active 8 has fostered over the last 20 years and thank all members for their support and engagement. We remain committed to ensuring the Club continues to evolve in ways that meet the needs of the wider membership.

Regards,

Kimberley Talbot

CEO Richmond Club Group