Boutique fitness chain Orangetheory is behind on more than $750,000 at its SoHo gym, according to a lawsuit filed Friday in state Supreme Court in Manhattan.
The company has 15 studios around the city, all of which closed in March when Gov. Andrew Cuomo ordered gyms to suspend services. It hasn’t paid any rent at 62 Crosby St. since then, the landlord, Corso, claims in the lawsuit.
The company signed a 10-year lease at the 4,600-square-foot space with its landlord in 2017, the complaint says, and although the Covid-19 pandemic and executive orders forced its locations to close, it was not excused from paying its rent.
Corso notified Orangetheory that it was in default of its lease in September; a month later it still had not received any money, it said. The rent is now at nearly $38,000 per month for the gym and will increase to $45,000 closer to the lease’s expiration, according to court papers.
The Crosby Street location, Orangetheory’s first to get hit with a demand for back rent, has reopened. It is unclear whether the fitness company has been keeping up with rent payments at its other locations, but they are currently operating at 33% capacity.
“The studio’s ability to operate business is still severely restricted," said Kevin Keith, the company's Chief Brand Officer, who called the landlord's claims "grossly inaccurate."
"While we and many believe these mandates inequitably target the Fitness industry, it is our intent to continue to negotiate in good faith with our landlord," he said. "The law is unclear as to what landlords may charge and what tenants must pay towards rental fees during the period that businesses like ours were required to shut down per government order.”
Although gyms were permitted to reopen in New York on Sept. 2, group fitness classes such as spin, yoga and Pilates were still banned in the city by Mayor Bill de Blasio. Boutique gyms and fitness companies banded together last month to file a lawsuit against the city to pressure de Blasio into giving them a green light.
SoulCycle locations around the city remain closed. Orangetheory is allowing its clients to do self-guided workouts at its studios rather than coached group sessions.
Luxury gym operator Equinox was sued last week for more than $1.3 million in rent arrears, Crain’s reported. Equinox had not paid any rent since March, except for one partial payment of $135,000 this month. Its landlord said it expects the gym to continue to default.
Town Sports International, the parent company of New York Sports Club, filed for bankruptcy last month, and the Greenpoint location in Brooklyn permanently closed last week. The company made headlines when state Attorney General Letitia James sued for continuing to collect membership fees and refusing to cancel memberships despite being closed for months.
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October 20, 2020 at 12:08AM
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Orangetheory behind $750K in rent at SoHo gym - Crain's New York Business
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