World Gyms Closed; Landlord Alleges Unpaid Rent
by March 24, 2015 10:36 am 363 views
Three World Gym locations in Benton County have suddenly closed, a little more than a month after a Bentonville developer filed a lawsuit against the fitness franchise’s local operators for unpaid rent.
World Gyms at 2003 S.W. Regional Airport Blvd. and 2614 S.E. J St. in Bentonville, and 1607 Empire St. in Lowell, near Pleasant Grove Road, did not re-open Tuesday morning.
Local operator Rhett Garner and his wife, Tania, known as “Tinkey,” have been leasing those buildings from Bentonville developer Mike Charlton for several years. They also own locations in Springdale and Fayetteville.
The Garners informed the club’s members of the sudden closures through a letter posted overnight on social media.
“The three northern locations of World Gym have been on a lease and we are not able to work out some issues — they are beyond our control,” the Garners wrote. “We are unable to fill you in completely at this time.”
The Garners said locations in Springdale and Fayetteville are unaffected “by the circumstances that led to the closing of the northern clubs” and remain open.
According to real estate records, Garner, through his Rhett’s Properties LLC, paid Signature Bank of Arkansas $3 million in 2011 for the 2.45-acre location at 2035 N. College Ave. in Fayetteville.
The Springdale location at 866 S. 48th St. is owned by G&C Family LLC, which is managed by Gerald M. Johnston, a private investor and former executive vice president and chief financial officer at Tyson Foods Inc. until his retirement in 1996.
Charlton, owner of Charlton Development LLC, declined to add any further information when reached by telephone Tuesday.
“I probably should just say ‘no comment’ for today,” he said.
Tania Garner said she was under a gag order because of the lawsuit, and could not say how many members would be affected by the Benton County closures. She said all members are welcome to utilize the two locations in Washington County.
“We are doing a sweep and canceling their accounts and taking care of them as we speak,” she said.
According to a civil suit filed in February, Charlton claims that, as of Jan. 19, Rhett Garner and related business entities owe a combined $476,422 on monthly lease payments at the three Benton County locations.
The largest sum, according to court documents, is tied to the Lowell location, where Garner is in arrears $323,336. Garner, doing business as World Gym, has rented the nearly 50,000-SF facility since Nov. 14, 2006. When it was built, it was labeled the largest World Gym in the world.
According to terms, Garner rented the property at a monthly rate beginning at $45,000, and escalating up to $55,000 per month three years later.
Garner, doing business as Health Inc., also entered into a promissory note with Charlton on Dec. 16, 2004, wherein Charlton loaned Garner $200,000 to buy equipment for World Gym. Garner personally guaranteed the note, but as of Feb. 16, it’s in default and $54,644.97 is due on it.
Charlton’s attorney, Stephen Lee Wood of Rogers, is asking Circuit Judge John Scott to appoint a receiver to assume control of World Gym’s Benton County operations and to manage its assets.
Garner is being represented by bankruptcy attorney Jill Jacoway of Fayetteville.