Putting on the Ritz At the Y

By Anastasia Toufexis.

The gleaming red brick and glass building on Rhode Island Avenue in Washington is a temple to physical perfection, boasting steam rooms and whirlpool baths, mirrored exercise rooms and an equipment-packed Nautilus center, tanning beds and a pro shop. The most striking feature: a row of street-level windows that floods the pool area with natural light and forms a balcony from which passersby can view the lobbyists, lawyers and other upwardly mobile types who swarm the waters every morning, noon and evening. The capital's toniest private health club? Hardly. This is the National Y -- yes, that's right -- a YMCA.

The Washington center is no aberration. In cities and suburbs across the country, the Y is shedding its image of serviceable shabbiness and putting up gleaming facilities that rival the ritziest of private clubs. A $1.4 million center featuring a complete Nautilus circuit began operating a year ago in Chesapeake, Va. This fall a 110,000-sq.-ft. Y will open in the most prestigious area of downtown Los Angeles. Among its attractions: a large pool, indoor running track and six racquetball and handball courts. "It's the poshest athletic club ever built in Southern California," says Michael Talla, owner of eight Sports Connection clubs around Los Angeles.

The Y's newfound glitter has Talla and other commercial operators more than a little exercised. They accuse the YMCAs of muscling in on the upscale market; Y, they complain, now stands for yuppie. "We created the business for the upper- and middle-class people they weren't catering to," declares Talla. "Now they're building these monster clubs everywhere." What has the private operators hopping mad is the YMCA's tax-exempt status as a charitable organization. That means low overhead and allows the nonprofit Ys to offer affluent members of society lower rates than do commercial clubs. Why pay $960 ( a year for the Los Angeles Athletic Club when the new downtown Y costs only $390? Private owners argue that the upscale YMCAs are driving taxpaying clubs out of business. "This is unfair competition," charges Allen Grief of U.S. Health Inc., a Washington-based firm that manages the Holiday Spa chain.

Aggrieved operators have mounted a vigorous campaign to strip the luxurious YMCAs of their tax exemption. Industry representatives hope to testify this fall before a House Ways and Means subcommittee that is examining the competition problems faced by small businesses. Meanwhile, athletic-club owners are filing lawsuits to revoke the Y's tax-free status locally. Such a move has already proved successful in Portland, Ore., where the Metro Center Y has been assessed $1.2 million in property taxes (now on appeal). Suits are being contemplated for several other cities as well, and in Moline and Rock Island, Ill., county officials decided to put the local Ys on the tax rolls without even the prompting of a court fight.

YMCA officials bristle at owners' charges. Since its establishment in the U.S. in 1851, they contend, the Y has been dedicated to the spiritual, mental and physical health of the entire community. If fancy facilities bring in more wealthy members, well and good. Their dues help support activities for the less privileged. Notes Celeste Wroblewski, spokeswoman for YMCA of the U.S.A., the Chicago headquarters of the more than 2,000 branch organization: "Collectively, Ys are the nation's largest provider of child care; 71% of the youngsters come from families with incomes of less than $25,000."

At the National Y in Washington, the steep annual fees ($473 to $807) paid by 80% of clients finance vans that ferry in members of less posh local branches. In Virginia, the three Tidewater Ys teach all the fifth-graders of Chesapeake to swim. They also have aquatics classes for the physically impaired and aerobics classes for the mentally handicapped. The fitness programs help cover the cost of such services.

YMCA officials dismiss charges that they are crowding private gyms. Commercial operators, says John Ouellet, president of the Los Angeles YMCA, would no doubt prefer the Y to "put up a building as dilapidated as the one we tore down." When private clubs fail, he contends, the reason is often poor management, not competition from a well-equipped Y. If anyone is encroaching, say YMCA officials, it is the private operators. The Y has been touting fitness for more than a century. Declares Thomas Hargrave Jr., president of the Washington YMCA: "We started the health-and-fitness business, and we intend to keep it."

With reporting by Bill Hackman/Los Angeles and Bambang Harymurti/Washington