Super Spas Used to Lure Office Tenants : Real estate: Some developers believe that posh health clubs, such as two Orange County projects, give office parks an upscale edge. But others wonder how big a lure they really are.

IRVINE —  When local developers want to put a little more pizazz into their office parks, they often try to get a hotel to locate nearby.

It’s also fashionable these days to have a restaurant or two around, preferably one with a chic name that sounds vaguely Italian or Southwestern.

In some buildings, you can even get your car washed and detailed or have a concierge take your suit to the cleaners.

But now--you’ll pardon the expression--there is a new wrinkle: health clubs. Not the sort of unassuming little places usually found at the end of a strip shopping center. No, we’re talking big here, fancy. We’re talking kayak runs. Cocktail lounges and restaurants. Meditation rooms. Sushi bars. In short, everything a 1990s kind of person needs to stay fit fashionably.

It’s good for the developer because he gets to tell prospective tenants that their employees will be happier in his building; when they get stressed-out from making those big deals or from briefing that big case, they can race over to the health club for a workout.

It seems such a good idea, in fact, that two developers have planned Gargantuan health clubs just across the freeway from each other among the glass office towers near John Wayne Airport.

There’s just this one small problem: Both clubs are so big that they’ll likely need several thousand members to make a profit. And with two clubs competing for a limited number of health-conscious yuppies--the kind who can afford a $675 initiation fee and $75 a month--finding the proper number of members isn’t going to be easy.

To complicate matters further, one of the clubs has a long head start: Sports Club/Irvine will open early next year, say its owners. The second club--the Sporting Club--hasn’t yet obtained a building permit, though one is near to being issued. The Sporting Club says it won’t open until late next year.

And, its competitor contends, that schedule is nothing more than an optimistic guess. “It takes a year and a half to build one of these things because it’s such an unusual type of building,” says Michael Talla, co-owner of Sports Club/Irvine.

“But that’s OK. They were advertising back in 1987 that they were going to open in June, 1989. We’ll pay attention to them when they finally open.”

If that sounds a little, well, snippy, it is. The two organizations have been taking potshots at each other for two years. But even partisans of The Sporting Club concede that its late start is going to hurt.

“Everybody’s nervous about what the first few years are going to be like,” says Bill Kearns of Birtcher, the big Laguna Niguel developer that is leasing the land to the Sporting Club. Birtcher is building two office towers called Lakeshore Towers next door. “The marketing war is going to get ugly,” Kearns predicts.

Birtcher’s first office tower is also nearing approval for a building permit from the city of Irvine, but the developer has problems, too: It has no major tenant yet for the 18-story building. One prospect--the law firm of Gibson, Dunn & Crutcher, which was looking for 100,000 square feet of office space--chose a rival Irvine Co. building recently. Birtcher says it has a construction loan and is going to build the first office tower anyway.

(Speaking of amenities, though, Birtcher will also have a day-care center.)

Across the San Diego Freeway, at Koll Center Irvine North, the contractors are putting the finishing touches on Sports Club/Irvine. The Koll development is a cluster of office towers built by the Koll Co. of Newport Beach.

It’s known that several hotel chains would have liked to put a hotel on the Birtcher property, and rumor has it that a hotel was once slated for the Koll property where the Sports Club is going up. But the developers apparently wanted the snazzy health clubs instead.

“One of our biggest marketing factors is the amenities our office projects offer,” a Koll spokesman says. Another big thing is traffic: It helps developers get permission to build if they can tell city planners that all their restaurants, theaters, health clubs and the like will persuade the workers in their office buildings to tarry a little longer and keep them off the streets during rush hours.

The health club on the Koll property will have a lot of stuff to keep office workers diverted. At 100,000 square feet--about the floor space of 40 new houses--the big club will have vaulted ceilings, skylights, marble, the usual treadmills, exercise bicycles, two full-size basketball courts, a pool, a sports medicine clinic, a spa, a salon, private trainers, valet parking, a shoe-shine service and even a press conference room “for business people.”

The other club--also 100,000 square feet--has most of that stuff, plus a kayak run.

Sports Club/Irvine is run by the same people who run Sports Club/LA, a celeb hangout described by People Magazine as “the fanciest gym in America.” The Sports Club Co. operates seven other clubs. It’s owned by Talla and Marvin Davis, the oil man and entertainment mogul.

The Sporting Club, on the other hand, is a joint venture of San Diego developer Naiman Co. and two Japanese companies. A Naiman subsidiary has developed a string of posh health clubs across the country with Japanese companies as minority investors. (Since building the giant clubs is risky, the Japanese are among the few lenders willing to take a flyer on loaning the developers money. But in return, they want a piece of the action, Naiman says.) The two companies in on the Irvine club are Nissho Iwai Corp. and Hiroshima Yakult Co.

Both clubs began a heavy advertising blitz two years ago, long before anyone had so much as turned over a spadeful of dirt. And they’ve been signing up prospective members for months. It may be hard, however, for the Sporting Club to hold on to the 1,500 members it claims to have signed once the other club opens. (The Sports Club won’t disclose its membership.)

Why is the Sporting Club so late? You get a couple of different answers, but basically it seems to have taken longer than anticipated to shepherd the Lakeshore Towers project safely through the Irvine bureaucracy. At one time, the slow start prompted speculation that the second club wouldn’t be built, and in fact both clubs talked about merging earlier this year. The talks, however, stalled, and the war of the advertising brochures and the potshots in the press resumed.

Both clubs are risky propositions. That’s because if a club fails, it’s hard to turn a building that big and that specialized into something else. And if Naiman wants out of running its club at some point in the future, Birtcher--as the landlord--gets the building at no cost.

Despite the risks, you’re likely to see more such mega-clubs popping up in Southern California’s urban areas. Not only are they chic, but with vacancy rates for office space more than 20% in some areas, the competition for tenants has become intense. Any edge they can get over other landlords--including a health club--is likely to appeal to office developers.

Naiman, for instance, has been building smaller health clubs next to its office buildings since 1974. Now, however, the clubs are getting bigger and other developers are taking notice.

“We’re in the brochure for every office building within blocks of here,” says Darren Hodgdon, a Naiman executive who was discussing the company’s new Illinois Center health club on Chicago’s lakefront.

“We’ve been paid incentives by developers to build a club on their property because that’s allowed them to secure long-term leases from tenants,” he added.

Officials of both health clubs say they are already talking to other Southern California developers about building clubs near other office projects.

And therein lies another problem. Developers have already built far too many office buildings in Southern California, sending vacancy rates through the roof. They’ve also built way too many hotels in most places, and those vacancy rates are high, too.

And what may be the first case of overbuilding these big new health clubs, just as the little strip-mall health clubs have saturated the market, may have arisen in Irvine. In short, what started out as a solution to the problems of an overbuilt office market may eventually turn into a problem of its own.

And some industry observers aren’t even sure that tenants really care whether their building is near one of these big new health clubs.

“We’ve done a lot of tenant surveys for developers who were toying with the idea of putting in tennis courts or jogging trails around their offices,” says Bob Dunham, president of the consulting firm of Newport Economics Group. “But what tenants really want are reasonable rents and good property management. The other stuff ranks way down the list.

“I’ve never understood the appeal of those things anyway,” Dunham says. “I pay $8 a month to go to Nautilus.”