International Spa Inc. of Oklahoma City reached an agreement Tuesday
with the Oklahoma Tax Commission for a payout of delinquent sales
taxes and penalties totaling $115,099, according to Robert Struble,
attorney with the commission.
International, also known as United Spas Inc. and operating as
International Fitness Center, agreed to pay $20,000 a month to the
tax commission starting March 1. The taxes owed are for the period
between Feb. 1, 1986, and Sept. 30, 1986.
International posted a $70,000 bond to cover the actual taxes
due, Struble said. The remainder is interest and penalty against
The tax commission filed a lawsuit in Oklahoma District Court in
December which sought to shut down the centers until the tax claim
was paid. The motion for injunctive relied was denied and
International Fitness attorneys indicated at that time the taxes
would be paid.
Although the state tax claim is being worked out, International
still faces violations in Missouri for continuing to sell
memberships while a Kansas City club was being foreclosed. In
addition, at least 30 lawsuits have been filed in Oklahoma County
District Court against the fitness centers. The lawsuits involve
non-payment on accounts from $80 to over $6,000, non-payment of
leases, and also personal injury cases.
International reportedly owns fitness centers in the Kansas City
area, Tulsa, Oklahoma City and Albuquerque, N.M. Each center is held
under a separate corporation with its own name, such as
International Fitness Center of Quail Creek Inc. in Oklahoma City.
Missouri's attorney general filed a petition last Friday alleging
International Fitness Centers of Kansas City violated Missouri's
Merchandising Practices Act, encompassing truth in advertising, by
concealing its financial problems from the consumers who purchased
Although the company knew the center was facing the threat of
foreclosure, it continued to sell memberships until the doors were
closed, said John Baker, spokesman for the Missouri attorney
general's office. Baker said the center made no provisions for the
sale of memberships to a new buyer. The center is one of six
located in Kansas City, Mo., and Kansas City, Kan.
Anchor Savings Association of Kansas City, Kan., began
foreclosure proceedings against the center in January. This month,
Boatman's First National Bank of Kansas City, Mo., bought the first,
second and third mortgage on the property for $1.7 million. There
are no current liens on the building.
Boatman's then leased the facility to Health & Tennis Corp. of
America, a subsidiary of Chicago-based Bally Manufacturing Corp.
International Fitness Center of Kansas City leases its buildings
and property, according to a spokesman for Boatman's First National
Bank. The owner of the foreclosed property was Hilltop Associates
Ltd. The general partners of Hilltop are William McDonald, president
of International, and Edward Shelby, an officer of the company.
Baker said financial problems of the International Fitness
Center of Kansas City were brought to the attention of the Missouri
attorney general about one month ago with word of the foreclosure
"Yet, as far as we knew they were still selling memberships," he
Baker said Health & Tennis Corp. will "probably honor those
memberships to a point."
On the day the facility was foreclosed upon, individuals who had
purchased memberships over the previous 30 days were requested to
notify the attorney general's office, Baker said.
The petition filed by the attorney general demanded injunctive
relief, restitution and civil penalties against International
Fitness Centers of Kansas City and McDonald.
The court has been asked to prohibit all Missouri International
Fitness Centers from selling memberships without first telling
consumers of their "financial straits," Baker said. …