Eli Dweck and Joseph Shabot opened CityView Racquet Club in April of 2008. Their luxury spa and fitness center, a $14 million facility in Long Island City just over the bridge from Manhattan, was growing in recognition and reputation. Six months later the recession hit, wiping out thousands of high-paying financial jobs on Wall Street. Many of those high-wage earners fit CityView’s membership profile.
“I think our grand opening was the same week that Lehman Brothers went out of business. It was a major disaster for us. Our world kind of fell apart,” said Dweck, a managing partner along with Shabot. The 80,000 square-foot fitness center, located on the roof of the iconic Swingline Staples Building in the city’s light industrial zone, has seven tennis courts, four squash courts, a full fitness and workout area, full-service spa, juice bar and cocktail lounge.
Before the market crashed, Dweck, a real estate attorney, had been looking to refinance a “hard money” loan and several other high-interest loans from family and friends that their company, Skillman Tennis Associates, incurred to build CityView. Adding to the urgency were the 60 jobs that were at stake.
“We were sitting with some very difficult terms at a very difficult time for us. We were utterly trying to stay alive,” Dweck said. Refinancing became a priority, but the volatile market made it impossible to find a traditional lender. CityView also financed its lease, adding to the difficulties.
A friend put the pair in touch with Allied Mortgage Group. Allied and Pursuit partnered in a $16.4 million, 20-year refinancing package to pay off Skillman’s high-interest credit card debt, bank loans and private-investor financing. The lower-interest, refinancing package also provided money for working capital, improvements and other business expenses.
Skillman Tennis qualified for the refinancing through the Small Business Jobs Act’s 504 Refinance loan program. The program allowed small businesses to lock in long-term, stable financing, with a goal of protecting jobs and hiring additional workers. Also of note: The project meets an SBA Community Development Goal because the property is in an Industrial Business Zone.
CityView retained its 60 employees, and has since hired five more. “A lot of our types of businesses went out of business at the time,” Dweck said. “This loan saved ours. I am forever grateful to the team of people who became involved in the process. They were amazing.”