CLUB DEAD

[October 19th, 2005] Last Friday evening, members of the Princeton Athletic Club arrived with their gym bags just in time to see moving trucks hauling away dozens of StairMasters and elliptical trainers.

Inside the gym at Southwest 11th Avenue and Washington Street, an employee handed out a letter directing club-goers to Mavericks Fitness Club in Northwest Portland. But he refused to say whether refunds of the memberships would be offered if the club's 500 members didn't want to switch.

The movers said they had been hired by the Princeton's flashy promoter, Josh Fallis, who just months before had hawked memberships with promises of a deluxe renovation in the 20-year-old club's new site.

News of the closure shocked some members, most of whom are downtown office workers. Yet law-enforcement officials and business owners in Oregon, Washington and California said the situation strikes a familiar note.

Fallis is currently being investigated in California for selling used fitness equipment online in the early 2000s. Buyers complained he often failed to deliver, which attracted the attention of the major-fraud unit in the Orange County, Calif., district attorney's office.

In 1993, Fallis spent about six months in prison for felony theft following a lengthy inquiry by the Bend police for his involvement in another gym expansion.

He filed for bankruptcy in Washington state in 2003 and has more than $100,000 in tax liens and civil judgments recorded in courts up and down the West Coast. According to former Princeton employees, Fallis, 47, paid himself more than $140,000 over the past year and a half while the club deteriorated. The gym, which Fallis did not own, also has been sued in recent months for eviction and failure to pay its bills.

The story starts in mid-2001 when a fitness-equipment salesman named Jeff Turner bought the club from its original owners, then hired Fallis in late 2003 to help him sell memberships. Turner had big plans for expanding the gym—which had operated in the basement of the Governor Hotel since 1985—in a grand new space in the Telegram Building.

Fallis looks more the paunchy biker than an athletic-club jock—he's 6 feet tall and weighs 260, wears a leather jacket and has blond hair plugs. But he came with shining recommendations from the owners of another small club in Woodinville, Wash., where he was helping with another expansion.

In Portland, Fallis soon traded his sales job for a management position. Former Princeton employees say he recruited investor Terri Linde and James Morris, who began funding day-to-day operations. Their cash quickly eclipsed the $150,000 Turner had invested and another $80,000 contributed by three Princeton employees. In May 2004, business records show, Morris assumed controlling interest in the club. According to former employees and a lawsuit filed by Turner, Morris cut Turner out of the business entirely.

The owners of the Woodinville Athletic Club describe a similar experience in recent months with Linde, Morris and Fallis: Club founder Jayne Wozow says the investors wrested ownership from her and have pushed the business to the edge of collapse.

At the Princeton Club in Portland, Fallis—often representing himself as the owner—began making big promises to employees and prospective members: a marble entryway, fancy bathrooms, a climbing wall. On visits, he gave pep talks to the floor staff. One female employee says Fallis wore a giant gold cross around his neck and said, "You work hard, you get a lot of bling."

But the business quickly showed signs of instability.

"From day one, it was like pulling teeth to get paid," says Dan Damron of Northwest Janitorial.

Even during peak hours, the club seemed conspicuously empty. Although Fallis had leased top-of-the line equipment, the remodeling work left behind dingy lockers and unfinished nooks and crannies. The club's arrangement to use the swimming pool at the Governor Hotel suddenly fell through. Classes were infrequent.

One member, West Armstrong, confronted Fallis about the slow expansion. The conversation heated up quickly, he says, and Fallis punched him in the face. Armstrong complained to staff and was amazed Fallis kept his job.

In September, the owners of the Telegram Building sued for eviction in Multnomah County Court, and Northwest Janitorial sued for nearly $5,000 in unpaid bills. Fallis never showed up for the hearings.

Neither Fallis nor his partner James Morris returned calls for comment. Several club employees say their recent paychecks bounced and that a handful stand to lose thousands of dollars more in investment.

Max Muller contributed reporting for this article.