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State sues SportsQuest over marketing

Aaron Kremer February 9, 2012 12

 

The state of Virginia is suing SportsQuest, a Chesterfield recreation complex, requesting that it refund at least 700 memberships it sold and allegedly improperly marketed for a yet to be built spa/fitness facility.

In the suit filed Monday, state Attorney General Ken Cuccinelli claims that SportsQuest ran afoul of regulations that govern the sale of health spa memberships. The suit says SportsQuest, which has struggled recently to pay its bills, allegedly violated the rules by not mentioning an opening date for a planned fitness facility on Genito Road in its initial marketing materials and then by failing to open by the date quoted in updated marketing materials.

“Virginia Code prohibits a health spa from selling a health spa contract on a prepayment basis without disclosing in the contract the date on which the health club should open,” the suit says. “The opening date shall not be later than twelve months from the signing of the contract.”

The regulations are governed by the Virginia Department of Agriculture and Consumer Services and the Office of Consumer Affairs, which started investigating SportsQuest in December 2010, according to the lawsuit.

The suit alleges that SportsQuest customers pre-paid $800 to $2,600 each for 36-month contracts to the club that included memberships to the proposed Genito Road gym. Month-to-month contracts could be bought for up to $250, according to the suit.
As of Wednesday, SportsQuest was still promoting and selling memberships with plans that charge a $75 enrollment fee and a monthly fee of about $30. A sales representative told Richmond BizSense on the phone that the membership allows a patron to use a temporary facility on Oak Lake Boulevard that has been in use for about a year and that SportsQuest won’t move to the planned Genito facility for at least a year and a half.

It’s unclear exactly what SportsQuest used the membership funds for, but the project has been short of cash since at least last summer.

BizSense reported in August that the business was having trouble paying employees and contractors.

At the end of January, an excavation company filed a lien for $500,000 for work it did in 2010 and for which it wasn’t paid. That was the third lien filed by contractors who helped build the site.

SportsQuest is also one of Chesterfield County’s largest tax delinquents, owing $75,000. SportsQuest relied on more than $4 million from the county to get the project moving.

In the attorney general’s lawsuit, the state claims it previously sent a warning to SportsQuest but that “SportsQuest has failed to demonstrate that no violations occurred.”

The lawsuit claims that SportsQuest eventually agreed to comply with the regulations “but as of the time of this filing has failed to live up to the prepayment contract refund and reporting obligations of the agreement.”

The VOCA said it does not comment on pending investigations.

BizSense was unable to reach SportsQuest founder Steve Burton.

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12 Comments »

  1. Tom Depcrynski February 9, 2012 at 10:50 am - Reply

    In my 13 years of running a Pro franchise in Richmond and knowing of this concept for over 10 years from one of the major investor, In my opinion there was never the money too complete a grandiose plan like this. I am afraid the county may have been sold a bill of goods. Maybe the intentions were noble. But I have heard (anecdote able) that pressure was put on existing organizations to fall in line with Sports Quest, just look at all the broken promises and now the A.G. has gotten involved. My suggestion is the county take over before other promises were made are broken and the area loses credibility which in my opinion could be an excellent place to bring National Sporting events to the Richmond area, this project can work very well with other sports organizations and a shinning star!!

  2. Theodore Nugent February 9, 2012 at 12:38 pm - Reply

    I don’t think BizSense will be able to reach Steve Burton anytime soon. I think the dream doc knows he can’t slither his way out of this one.

  3. tom arnot February 9, 2012 at 1:07 pm - Reply

    Aaron has been doing a great job following the Sportsquest saga. He might want to look into the rumor of Virginia Speedskating (a non-profit organization) funds being funneled into Sportsquest and being converted into “investment” by you-know-who

  4. Mug Hedley February 9, 2012 at 1:11 pm - Reply

    I am so amazed that people really thought he could pull this off. Shame on Chesterfield County for not researching before putting $4mil in this “white elephant”.

    Good luck to the 700 people getting your money back.

    What really is a shame is the strong arm tactics applied to local LAX, field hockey, and any other sport to “come on board” or “be left out”.

    Listen closely and you can hear the tumbleweeds rolling across Genito Road

  5. Zach Davis February 9, 2012 at 2:13 pm - Reply

    Along with the obvious economic headwinds, I think a lack of focus submarined this project. SportsQuest is an olympic training facility, a fitness center, a youth sports academy, a soccer field complex….etc. etc.

    This is still valuable property, and even with the economy hurting youth sports are huge. I really think if whoever ends up controlling SportsQuest just narrowed the focus to hosting local, regional, and national youth sports competitions it could eventually turn a profit.

  6. Scott Powell February 9, 2012 at 4:44 pm - Reply

    I’m curious… Does RBS know what would actually trigger the seizure of the property by Chesterfield county? Is Chesterfield close to that trigger? Whether SportsQuest is a raging success or collosal failure makes little difference to me. However what I do care about is the huge amount of my tax dollars that were diverted to this private business. I was OK with that ONLY because Chesterfield was smart enough to be the first lien holder on the real estate assets. However with the state getting inolved now, I’m concerned that the allocation of assets in a possible bankruptcy might get thrown in the blender. If Chesterfiled winds up not even getting the land, heads should roll! Aaron, maybe you could educate us about how this might play out? Thanks for your great work on this story!

  7. Tom Depcrynski February 10, 2012 at 8:11 am - Reply

    In the most recent plan to sell off parts and pieces could ruin the whole site. The county needs to jump in now to save what I have said could be a real jewel for the county and surrounding governments. The county should run this on a fair and balanced way that all sports organizations would benefit. In my opinion Chesterfield County should hire an experienced person with many connections and the ability to bring others there for all of the metro area to enjoy and it would become an economic boom and the ability to bring sports from all over the country to our state not only for sports but tourism with much economic impact. We should act expediently now that the county is going through there comprehensive plan which is going back for a “massive rewrite”

    Tom Depcrynski
    Midlothian, Va

  8. John Thorburn February 11, 2012 at 4:46 pm - Reply

    Chesterfield County should jump in now with a complete comprehensive plan. Finish the Powhite parkway to I95. Court Disney to bring Disney America, the theme park based on the evolution of America to the County. Tie that into the history of Richmond, Petersburg, Williamsburg and James Town. Then have them finish up the SportsQuest Development as Disney Sports! Now that would be a plan.

  9. Liz February 11, 2012 at 8:06 pm - Reply

    So being one of the families that bought a membership, what do I do to be involved in the lawsuit? i still am holding on to hope that it will be built, but i don’t want it to go bankrupt and loose all my money ($2300)

  10. Jon G February 12, 2012 at 6:01 pm - Reply
  11. Michael Dodson February 13, 2012 at 9:10 am - Reply

    Sports Quest has until this winter to build basketball courts and a senior center for the use by Chesterfield residents. If they do not complete these tasks the County can get some of its funds back but I am sure before that deadline approaches this will all be in a bankruptcy case.

  12. lori March 29, 2012 at 1:34 pm - Reply

    yes I would like to know what needs to be done to be included in the suit. We paid $2600 for a membership and for us that is a lot of money. Which we could really use to pay medical bills and car repairs right now

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