David Gutstadt has raised $23 million for a new business and social club in Philadelphia, one he hopes will combine aspects of swanky London-based Soho House, national fitness chain Equinox, and co-working start-up WeWork.
Initial backers for the combination club, hotel, co-working space, events site, and foundation consist of Gutstadt, investor Michael Forman, NBA and Navy veteran David Robinson, Philadelphia Eagles tight end Zach Ertz and U.S. Women’s soccer player Julie Ertz, actress Holly Robinson Peete and former NFL quarterback Rodney Peete, Eagles’ Brandon Graham, and former NBA players Baron Davis, Grant Hill, and Shane Battier.
Fitler Club is Philadelphia’s newest opening at 2400 Market St., which aims to draw a younger crowd with a relaxed dress code and perks like a game-room, babysitting, a 75-foot lap pool, 14 hotel rooms, and a screening room for first-run films. Housed in the former Marketplace Design Center building, the club will be downstairs from Aramark Corp.'s new world headquarters and sits across the street from the PECO building.
A 20-year hospitality financier, Gutstadt founded the Fitler Club after working at Goldman Sachs and Equinox. He and Forman, CEO of FS KKR Capital Corp., joined forces to raise money for the club. Admiral Capital invested $4 million, which includes money from other NBA and NFL players.
“I had a preliminary conversation with Michael [Forman] with an outline of the project. We knew each other socially, and I floated the idea of the club in its earliest iteration. He said ‘I love it, let’s do it.’ I suspect that will never happen again!” Gutstadt said with a laugh.
Admiral Capital, founded by Robinson and Daniel Bassichis, a former Goldman Sachs analyst, were looking for deals with ties to sports, real estate, and hospitality, and “what we’re doing with the Fitler Club isn’t just programming but mission-driven, being part of the community and philanthropy. That ties into their core values as an impact-led fund,” he added.
Admiral and Forman represent the anchor investors in the Fitler Club, a group that now includes about 125 investors plus 40 or so coming from the Admiral Group’s syndicate.
“It’s great because the owners of the project become your biggest marketers. So some of the 165 investors are in for $100,000 while others come with multiples of that. They’re people either from Admiral, community-minded athletes, or high-net-worth investors, as well as people from the city of Philadelphia. It was a true friends-and-family raise" between May and November 2017, Gutstadt said. Admiral Capital also recently invested in Philly real estate start-up Houwzer.
Among the club’s offerings will be a co-working space, called Offsite at Fitler, a high-end work space with desk spaces, office suites, and a conference center.
“It will combine elements of [co-working] Convene with NeueHouse” for creative entrepreneurs in New York and Hollywood, he said. Fitler will also offer catering, room service, and hospitality services for the co-working space, which opens in August and is 60 percent signed and committed. Fitler Club opens later this spring.
In terms of structure, investors in Fitler Club are limited partners in Fitler Club Holdings, and the board is comprised of Gutstadt and Forman, who are general partners.
Early investors automatically receive club membership and were waived initiation fees of $1,500 to $2,500, but still pay monthly dues of $250 to $500.
Other bold-faced names who joined include Philly’s elite such as Gutstadt’s father-in-law and real estate magnate Carl Dranoff, developer David Adelman, banker Richard Green, and Justin Tuck, the former New York Giants player and Wharton grad.
Gutstadt said he wants the membership to be more like the city -- at least 40 percent female and 15 percent diverse.
“One of my friends, a film producer, Amanda Branson Gill, who just made Love Means Zero, is someone who’s a friend and college classmate of my wife’s and mine, someone who wants it to grow and succeed. This is a real home-grown thing. not just catering to business, creatives, and athletes, or doctors but to everyone. Anyone in leadership in any industry of any background can be part of it. We’re approaching 1,500 members, and over 1,000 are on a wait-list to apply. And another 300 applications in process. It’s been pretty crazy," he said.
For the Offsite at Fitler work space, “we’ll raise another one-third of the total raise for the original investment, about $8 million,” Gutstadt said.
Fitler Club’s event space can handle 600-plus guests and is open to the public,
“Anyone can use our event space, and we’ve already hosted birthday parties and it’s a great add-on created by the building,” he said.
In addition, Fitler Club has hired 40 people and expects to hire a total of 130 in Center City.
As for its mission and philanthropy, Gutstadt said all members will contribute $250 of their initiation fee into the Fitler Club Foundation, which he estimates will ultimately raise about $250,000.
“We’ll redeploy that money into a few buckets -- for straight-up philanthropy, for empowering youth and education, and for impact initiatives. We may also sponsor a few memberships,” he explained. Two recipients of foundation grants include King Saladeen, an artist, and ImpactPHL, led by Cory Donovan.