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It wasn’t so long ago that the not-so-affectionately-dubbed “yoga tax” divided the District. When the D.C. Council proposed expanding the city’s 5.75 percent sales tax to services like health clubs and tanning studios, fitness studious weren’t happy about it. They protested the tax, saying it would dissuade people from staying fit and hurt their bottom lines. Some fitness advocates even found themselves doing burpees in front of the Wilson Building, looking for some mercy from the Council. But no such luck: In June, the Council approved the tax in a 9-4 vote.
The tax doesn’t go into effect until January, so presumably no one’s dropping their gym memberships quite yet—-and maybe they won’t. But while fitness enthusiasts were protesting with yoga mats earlier this year, the specter of the yoga tax actually did inspire one local gym chain to scale back its expansion.
David Von Storch, the founder of VIDA Fitness, the upscale gym/salon/spa chain, says VIDA was in negotiations to sign a lease on the 600 block of H Street NE—-in the same complex as the forthcoming Whole Foods—-but ultimately decided to pull out because of the yoga tax. “It was the straw that broke the camel’s back,” Von Storch says of the deal. “I thought it would be imprudent for me to increase my expansion without knowing the effects of this tax.”
Michael Blum, the president of Insight Property Group, which owns the property, confirms that Insight was in talks with VIDA. He says there are still 36,000 square feet of space Insight is looking to lease in the complex.
VIDA currently has five locations, all of them in D.C., and is set to open its sixth in Navy Yard at the end of the month. The gym membership is pricey, costing $89 after a $59 enrollment fee. Von Storch says he’s not worried about keeping the diehards on his roster, just the people who don’t hit the gym as often and may already be hesitant about paying for a membership. But running a gym is a fixed cost, and a place as expensive as VIDA needs to offer all its high-end amenities, no matter how many members it has, Von Storch says.
“There’s no question that we’re going to have a problem with retention in the next year,” says Von Storch.
The city’s expanded sales tax is expected to bring an additional $5 million to city coffers each year.