Cover Story Classics
Rodney Steven II - A Rapidly Budding Club Business Titan Powers Ahead!
- For this article, Log In to:
-
Download PDF
Publisher's Note: Continuing on with our Cover Story Classics series, we are aware the first few have featured those no longer with us. But, like the entire point of this series, we believe that the lessons of the past create the map of the future. This month, bringing that to you live and in color is our previous cover story and update interview with Rodney Steven II, President and Co-Owner of Genesis Health Clubs.
When we first featured Rodney, Genesis was at ten clubs, but they already had an incredible history/story. Fast forward to now, Genesis now operates 70+ clubs across Kansas, Missouri, Nebraska, Colorado, Oklahoma, Iowa, Kentucky and Florida. And, they have purchased and adapted two legendary brands into theirs: Atlantic Club and the Saw Mill Clubs.
Setting all the growth aside, Rodney is also very involved with the advocacy of the industry, which benefits everyone! To that, we say, "Hooray," and "Thank You!"
• • •
This industry is filled with great success stories. That's one of many reasons that I just love my job. I love it because I'm able to really get in close touch with our Cover Story subjects and dig in with them to provide all of you with a monthly dose of vision, motivation and new ideas. These one-on-one interviews, usually conducted by phone, provide me with a vast cache of information. This information, if properly applied by you, the reader and club owner/operator, will help your business be more successful, day in and day out.
That's the Mission of Club Insider! And, this month, we celebrate 19 years and 7 months of publication (now 30+ years) by sharing the amazing success story of Rodney Steven II, the 40-year old President and Co-owner of ten Genesis Health Clubs in Kansas (now 70+).
This cover story is about one of the top industry talents you will find anywhere, Rodney Steven. He is an articulate, intelligent warrior with an amazing future. Frankly, I would not be at all surprised to see him in the State House as Governor of Kansas some day. I say that because of the amazing story of his life so far. Starting his business on a shoestring with a small, out-of-date racquetball club and hardly any money to speak of, he's expanded and upgraded it dramatically over the years and will generate $20 million this year in his ten locations (with four of those clubs being new startups).
Five of Rodney's Genesis Health Clubs are in Wichita, Kansas. The other five are in Hutchinson, Salina, Emporia, Lawrence and Leavenworth, Kansas. He also owns the Wichita Thunder Ice Hockey Team in partnership with his brothers Brandon and Johnny.
Here's a story of a guy who went from being fresh out of college, and almost in law school, all the way to being the head of a club business that now serves over 43,000 members. Plus, their minor league Ice Hockey Team called the Wichita Thunder made it to the Central Hockey League Finals in their first year of ownership.
Along the way, Rodney Steven has virtually single handedly taken on the State of Kansas with an effort to achieve fairness and a level playing field for his clubs and all of the clubs in the state by starting the Kansas Health and Fitness Association with 73 commercial health clubs in Kansas. There are seven YMCAs in Wichita. The fact that most of them are $20 to $25 million YMCAs that pay no property taxes whatsoever, while Steven pays $1 million a year in property taxes for his clubs, is totally unfair, and Rodney Steven has set his mind and aimed his actions to stop the inequity.
It's my pleasure to present this special cover story interview with Rodney Steven II, age 40, the President and Co-Owner of Genesis Health Clubs, headquartered in Wichita, Kansas.
An In-Depth Interview With Rodney Steven II
Rodney Steven II
Club Insider (C.I.) - Rodney, where were you born and where did you grow up? Also, please tell us about your education.
Rodney Steven II (RS) - I was born here in Wichita, Kansas. I went to college at Southern Illinois in Carbondale, Illinois. I went there on a Division-I tennis scholarship and played tennis there for three years. Tennis is a great sport. It's a sport that you can play your whole life. The contacts and connections that you make in tennis will stay with you forever. Tennis has done a lot for me, obviously. I wouldn't be building tennis clubs without the background in the sport that I have.
C.I. - Please tell us about your family.
RS - My wife's name is Juliette, and we're blessed with six children: Breckyn, Rodney III, Brittany, Vanessa, Rock and Berkley.
C.I. - Rodney, what did you do right out of college at Southern Illinois before you got involved in the club business?
RS - It's a long story. But, to answer the question quickly, I was getting ready to go to law school. I had my applications out everywhere. I got into a couple of law schools, but neither one was what I wanted. So, I went home. Just after I got home, I was working out at a health club called Genesis. Three months later, I ended up taking over that club when I bought it in June, 1994.
C.I. - So, that's how you got your start. What was that club like?
RS - It was mainly a racquetball-only club. It originally had eight racquetball courts, and it had a very small section for weights and cardio. It had real small locker rooms. It was a traditional 1980s racquetball club. It was 16,500 square feet and was only doing about 150 visits a day.
C.I. - Rodney, did you start off as the sole proprietor? Or, did you have a partner in that first club?
RS - I was by myself.
C.I. - Please fast forward from one club to how you got to ten clubs.
RS - Let me give you the short version of all that. My first club was owned by my Uncle Joe, who was a dentist in town. He had two partners in that first club. One was my Dad. They were losing money, and they were getting ready to close the club. They were renting it from the guy who built these two racquetball clubs in town. I came home from college and said, 'Dad, I can take this club over. I want to take it over, and I can make money on it.' He said, 'Don't even touch it. We're losing all kinds of money on it. I had to give your Uncle money last month just to keep the lights on!' I said, 'Dad, I can turn it around!' So, I went to see the man who owned the building. He owned an insurance company here in Wichita. I told him, 'Sir, I'm going to be taking over this health club, and I'm not going to be able to pay you rent for the next three months.' He said, 'If you don't pay me rent, I'm going to kick you guys out of there. You're already a month and a half behind as it is now. If you don't pay the rent, I'm going to kick you out of that building!'
He was basically about to kick me out of his office. I said, 'Sir, I'm not going to pay rent for the next three months. If you need to kick me out, kick me out. But, I won't be paying rent for three months.' And, I didn't pay rent for three months. My fourth month, I sent him a rent check. From then on, I kept sending him a rent check. Well, he came in a few months later and said, 'Hey, the club's looking good. I hear you're painting it. What are you doing here?' He walked around with me. I'm painting the club, I'm doing this, I'm doing that. He's all excited because this is his building that I'm renting and fixing up. About a year goes by, and we're doing very well. I'm meeting and greeting every member. I work the front desk myself; open and close every day. So, I'm meeting all the members and building relationships with them. I have a party every Friday night. I train members in the morning at 6AM. The club is just growing and growing.
About a year later, the owner comes in and I tell him, 'I'd like to buy this club.' He says, 'Well, here's your price. Buy it.' I said, 'I don't have any credit. I need to get a loan. Will you carry me?' He said, 'No, no, no...' About a month or two later, he comes in and brings me a contract and says, 'Here's your contract. I'll carry you. I'll be your bank.' He carried me in that club. He was my bank. I bought the club that day and started making my payments to him. Two years later, I'm really successful. I'm on my honeymoon, and he calls. He says, 'I'll rent you another building.' There was a chain in town that went out of business, and he owned one of the buildings they were leasing. So, I came back a day and a half early from my honeymoon, and I go into that other building. He carries me on that other building, as well. So, he's carrying me on two buildings. It was an old racquetball club that originally had twelve racquetball courts. So, I'm taking out a couple of courts every month. I'll take one out and put a new floor in. So today, those clubs have two racquetball courts each.
Due to the second club, I have to take on my brother, Brandon. He had just graduated college. I said, 'Brandon, I need a partner. It's going to cost us $39,000 to keep this club open this month.' So, my brother and I went in there, and the first month, we sold $42,000 in cash memberships. We just drove the club from there. He was running one, and I was running one. The clubs were doing really well. We realize we don't want to be working in the same building everyday together, so he went into the car business. That's a whole other story. But, we opened our first used car lot. So, I'm running both clubs now, and I'm wanting to do a third club.
A hospital across town calls me and says, 'Don't build that third club. Come buy our club!' So, I went and met with the Catholic Hospital. I went and saw their building, and they wanted $5 million for it. I said 'I can't buy this building. I'd love to, but I don't have that kind of credit.' So, they carried me on my third club. It was a 65,000 square-foot club with a big wellness facility, basketball and a big indoor pool. It's September 13, 1999, and I now have three clubs! Revenues are just really growing! Everything's growing! In 2001, I'm wanting to do another club on the other side of town. I was looking for property and am getting ready to build. There was a club called The Wichita Racquet Club, and it's the largest club in the State. It was owned at one time by Charles and Liz Koch, of Koch Industries, and a doctor in town. I ended up buying that club instead of building my fourth one. Right before that, I went to a bank and bought out the other three club loans with traditional financing, while my clubs were really growing.
I took on my younger brother, Johnny, who came in as my Sales Manager at that time. He's now the Corporate Sales Director for the company. At that point, I owned four clubs. The fourth one I bought was a big tennis club, which was 102,000 square feet when I bought it. I added on 40,000 square feet to the building in 2003. It's 142,000 square feet now. I still spend a good percentage of my time in that club. I added tennis at my third club as well. It's 105,000 square feet now. I did about five additions to that third club. Of course, I'm adding on and remodeling all of the clubs all the time. Those four clubs are all in Wichita.
Venturing Out of Wichita
C.I. - Rodney, at what point did you venture out of Wichita?
RS - After acquiring and improving those four clubs in Wichita, I worked on our first out-of-town club for about three years. I went to Hutchinson, Kansas (a town of about 40,000), where we bought a shopping center there. We became the anchor tenant. Then, for our next location, we went to Salina, Kansas and bought a shopping center with the exact same design as the one we bought in Hutchinson. It's an hour and a half in the opposite direction. That facility now has tennis with a 75,000 square-foot health club and another 75,000 square feet of mall space connected to it.
Then, we went and did a little club in Emporia, Kansas. It is our smallest facility. The town only has 22,000 people in it, and that club is 16,000 square feet. Then, we just very recently did two in Lawrence and Leavenworth that we bought from an existing club chain. They aren't completely rebranded yet. In Leavenworth, we just bought a free standing building a block from the club. We're under construction now and are planning to be done by Christmas. The existing club is still open and running as a Genesis Club, so we'll be moving into the new building when it's done. We're in that same exact process in Lawrence, Kansas.
C.I. - WOW!
RS - So, we own eight of ten of our facilities. We own the buildings and land. We don't want to rent anywhere usually.
C.I. - How did you get involved in the ice rink business and owning a minor league hockey team?
RS - Our 10th facility is the Wichita Ice Center. The City of Wichita put together a Request for Proposals (RFP) to take over their Ice Center. They were about breaking even or losing a little bit of money every year. I thought it was just a perfect location. I told them I'd like to take the facility over and build up the sports of figure skating and ice hockey. So, we put in the proposal, and we won.
Then, at the same time, we put in a health club on the second floor at the Ice Center. It's been open for about a month now, and our Grand Opening is coming up. We built a state-of-the-art, 12,000 square-foot health club upstairs. The total facility is about 80,000 square feet, so we utilize the whole facility. We also opened up a sports bar up there called Pucks. After we'd moved into the Ice Center, there was an opportunity with the hockey team called The Wichita Thunder. It's a Double A hockey team, part of the Central Hockey League. They were getting ready to move the team to Chicago, and I met the Coach, whose name is Kevin McClelland. He's a 4-time Stanley Cup winner himself with the Edmonton Oilers. He talked me into buying the team with the help of others. So, my two brothers and I bought the hockey team last year. Last year was our first season owning a hockey team, and we went all the way to the CHL Finals! We lost in the finals, but it was a great first year and I look forward to our second season. Overall, though, I think the hockey team complements our clubs very well. It gives our members something extra to be a part of and shows our commitment to the community again. Our average attendance was 6,500, and we're in a large arena that holds 13,000. So, we have lots of room for ticket sale growth.
C.I. - Well Rodney, let me reemphasize my previous WOW! You have got an awful lot going on. In my view, you're destined to become one of our industry's true Titans, and there are not a lot of them in our industry. Before we move into the rest of my questions, please tell us about your two brothers, Brandon and Johnny, and of course, your key employees. Tell us the names, titles and tenures of them, please.
RS - My brother Brandon and I are 50/50 partners in the car business as well, which he has really grown to one of the largest dealers in the city over the last ten years. The car business has been quite amazing to us, as he has really grown a great team of people in his organization. Johnny has been a key ingredient for us as he is a fierce competitor and is leading our company as Sales Director. My Director of Operations, Mike Racine, has been with us for 18 years. Preston Peterson, our Director of Personal Training, has 11 years. Our personal training is off the charts, and we do extremely well.
We have other key employees that I want to mention. Angie Kendall is our Group Fitness Director, and she's been with us 19 years. Our Member Services Department, Angie Wooten and Stacy Schwind, have both been with us for 18 years. Our IT Department has been with us 15 years. We actually wrote our own software in our IT Department. We don't use any software brand out there. We've developed our own software for check-in, point-of-sale... everything. Simon Norman, our Tennis Director, has been with us since 2001 and is a very important part of the organization.
C.I. - Given the vast diversification of facilities, services and amenities of your ten Genesis Health Clubs that include tennis, let's talk about your membership fees and rates, enrollment fees, monthly dues, court fees, etc.
RS - We have three levels of membership. They can pick one location, multiple locations or all locations. Our standard joining fee is $200. Single membership monthly dues are between $49 and $59, depending upon the package. Family membership is between $79 and $99.
C.I. - Rodney, please tell us about your personal training business you mentioned earlier.
RS - In 1999/2000, I realized I really wanted to grow my personal training business. So, I brought just about every consultant in the industry to Wichita, Kansas to work with us and make us a better PT group. We were already doing good PT business. Our personal training business just started booming. What changed it was that we started charging a lot more, which enabled us to pay our trainers a lot more. Now, our personal training program is second to none. The program is growing every year. We have 100+ trainers in the company. Our trainers are able to make a phenomenal living now. We even have doctors on our PT staff and a lot of MBA degrees; we have very highly educated trainers on staff. It's amazing to see how much a personal trainer can make these days compared to 15 years ago. I still train with a trainer every day myself. I think it's an invaluable part of training. It keeps me accountable as well. Our annual revenue for personal training for seven locations is about $4 million a year. I've not included our last three clubs' personal training revenues in that number because they're so new, and we're just getting them rolling.
C.I. - (laughing) What do you do with all your money, Rodney?
RS - (laughing) Buy hockey teams! We're going to make money with hockey this year!
C.I. - Let's talk about all your ancillary businesses within your clubs in addition to personal training.
RS - We have the normal stuff. We have snack/smoothie bars at each location called ShakeThis.
C.I. - How many members do you have in your five clubs in your primary market in Wichita?
RS - We have 32,000 members in Wichita and 11,000 in the other five in the other towns. But, keep in mind, most of the out-of-town clubs are very new and are really just getting started.
C.I. - So, you currently have 43,000 members, and that number is growing every day.
RS - That's correct.
C.I. - What about your growth plans? Are you going to continue the out-of-town growth, or are you going to expand more in Wichita?
RS - We're going to be adding more clubs in other towns in Kansas.
The Leader of American Health Clubs in the Fight Against Non-Profit Competition!
C.I. - Rodney, when did you join IHRSA (now HFA), and what value do you get from your IHRSA Membership?
RS - I don't remember when I joined. It's been a long time. I've been very active over the past ten years. IHRSA is an invaluable tool from a lot of perspectives. If you are new at this business, like I was, it helps you get information on things like personal training. All the different manuals they put out and all the different publications they put out, they all represent value. For me, I've faced a large non-profit competitor for ten years, the YMCAs. The Ys in Wichita are some of the strongest YMCAs in the country. In Wichita alone, they brought in $35 million in gross income last year, and they've netted $50 million over the last five years. Yes, that is a 'surplus' of approximately $10 million a year!
C.I. - The YMCAs operate as 501(c)3 not-for-profit businesses, right?
RS - That's right. Norm, I've devoted a lot of time in my life to this issue over the past ten years. What's happening is wrong, and I'm not going to stand for it. I won't quit my fight until there's tax equality in Kansas among for-profit and non-profit heath clubs. They can't hide under government shelter any longer. The government is probably too large to fix this problem that they've created, and we have to get in there and help them fix it. Right now, the YMCAs are in the same business we're in. They sell adult fitness services. That's where 80% of their income comes from. They need to pay taxes. That's the angle I've been pursuing in Topeka, Kansas (State Capitol) for the past seven years where I've had help from IHRSA hiring the right lobbyists and helping me fight the fight. I'll tell you, the first three years were very difficult. It's hard to complain about the YMCA. It's hard to complain about someone who appears to do so much for the community because that's what they talk about.
What they don't talk about is the money they're making and the businesses they're putting out of business. There have been over 40 health clubs in Wichita, Kansas that have closed in my last ten years of business. These seven YMCAs in Wichita are not just normal Ys. They're $20 to $25 million Ys with outdoor water parks, indoor water parks, and they're 100,000 square-foot facilities. What they do is they get a piece of property donated, or sometimes, they will buy it at a large discount and have some of it donated. Then, they take that property off of the tax rolls! They took 13 properties off of the tax rolls for the latest Y they're building right now! So, the taxes on my clubs increase so my competitor can build a new building! They don't pay property tax. They don't pay sales tax. And, of course, they don't pay income tax. I can live with the income tax. What I can't live with is the property tax and the sales tax that they are not paying!
So, the first couple of years, I was fighting an uphill battle, and it was a tough fight. The last three or four years, the politicians, the representatives in our State, are realizing this just isn't right. The YMCAs are not paying over $5 million a year in taxes. That's not right! They're putting people out of business. That's not right! They're shrinking our tax base! They talk about helping kids. Who helps kids more? I pay over $1 million dollars a year in property taxes! Do you know what property tax goes to? It goes to funding our schools. The YMCA pays ZERO on property tax. They pay ZERO sales tax. So, I'm fighting in this state for equality between for-profits and non-profits, and we won't quit until we get it!
C.I. - Well Rodney, you deserve a real pat on the back for all of your efforts and the hard cash investments you've made so far and for how you're making progress in Kansas. IHRSA has been involved in this squabble with the YMCA over their no tax privileges and advantages as a non-profit, and we haven't gotten ANYWHERE AT ALL in 32 years! So, it's really great to hear how strong you stand on this, Rodney, and the progress that you're making! Keep it up!
RS - Well, we did this year, and I'm going to win next year, I promise you! We're fighting for equality in this State, and we won't quit until we get it! I'm putting a lot of time into this fight because it is something that has to happen. They took a huge chunk out of our business in Wichita, Norm! I mean a HUGE chunk. Obviously, that's why I started growing out of Wichita. You come in and build a few $25 million Y's close to our clubs, and you do it four or five more times, it will test the best of an operator.
• • •
Rodney Steven is a bright, articulate and very competitive guy, and we wish him well in his efforts with his clubs and his efforts with trying to protect his clubs by creating a level playing field between commercial health clubs and non-profit YMCAs. This is a Herculean task that Rodney has taken on, and once he is successful, he will be providing clubs nationwide with a wonderful blueprint to follow as they go about attempting to level the playing fields in their own states between YMCAs and commercial, for-profit health clubs. Thanks Rodney for your time on this interview and your pre-publication review. We wish you and your family, your brothers and your Genesis Health Club Team all the best in the future.
• • •
An Update From Rodney Steven II
C.I. - What has been the company's trajectory since COVID? What major changes have you made?
RS - Since 2020, Genesis has undergone one of the most transformative phases in our history. Emerging from COVID, we didn't retreat; instead, we went on the offense. We've expanded aggressively yet deliberately, acquiring over a dozen clubs in strategic markets. These were not merely opportunistic purchases. Each acquisition, whether it was the Atlantic Club in New Jersey, the Saw Mill Clubs in New York, the Lexington Tennis Club in Kentucky, or eight Esporta locations across the South, was part of a larger plan to build regional density and extend our operating model into communities where we can scale it effectively.
However, growth in a footprint only works if the foundation is strong. Therefore, we have invested millions back into our core club portfolio. We've remodeled several locations with premium finishes, modernized locker rooms, installed cold plunge facilities, created recovery lounges, built new studios and expanded our aquatics and tennis offerings. This was not merely cosmetic; it was a repositioning. To continue to serve our members with high-value, high-service destinations that help fulfill members lifestyle needs today.
Internally, we have restructured to support that scale. We added regional leadership layers to maintain clubs' connections to their culture and address their operational needs. We improved communication across states, built a stronger onboarding and training program and enhanced visibility at the field level for executive decision-making.
On the business side, we have expanded our non-dues revenue streams to include youth programs, tennis, spas, pickleball and retail, making them essential components of our model. More recently, we have begun building programming specifically for members using GLP-1s. We are designing metabolic conditioning and strength-based support programs that provide these members with a long-term plan for sustainable health, not just for weight loss.
We're seeing the payoff. Sales are up, retention is stronger and engagement is deeper. We're not just a gym; they see us as a partner in their health journey.
C.I. - Can you provide some key metrics for 2024?
RS - Our prices have continued to increase as our value increases everyday:
- Revenue Increase over 2023: 20%
- EBITDA % Increase over 2023: 20%
C.I. - Overall thoughts on the industry trends and key positive changes?
RS - The industry is on the right course. After years of emphasis on aesthetics, calorie burn and vanity metrics, a return to performance-based fitness is underway. Strength is once again at the center, and that's a good thing for everyone, especially long-term member outcomes.
Another significant shift is how people evaluate clubs. Younger members, particularly Gen Z and Alpha, approach this with a completely different perspective. They're not only assessing equipment; they're also examining your culture, technology integration, flexibility and mental health support. They want to know if your brand aligns with their values, and they can detect inauthenticity in seconds. This compels all of us to be more precise about who we are and how we present ourselves.
Finally, members overall are just more educated. They're asking more thoughtful questions. Whether they're using GLP-1s, managing blood sugar or training for healthy aging, they want trainers who know more and programs that deliver more. We welcome that. It raises the bar, and we're ready for it.
C.I. - Key successes of HFA and likely next steps in the near future?
RS - The rebranding of the Health & Fitness Association wasn't just smart; it was necessary. IHRSA had established a strong foundation, but the name didn't reflect the broader role this industry plays in public health. The shift to HFA clarified that we're not just gym operators; we're health advocates, behavior change experts, and frontline partners in preventing chronic disease. That clarity provided more room to unite independents, franchises and big-box chains under one mission.
The most significant win was hiring a CEO that politically knows how to advocate for our industry. We have the greatest industry, and we need to be proud about soliciting and encouraging our elected officials to fight for better health to improve our industry. Our elected officials need to hear from us more and feel our support through communication and of course financially being heard.
C.I. - What overall challenges lie ahead for the industry and any planned changes? (Tariffs, interest rates, inflation, GLP-1 patients, new Federal legislation, more Generation Alphas/Zers entering the industry, attracting seniors, etc.)
RS - Costs are rising across the board. Equipment, insurance, wages, remodels; everything is more expensive. It is very expensive to build a club today, and it takes so much time! I believe the fitness product is so strong that our dues have to represent the outcomes our members expect and deserve. Members are savvy. If they're going to pay more, they need to see the value. That's why we're focusing on enhancing the experience: improved recovery, better amenities and advanced staff training.
Staffing remains a significant challenge. Our front desk, club managers, trainers and instructors represent the brand. When turnover is high, consistency tends to diminish. We're tackling this by prioritizing a member-first experience and strengthening regional support. Culture is built club by club, which requires intentional leadership.
C.I. - Overall view of the industry for next 2 - 3 years? What segments, including yours, are likely to benefit?
RS - Luckily for us, health and fitness is top of mind awareness for everyone. I believe the opportunity for our industry is greater than ever before. We, as an industry, just have to go and perform by adding great value and service to our members.
We are still heavily investing in our industry because we love it! While staying out of the race to the bottom. We have to continue to build our culture and product to exceed our members expectations and needs and experiences they talk about.
You're either going to be a destination or a discount, and we know which side of that line we're on.
C.I. - You have had continued success acquiring clubs in recent years, including in new States and regions. How does the future look for Genesis? Any guess as to how many realistically you might acquire in 2025 and then in 2026?
RS - We've expanded consistently throughout the years, and that's by design, not by accident. Every acquisition is evaluated through one lens: can we make this better, and can it make us better?
We've recently added clubs in New Jersey, Arkansas, Florida, Kentucky, Louisiana and throughout the Midwest and South. Realistically, we're on track to continue to grow, depending on how the deals develop. If the right portfolio appears, we're prepared to move more quickly. I believe there is more opportunity out there than I have ever seen before.
C.I. - Any final advice?
RS - People and Culture.
• • •
Thank you again to Rodney Steven II for his time, knowledge and wisdom. If you are looking to learn from anyone, he is definitely one you should consider!!!
