A Sydney councillor has come under fire after the inner-city gym he owned suddenly shut, leaving members hundreds of dollars out of pocket.
The gym, Bayswater 24/7 Fitness in Surry Hills, is owned by Woollahra councillor and former deputy mayor Peter Cavanagh.
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News of its closure was broken to members and trainers alike, when they were met by a security guard at the end of September.
"Basically everyone arrived and the gym was locked ... the security guard said that the premises had been repossessed and the gym was now closed," said Nic Halley, who had been a member of the gym for six years.
The gym is said to have had about 600 members.
"I, like many others, had paid a year in advance and it's been made clear by the owner Peter Cavanagh that there is no chance anybody is getting a cent back ... I am owed around $600."
In an email sent to Mr Halley and marked as a "letter from the director", Mr Cavanagh, a chartered accountant, described the closure of the gym as "a great loss ... both financially and emotionally".
He said that the company had "but a few dollars in the bank now and no real assets".
"What money was left at closure was used to pay up the final wages, superannuaÂtion etc due to the employees [and] make good costs.
"Sadly, by the time all claims are totalled up and divided by the few dollars left, there would not even be a single cent in the dollar left to divide."The current lease for the premises, at 58 Kippax Street, was signed in 2013 and was due to expire in May 2018.
"In essence [Mr Cavanagh] couldn't afford to maintain the rent [of] $19,479 per month, and he wanted us to waive all increases and outgoings," said real estate agent Achilles Peshos from The Edge Property Agency, who manages the property.
Mr Peshos said the landlord rejected a request for the rent to be reduced to $14,000 a month, but that "payment plans" were offered.
"It's been very difficult ... We've had to return to open the building for gym members up to 60 times, to allow them to get their gear."
While the gym operated under the registered company Bayswater 24/7 Fitness Pty Limited, all equipment in the gym was owned by Gymnasia Holdings Pty Ltd, of which Mr Cavanagh is also the director.
Mr Peshos said this meant the landlord was unable to clear and re-let the premises to the incoming tenant.
"Under the lease, any assets owned by the lessee can be sold to help recoup some of the money, but we can't do that because it is listed under a different entity," he said.
Mr Cavanagh did not respond to Fairfax Media's requests to comment, but a statement emailed to members in September said that the "landlord had refused to negotiate a reasonable outcome", while "all efforts to come to a reasonable and mutually beneficial outcome have been rebuffed."
Members were also told their memberships would be honoured at Newtown Gym, of which Mr Cavanagh is also the director.
Andrew Greig, who worked as a trainer at the gym from 2007, said he had lost at least 30 per cent of his clients since the closure. He also had to refund prepaid client fees.
"It was completely unexpected ... The first I heard was on the day I turned up with a client at 7am and was denied access."
Like other trainers, Mr Greig paid about $500 a month in rent to use the gym's facilities.
A spokesperson for NSW Fair Trading could not comment on the gym's closure, but said "consumers who had not received goods or services paid for by credit card, may choose to contact their financial institution to dispute payments".
Do you know more? Email lucy.cormack@fairfaxmedia.com.au