What’s next for e-Fitness site in Biloxi? ‘It couldn’t have worked out any worse.’
The ill-fated e-Fitness Wellness & Health Center in North Biloxi is on the auction block at a starting price of $2.5 million.
Among the parties that have been interested in the property since it went on the market several years ago are the city of Biloxi, churches and sports groups.
Southeast Commercial Real Estate had the property listed at $4.75 million, down from an asking price of $5.5 million in 2017.
Trustmark National Bank loaned 38 investors, including doctors and lawyers, $13.4 million for the e-Fitness project. The center was over-budget and behind schedule when it opened in late 2007 right before the recession started. It closed in August 2016.
Doctors who supported e-Fitness envisioned a place where patients could tackle obesity, heart disease, smoking and other health issues. The sprawling center, which has about 123,000 square feet, offered far more than the standard exercise equipment: indoor and outdoor pools, a child-care center packed with activities, a cafe that emphasized healthy food, supervised weight loss and more.
Nobody counted on the hefty construction costs after Hurricane Katrina or the economic recession that hit the Mississippi Gulf Coast in 2008.
“It was a noble cause,” said one of the investors, dentist Steve Miner of Ocean Springs. “Things got twisted and turned upside down. It couldn’t have worked out any worse.”
Doctors forced into bankruptcy
Most of the investors were able to arrange buyouts with Trustmark that freed them from personal loan guarantees, but the bank sued four doctors and Miner, who did not participate in the buyout.
Miner had sold his share in the company and was not informed of the buyout offer. He said he didn’t know he still had any stake in the company and the loan guaranty obligation.
Trustmark sued him and the four doctors in October 2015, claiming they owed a total of more than $2 million. Miner and two of the doctors were forced into bankruptcy.
Miner said in a recent interview that he was able to reach a settlement with Trustmark through the bankruptcy case.
“It’s certainly been a journey,” the 66-year-old said. He said he’s still practicing dentistry and enjoying it, which is a good thing because he will not be able to retire anytime soon.
“I was not in the loop when they made the offer to the others for the $250,000 buyout, but it all worked out,” he said. “I’m still hard at it for several more years.”
Chiropractor Tim Murphy was unable to come up with money for the buyout after losing his home and suffering damage to his business from Hurricane Katrina. He thought he would have a chance later to strike an agreement with Trustmark.
Trustmark, he said, refused any further negotiations. Instead, he was hit with the lawsuit and, like the other doctors sued, had his personal bank account frozen.
He said the loan on e-Fit was current when Trustmark decided not to renew it and instead closed the business, turning loose 70 employees and more than 100 clients registered in the seniors program.
Murphy, 59, also sees many years of work in his future.
“I’ll now be practicing until I’m 70,” he said.
Trustmark recoups most of its investment
Trustmark has recouped most of the millions it loaned the e-Fitness businesses, court records show. By October 2016, a Trustmark legal filing showed the debt was under $2.36 million.
The e-Fit property includes two buildings, one of them with unfinished retail and office space. E-Fit sits on a six-acre interior parcel with an access easement to Richard Drive, and Biloxi High School nearby.
A number of entities have expressed interest in the property since it has been on the market.
“It’s set up as a fitness facility, so it’s going to take a considerable investment to convert it to another use,” Broker Tim Carlson of Southeast Commercial said.
This story was originally published December 9, 2019 at 11:48 AM.
