DEVELOPMENT RISKS FOR ASHGROVE GOLF CLUB
Since the failed Retirement Australia development proposal at Ashgrove 7 years ago, there have been a number of other property developments on Australian Golf Courses . These were mainly Aged Care developments and they have not gone ahead as expected/promised.
Not all of them have gone badly.
Here are the Golf Clubs we are aware of so far that have stories to tell –
- Vincentia Golf Club, Jervis Bay
- Outcome: Course closed by board after members voted no. Friends of Vincentia Golf Club mounting legal challenges and seeking to replace board. Links below
- Shortland Waters Golf Club, Newcastle
- Outcome: Delays in construction caused the club to close and the entire site sold to Property Developer for 1.25 million! Link below
- Merewether Golf Course, Newcastle
- Outcome: Members were given 18 days to consider the proposal. Developer announced, after contract signing, that they would build another 36 more units. Members were not consulted. The Club did not have the resources to fight it. The Clubhouse that members were promised in return for their vote will be smaller to make up for the extra units. Links below.
From above, you can see that there are enough examples of things gone wrong to be able to say that there is risk associated with entering into development partnerships with property developers.
The key is to manage and mitigate that risk. That can only happen if the Board and all Voting Members are fully aware of the scenarios when things have gone wrong and what put a spanner in the works so that a risk management strategy can be devised and put to members to vote on.
In other words, if push comes to shove what will the board be able to do?
Commercial risk management is difficult for an Amateur Sporting Association. Golf Club Boards comprise of volunteers giving their time for the benefit of the Club. They do not have the time, legal resources, financial resources, or the experience to deal effectively with property developers.
It is hard to know how to manage this kind of risk.
The main issue being that once concrete is poured on the course you will never hook a 7 iron into the creek on that land again.
However, a simple summary of these would read –
- Don’t be in financial difficulties when negotiating as this is blood in the water for developers to take the lot
- There is no clear way to know that the developer will abide by the contract. The club opens the gate and lets the developer in and much later money is supposed to start coming in. But that doesn’t always happen.
- Even having a contract in place that has high monthly penalties, corporations can tie up the courts while the Club struggles to keep going minus car parks, club house and a full 18 holes. Always remember they have more lawyers than you.
The rest of this site is further detail of each of these unfortunate outcomes.
Vincentia Golf Club
Summary:
The Board indulged in investments that had nothing to do with playing Golf. As a result they went into debt.
Members were given a proposal to sell part of the course to Developers. The Board would not entertain alternatives.
The Vote went against them and members voted not to sell.
The board then closed the whole course, refusing consultation.
Links:
Shortland Waters Golf Club
The club agreed to sell off part of the course to Aveo two years ago in a deal which rescued the club, at least temporarily, from financial difficulty. Aveo took out a caveat over the course which has thwarted the club’s attempts to borrow money to trade out of its difficulties.’
The club has been suffering a cash-flow crisis after a delay in the construction of new holes to replace those lost to an Aveo retirement village being built in the middle of the course.
Shortland Waters Golf Club members say they feel “dudded” after retirement village developer Aveo bought the 50-hectare course for just $1.25 million.
A former Shortland Waters club director said Aveo had “behaved as you would expect a developer to behave”.
Links:
MereWether Golf Course
Developers advised the club, after the member’s vote was taken, that they would need to build an extra 36 Apartments on top of the 148 that the members voted on.
Members were given 18 days to decide on their vote.
Rising construction costs were cited but it was only after the vote that these extra costs were discovered.This will rediuce the size of the amenities for its new clubhouse.
Links:
“Once concrete is poured on any part of the course, members will never hook a 7 iron into the creek again”
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