Suddenly it all collapsed…

As we know, the President admitted in March what has been obvious for some time – the Club is not returning to Queen St. So the ‘no-sale’ group were absolutely right.

But what on earth happened?

To refresh your memories, the Buy Back option was first proffered during after the no sale vote in 2016, to persuade members they would have somewhere to go if the building was sold.  Showing his later form as a negotiator, the President slashed another million dollars off a bargain basement price and offered to pay the foreign investors’ tax for Beulah. The first vote of 72% in favour rose to 78%. Many sale votes were contingent on the President’s repeated promises that members would have a lovely, new Club on the old site “.. with no debts..”

June 16, 2017 Jamie Baldwin for Beulah was reported saying in the Sydney Morning Herald as follows: “They will have a place in the new building, they’ll be debt free, have money in the bank and get a $4-5 million new fitout.”

Of course, there were a few problems along the way, but the President overcame all difficulties, according to his Newsletters. In September 2018, we were told that the final plans had to be redrawn, reducing the Club’s area by 100 square metres. The Club then renegotiated the contract of sale. In the President’s own words:

Prudently, the Club had retained a caveat over the property and was thus able to negotiate from a position of some strength. After considerable negotiation an agreement was reached. [..] the sale price for the four floors in the new building has been reduced $1.5 million from $12.7 million to $11.2 million. This is a very satisfactory outcome for the Club and its Members. I would like to thank our Committee and our Legal (sic) advisors for their work in this sensitive and important matter.”

So two years ago, the Club has “a position of some strength”. As recently as July 2019, the President assured us:

In summary, our immediate and long term, future is assured.  We retain the right to our Queen Street venue, which in itself is an amazing asset.  Our best years are ahead

Suddenly, it’s all come crashing down. But why?  The President’s explanation? In his own words: “I got the feeling they’d really forgotten about [the Celtic Club] project, and thought ‘We’re not really f—ing interested, we’ve got bigger fish to fry over in Southbank’,” Mr Shanahan said.

Why is the President only seeking the return of the deposit when the Club has incurred far greater costs, including rents on two properties, massive legal costs, loss of amenity and paying the foreign investment tax for Beulah?

Apparently the crack negotiating team at the Club has just noticed that Beulah put in only goods lifts to the first four floors. Why didn’t the Committee check the plans? The contract definitions specifically stated that there were no elevators for the Club – what the legal firm didn’t read the definitions? The plan wasn’t registered by the due date – what neither the legal team nor the Committee was keeping an eye on the register?  It’s a publicly available document.

For three years, the President has insisted that the ‘negotiations’ have to be confidential.  Now that the deal’s off, the commercial in confidence excuse won’t wash any more. Has the Committee really been negotiating with Beulah or is it all just a fairy tale?  If the members can’t see the minutes now, then we can all draw our own conclusions.

On the way to this train wreck, the current Committee have lost at least $12.7 million of the Club’s capital, incurred accumulated deficits of over $1.4 million over the last two financial years and seen the Club’s membership reduced to 486 full members – half the number in 2016.

But what should we expect when:

  • there has been a “revolving door” of Vice Presidents, Secretaries, Treasurers and Committee members;
  • two audit committees resigned;
  • the internal auditors (Pitcher Partners) were not asked to do any work;
  • there is still no Strategic Plan or Business Plan;

In addition – what has happened to the President’s promises:

  • to re-negotiate the lease at the Metropolitan; and
  • that the restricted hours at the Metropolitan were temporary.

So another promised Information Meeting.  Will that really go ahead or will coronavirus be a useful excuse to call it off?  Will members be given access to any real information or just fobbed off with stories?

Reprinted with permission of Dire Straits

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