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Chris Kane

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Re:St. Andrews Beach closed
« Reply #25 on: October 16, 2007, 01:27:47 AM »
What in particular did he say to make you think that Mark?

Mark_F

Re:St. Andrews Beach closed
« Reply #26 on: October 16, 2007, 01:40:57 AM »
Chris,

Because he thinks someone is going to be able to pick it up cheap.

Because no one is going to buy 174 hectares of land and have one course on it, which means substantial further investment in another course, to go along with clubhouse, practice and maintenance facilites and further roads and car parking infrastructure.

Do you think there is another 40-50,000 plus rounds to be squeezed out of public golfers in Melbourne?

Anthony Butler

  • Karma: +0/-0
Re:St. Andrews Beach closed
« Reply #27 on: October 16, 2007, 06:41:41 AM »
Mark,

I saw this in The Age today which seems to suggest that some moves are afoot. Where this leads - who knows.

The Age]http://www.theage.com.au/news/business/golf-club-workers-rescued-from-the-rough/2007/10/15/1192300685490.html]The Age


Not sure who noticed the last line in this article... if true, Tom Doak has been a model of restraint in his comments towards ownership.

The rather tattered history of these individuals explains why it is hard to attract outside investment into Australian property deals. Simply recapitalize another vehicle and change a couple of partners and the sins of the past are wiped away.

The prospects for any golf club in Australia that is not owned fully by the membership and still wants to operate as a profitable entity are dim indeed. NSWGC and most of the other top 10 courses get approximately $500,000 a year in free business, legal and other advice from board members etc... otherwise they would be operating in the $200,000 in the red instead of having $250k to put into capital improvements etc... Even then a great deal of the profit is generated by 40+ corporate days a year–which in St. Andrews' case is tough to pull off given the distance from the Melbourne CBD.


« Last Edit: October 16, 2007, 06:43:38 AM by Anthony Butler »
Next!

Justin Ryan

  • Karma: +0/-0
Re:St. Andrews Beach closed
« Reply #28 on: October 16, 2007, 06:48:50 AM »
Because he thinks someone is going to be able to pick it up cheap.  
Because no one is going to buy 174 hectares of land and have one course on it, which means substantial further investment in another course, to go along with clubhouse, practice and maintenance facilites and further roads and car parking infrastructure.
So because there remains a capital expenditure requirement of $20-$45m someone will be prepared to pay top dollar?  For some reason Daryl Kerrigan comes to mind.


Do you think there is another 40-50,000 plus rounds to be squeezed out of public golfers in Melbourne?
I stand happy to be corrected, but didn't the prospectus state that ~25,000 rounds per year on the Fingal course would provide the revenue to run both courses.  Given there would only be the requirement to fund one course (and Fingal would never be as good as the Gunnamatta), then there should be ample opportunity for return.  Or weren't you thinking when you read the prospectus?

And I did say 'a likely' scenario.  Of course there are plenty of others.
« Last Edit: October 16, 2007, 06:51:23 AM by Justin Ryan »

Mark_F

Re:St. Andrews Beach closed
« Reply #29 on: October 16, 2007, 08:41:05 AM »
So because there remains a capital expenditure requirement of $20-$45m someone will be prepared to pay top dollar?  For some reason Daryl Kerrigan comes to mind.

Even if they managed to pick it up for $5million and only spent a further $20million there is no feasible way to make a return on that outlay, without either sale of shares or property.

Somehow, I think Kenny may be needed at your place soon.

I stand happy to be corrected, but didn't the prospectus state that ~25,000 rounds per year on the Fingal course would provide the revenue to run both courses.  Given there would only be the requirement to fund one course (and Fingal would never be as good as the Gunnamatta), then there should be ample opportunity for return.  Or weren't you thinking when you read the prospectus?

The prospectus did indeed say less than 25,000 rounds per year would provide the revenue, so congratulations to you for picking that up. But that was to run two courses, not pay for all the expense in the first place and deliver a decent return.

You also neglected to mention, or perhaps couldn't find, the part where income from Gunnamatta guests, unaccompanied guests, corporate days and apartment owners was part of the funding mix, so you would in fact need a lot more than 25,000 rounds.

Any idea yet where they are going to come from?

And I did say 'a likely' scenario.  Of course there are plenty of others.

You did indeed. You also said "I cannot imagine", which is a much firmer conviction than "likely".  So can you please clarify which position you hold, assuming that now you are using your real name you actually have a conviction.

Shane Gurnett

  • Karma: +0/-0
Re:St. Andrews Beach closed
« Reply #30 on: October 16, 2007, 09:23:08 AM »
Mark, I admire your optimism and hope it all works out for the best. With the benefit of hindsight, do you wish you had joined somewhere like Woodlands instead and pocketed the $40k difference?

Shane

Justin Ryan

  • Karma: +0/-0
Re:St. Andrews Beach closed
« Reply #31 on: October 17, 2007, 08:17:33 PM »
Even if they managed to pick it up for $5million and only spent a further $20million there is no feasible way to make a return on that outlay, without either sale of shares or property.
I'm assuming that anyone that picks it up for a public course business would not be rushing to further develop the site.  The current temporary clubhouse arrangement is ample for a public course.  

Feasibility is no doubt important to most investors, but there seems to be something about golf courses that often sees it fly out the window.  

And I did say 'a likely' scenario.  Of course there are plenty of others.

You did indeed. You also said "I cannot imagine", which is a much firmer conviction than "likely".  So can you please clarify which position you hold, assuming that now you are using your real name you actually have a conviction.
The 'I cannot imagine' comment related to any potential acquirer relying on the sale of shares for the purposes of funding.  The market for transferable memberships was already poor in Victoria.  I'd suggest the market and the confidence won't be there for a membership offering of any size for a very long time.

John Geary

Re:St. Andrews Beach closed
« Reply #32 on: October 18, 2007, 12:57:44 AM »
Members of the tree house, let me introduce myself.

For many years now I have logged onto Golf Club Atlas on a daily basis content to just peruse the different threads. However, if ever there was a thread I thought I could contribute to, well this is it.

Many of you would know that for the past three & half years I have been employed as the Course Superintendent at The Golf Club St Andrews Beach.

Prior to working at St Andrews Beach, I spent seventeen years as the Course Superintendent at The Frankston Golf Club, which is more commonly known in Melbourne as the Millionaires Club.

I first started @ St Andrews Beach in March 2004 and by that stage shaping of greens, tees & bunkers was well underway under the guidance of Brain Slawnik from Renaissance Golf Design. One of my primary tasks was to employ a construction / maintenance team who had the skills, desire & “passion” to make St Andrews Beach a top 100 course in the world.

Of all the things that really pisses me off about last week’s decision to sack the staff is that ALL of the groundstaff were really “passionate” about the golf course, their work and the project as a whole.

The common denominator amongst all of the staff is that we realized St Andrews Beach has the potential to be really special. The combination of such a spectacular site & great layout doesn’t come along very often & we all recognized that & wanted to be part of it.

These people certainly didn’t join the groundstaff for financial gain as the average grounds man wage is meager at best & they certainly weren’t there because of great working conditions. We were still working out of temporary sites sheds with machinery & equipment housed in shipping containers.  
 
Ironically what has held the golf course back over the past 2 years has been management’s inability to provide sufficient resources (primarily financial.) It’s no secret that we have been running the course on a shoestring & it’s a miracle its still in as good as condition as it currently is.

It seems we were sacked for not playing by managements rules. They seem to be outraged that we refused to continue working & not listen to any of their promises of when we were going to get paid.

Or were we sacked because we threatened to expose the lack of transparency & just how fickle & fragile the company really is.

Interestingly an e mail was sent out by management to all members & shareholders last week explaining that steps are in place to protect its greatest asset, the golf course. I would have thought that a companies greatest asset is its staff.

By sacking the only people really passionate about the golf course & its development I believe Golf Club Properties Limited have exposed the members & shareholders to only greater uncertainty.

Mark_F

Re:St. Andrews Beach closed
« Reply #33 on: October 18, 2007, 05:10:02 AM »
The market for transferable memberships was already poor in Victoria.  I'd suggest the market and the confidence won't be there for a membership offering of any size for a very long time.

Justin,

It's a crying shame that you weren't available as a consultant to this project all those years ago.

I would be happily teeing it up next to you at Woodlands, $40,000 better off, and John Geary and his boys wouldn't have sweat bucketloads over the last three years for nothing. Tom Doak could have consulted at Royal Melbourne instead of Hawtree, and Portsea, the only architectural gem on the Peninsula, would be seeing much more business.

You have a lot to be responsible for.


John:

Many thanks for yours and the boys efforts over the last three years. Day after day the course has been presented in fantastic condition, an extraordinary feat considering the lack of resources at your disposal.

Hopefully GCPL will be out of the door soon, and there may be a position for you again at StAB, as I struggle to imagine how anyone else could do a better and more committed job.

Their behaviour is abomidable.

Chris Kane

  • Karma: +0/-0
Re:St. Andrews Beach closed
« Reply #34 on: October 18, 2007, 07:17:33 AM »
Mark, have there been any guarantees from the directors recently about the value of or continuation of your share should the course be sold or folds?

John, welcome.  A very sad situation, you and your staff deserved much better.  I played there a month ago and the course was superb, as Justin said the sandbelt clubs should be recruiting all of you from the picket line.

Justin Ryan

  • Karma: +0/-0
Re:St. Andrews Beach closed
« Reply #35 on: October 27, 2007, 11:22:49 PM »
John, you and your team have come out of this with your reputations enhanced.  I'm sure it will all turn out for the best for you all.

I think the problems at St Andrews Beach are basically due to the business model of the development, although the other issues you mention play possibly a small role too.

The first time I saw the property I was stunned -I couldn't get back to my bank in Melbourne quick enough to write a cheque, knowing that the land was in the hands of Doak and Clayton.

I think most of these 110 members, like me, allowed their heart to rule their head, for when looked at closely, there are serious credibility issues with the project overall, and everyone else in Melbourne - especially those already members of clubs and much more 'in the know' in regards to the costs involved - looked at it with their brain, and didn't like what they saw.

Namely:
- The actual prospectus itself is very ambiguous in many instances,  and casts doubt upon the project, if not the credibility of those behind it, immediately. For instance, it states at the beginning of mine that the construction of two courses and the clubhouse is not dependent upon sales of shares. Yet later in the document, it states that only the Gunnamatta and clubhouse are guaranteed to be built regardless of share sales.

- The fact that the clubhouse was not dependent upon share sales, but has yet to materialize.

- The $50,000 no fees share relied upon what many people saw as an optimistic number of rounds (25,000) on an as yet unbuilt second course, with an unbuilt hotel thrown into the mix too.
Mark, I'm not sure why you keep taking cheap potshots at me when you have clearly identified many of the difficulties faced on your own.  Next time you'll just need to make sure you read the prospectus before you hand over the cheque and you'll be fine.
« Last Edit: October 27, 2007, 11:26:01 PM by Justin Ryan »

Jon Wiggett

  • Karma: +0/-0
Re:St. Andrews Beach closed
« Reply #36 on: October 28, 2007, 02:15:57 AM »
Just a quick note on the condition of SAB. A lot of people have commented on the fact that SAB was in great condition despite the Super having a very modest budget. But maybe it is because of this modest budget that the course is so good. In the hands of a capable Super who is allowed to do what he knows best it is more than possible in cool season grass areas to produce a top class course with a minimal budget.

So long as the course is given enough chance by not over playing it (average +/-75 rounds through the main playing season) and there are enough man hours to cut properly (greens from hand and everything with reels whilst collecting the clippings from everywhere) then in my experience a budget of $1'000 per week should be more than enough to cover material costs.

Could it be that many clubs set large maintenance budgets and then expect the Super to use it? Does this in turn leads to over feeding and spiraling costs? Having had dealings many clubs throughout Europe I have received an almost universal impression from clubs that if a course is in bad condition then the answer is to throw more money at it. The big exception being clubs with no money and this usually changes as soon as they have a little.

I am sure that the Super at SAB would have welcomed a little more on the maintenance budget to be able to improve on what seems to be an already high standard but I suspect he was also allowed to work in relative peace due to the fact that the owners didn't have the money card as a pressure point to start telling the Super how to spend the budget that they had given him.

I am sure that the situation will be solved in the long term and hope that the Crew will be allowed to carry on the good work in a manner that they want to.  

Shane Gurnett

  • Karma: +0/-0
Re:St. Andrews Beach closed
« Reply #37 on: October 30, 2007, 06:03:05 PM »
Mark, rumour doing the rounds suggests that a sale is happening at $16m, with the existing members retaining their full rights. Do you know any details? This would appear be a great result for all concerned if its true.

Shane

Mark_F

Re:St. Andrews Beach closed
« Reply #38 on: October 30, 2007, 06:22:03 PM »
Shane,

No, I haven't heard that one, but it wouldn't surprise me if it had happened, as there was a creditor's meeting last week, which would have been interesting, to say the least.

I rang them on Monday to find out what is going on, and they said we would be sent an email in the next couple of days, so perhaps that will be it.


Hopefully it is true.



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