ATC $78 million in debt, and counting, but still committed to relocating training centre

The Auckland Trotting Club is still committed to setting up a new training centre despite revealing it’s likely to have only $15 million left after the sale of Franklin Park.

The club’s annual report shows its debt to the banks has risen to an alarming $78.3 million while it has been awaiting settlement on the Pukekohe property.

ATC president Jamie MacKinnon says legal costs and interest rates of between 7.6% and 8.3% have contributed to a net deficit of $6.8 million during the year and lowered the projected surplus after the Pukekohe sale from $25 million to just $15 million.

Notes in the accounts further confirm just how costly the delay has been - despite having a $100 million deal with Mount Hope Limited for 35.2 ha of land, the club expects to profit by just $71 million from the sale.

But MacKinnon today moved to reassure people that talk about it backtracking on its promise to develop a new training centre, the lifeblood of northern harness racing, was just that, talk.

There’s plenty of positive spin but the 2023 annual report makes sobering reading.“We won’t have $25 million left any more. I’d suggest it will drop to $15 million. It could be more, it could be less, but we’re painting a worst case scenario.

“I’m pretty confident once we get the deal done we’ll have enough money to do what we have to do.

“Is 15 million enough? We didn’t think so to start with but it’s now looking possible.”

MacKinnon said providing there were no unforseen disasters it was definitely the club’s intention to build a new training centre and he was inspecting one potential site this afternoon.

“A key indicator on what we can afford is what the land is going to cost. How much money we’ve got we’re not sure, it’s still in a state of flux.

“Until we get the deal done and get the next lot of money in, it’s difficult to make plans.”

MacKinnon said he didn’t believe the club should have to shoulder the responsibility of building a new training centre alone.

“We’re the only club in New Zealand considering providing a facility for our trainers. No one else does it. Personally I think Harness Racing New Zealand should have a role in this.

Jamie MacKinnon … looking for support from Harness Racing New Zealand for new training centre.“They should be looking at the big picture and the support that needs to come into the Auckland region. This is where more than half of New Zealand is going to live and if we can’t connect with these people, the industry will not go forward.”

MacKinnon said he’d discussed getting help from HRNZ with CEO Gary Woodham who, while personally supportive, said he couldn’t speak for the board.

Joint venture

MacKinnon said he was also keen to pursue the idea of a building a new centre in a joint venture with northern trainers.

People like John Street and Derek Balle might want to reinvest money from the sale of their Pukekohe land into a new centre, he said.

MacKinnon said if there was a shortfall in money, the club could also consult its members on whether to borrow for the training centre.

“We’d have the ability to pay it back and you could argue some of the money could be used to pay off a mortgage rather than all of it going into stakes and infrastructure.”

MacKinnon said while the project was nine months behind where it was anticipated when members voted for the sale last October, he hoped to be able to report at Tuesday’s annual general meeting that the Environment Court had sealed the deal.

The club had been waiting for the Court to rule since July when successful mediation with appealing parties finished.

When the $100 million sale goes unconditional, Mount Hope would have 23 working days to pay the remaining $8.5 million of its $10 million deposit and 12 months to pay the final $90 million.

“It would be ideal if the club could get an earlier settlement as that would save us $5 million in interest and then we’d have $20 million (for the new centre).”

MacKinnon said the club had been in touch with the buyer on a reasonably frequent basis and there had been no indication they were souring on the deal.

“They’re frustrated like we are because they can’t get moving. They’ve asked us for early access to the property to do a little bit of drainage and we are looking to accommodate them.

“Even if they did pull out - and we’ve had no indication that things are not going forward positively - it wouldn’t be a disaster. It just means the property would go back on the market with a fully consented development. That’s pretty attractive given the mood of the council.

”I’m reading council is considering not granting any more consents for major developments for 10 or 20 years. That should make the purchaser feel pretty good.”

MacKinnon said the importance of having a training centre in Auckland had not escaped the ATC board.

“The club is obligated and its vision is to provide a first class training centre for all its participants and future ones. We’ve got to provide a pathway for young people.

“Ideally we can find somewhere with the size and scale we have at Pukekohe so we can have multiple training tracks, good barns, yards and paddocks and set it up properly.”

MacKinnon said the club believed the two-year lease provision that will kick in on full settlement of the Pukekohe property will allow plenty of time to buy land and establish a new centre.

“The difficulty is the club doesn’t have any money - we’re paying $100,000 a week in interest - and when the $8.5 million comes in it will go straight to the banks so it’s not like we have a deposit.”

The club would need a delayed settlement, he said.

* Financial details in the annual report show the club has loans totalling $80.5 million from Westpac and ANZ and as of July 31 had drawn down $78.35 million.