ATC makes the hard calls by cutting staff and its functions business to ‘preserve the club’

The Auckland Trotting Club is the latest organisation to cut its costs, outlining a major restructuring in a letter to its members.

The ATC’s plans come as the twittersphere lights up today with news that the TAB is to reportedly shed 30% of its workforce, with 160 of those on salaries and 70 contractors to be made redundant.

The ATC, already $70 million in debt through its beleaguered building project, is making savings by cutting staff in its HR, finance and IT departments and is to close down its food and beverage and functions business.

ATC CEO Mauro Barsi says in the letter that with the post COVID-19 landscape hard to predict “the club is making a series of decisions to best preserve the organisation.”

“We do not know when we will be able to return to large scale events and activities on site – or even if we will be able to do so,” says Barsi of the functions operation.

Mauro Barsi … “the club is making a series of decisions to best preserve the organisation.”A lot of people were involved in the running of non race night functions and the club believes it cannot afford to wait until Christmas to see if there is still an appetite for the buffet style meals it has traditionally provided.

If, and when, large scale gatherings are allowed, the club would assess whether it would rekindle the events.

The Alex, the ATC’s popular sports bar and cafe will continue, it being seen as the hub of the club, but any additional race night dining might be done by caterers.

“We are sad to see some talented and committed team members leave us. But our objective has been to ensure the remaining team (and funding) supports and focuses on those parts of the business that have a high chance of recovering from the impacts of COVID-19.”

With the ATC believed to be groaning under the weight of $1 million-a-month repayments to its banks, it is actively working to find buyers for its Manukau Rd frontage, which is presently under lease to Caltex and Burger King.

It is understood the ATC’s earlier attempts to realise between $18 million and $20 million for the property failed.

“We are still working with the same prospective purchaser but the Burger King receivership negotiations are adding further delays,” says Barsi.

When the club has an unconditional offer it would refer it to its members for feedback, he says.

Alexandra Park has been a popular gathering place for corporate functions at its Top of the Park and Tasman rooms.The club is also trying to resell 26 of its apartments whose owners opted out through the continuing delays. “Unfortunately four conditional contracts were cancelled once the lockdown came into effect.”

Barsi says while work on both developments had to stop during the alert level 4 lockdown, 180 to 190 workers are back on the job on each building.

The club was working with both contractors to agree on new completion dates - previously they had been late April, 2020 and late July, 2020.

“Apart from some minor costs, the main financial impacts are the bank interest costs for the completion delay.”

The ATC is said to have the support of its banks, ANZ and Westpac, because it still has assets it can lease or sell - the Auckland Blues building, which brings in revenue of around $500,000 a year, has not been listed for sale yet. And other sites fronting Greenlane Rd, like Lollipops and the one adjacent to the buildings under construction could also be offered. As a last resort, the old Epsom stand could even be demolished and the site utilised.

The ATC is keen to progress the leasing of its business sites under the apartments which, when fully occupied, are projected to earn between $2 million and $2.5 million a year.

Barsi says in the letter that the court case between the club and the builder it dismissed, Canam, which is suing for $50 million, has been deferred until July and a decision should be known by September.

The club plans to hold a special general meeting later in the year to inform members of its progress on key matters.