ATC signs deal for $100 million sale of Pukekohe training centre - members to vote

The beleagured Auckland Trotting Club will ask members to approve a $100 million sale of the Franklin Park training centre which it says will rid the club of all debt and pave the way for a prosperous future.

But next week’s annual general meeting of the club will see vigorous debate with opponents of the sale warning it could spell the end of harness racing in the North Island.

The ATC has already entered into an agreement for the sale and purchase of its 35.2ha of land at Pukekohe where between 160 and 200 horses are trained.

Club president Jamie Mackinnon says a six figure deposit has been taken from Mount Hope Ltd but the sale is conditional on the land being rezoned and getting the approval of its members and Harness Racing New Zealand.

Mackinnon says the club wasn’t planning on selling Pukekohe and had not put the property on the market but was approached out of the blue.

“The money is good, way more than anyone could have expected. People thought we might get $55 million to $60 million.”

At $100 million it well exceeded present market value, he said, and was more in line with what the land could be worth if the club is successful in its hearing later in the year for a private plan change.

Jamie Mackinnon … “Selling Pukekohe is the future of the club.”Mackinnon said he could not say how long rezoning would take but it is hoped settlement on the property could be completed by December next year.

“This is the best outcome for trotting in the north and would set the pace for the future and show a pathway for young people. All debt would be extinguished and we would have surplus funds and be able to ringfence money to relocate the training centre.

“Will everyone be happy? Probably not. But people need to understand this land will eventually have to be sold. You can’t have a dirty, dusy training centre in the middle of a residential area.

“If members don’t vote for it, it won’t be happening but I’m hoping they’ll see it’s the right thing to do.”

Mackinnon says a key provision in the deal is the club can lease back the Pukekohe land so trainers can continue using the centre until a new one is set up.

A lease-back provision of about three and a half to four years would allow the club plenty of time to find and develop the right property.

“Selling Pukekohe is the future of the club. Unless we reitre debt, the future of the club won’t necessarily be at Alexandra Park. It’s been a difficult time for the board to navigate the threats and demands of the banks, with compounding interest, and they still have a tight hold on us.”

$122 million in loans

The annual report shows the club has $122 million in bank loans after its failed apartment building project.

The club lost $108 million on its two apartment block developments.The revised loss on the two apartment blocks has risen to $108 million after Covid delayed settlements, remediation works and a significant increase in interest rates.

Auditors BDO Auckland report the club made a loss of $6.9 million on its operations during the year ending July 31, 2022, most of that servicing its debt.

It notes that with its liabilities exceeding its assets by $52.1 million, “a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern.”

General manager finance and commercial operations Perrin Montgomery explains in the report that figure reflected only the timing and duration of the club’s borrowings which would be restructured in December.

The club is also due to finally take receipt this week of $51.6 million from Gleneagle for the sale of land fronting Green Lane Rd.

“We’re heading into the AGM with a lot of positives,” says Mackinnon. “I know there are people out there against selling Pukekohe but we’ll be working closely with the Franklin committee on where best to go and making sure they’re part of the process. We all need to look at the big picture and plan for the next 50 years.”

How members feel on selling the Franklin centre will determine who gains seats on the club’s board with former MP Gilbert Myles, along with Denese Latimer and Bob McAuley, challenging the incumbent board members Mackinnon, Scott Plant and Robert Dunn.

Myles is adamant trainers will walk away from harness racing if forced to move from Pukekohe. They and their families were entitled to a secure future and should not have to give up their lifestyles so the ATC can climb out of debt, he says.

Gilbert Myles … campaigning on a platform of transparency.Myles believes the ATC has breached the original agreement when it took over the Franklin club’s assets, failing to make the promised $6 million in improvements to the centre.

“Franklin Park should be transferred to an entity under the auspices of Harness Racing New Zealand to ensure the future of harness racing in the North Island is never again jeopardised.”

Myles believes the club can be saved without losing Pukekohe and instead is calling for the retail spaces in the apartment blocks to be sold.

In the annual report acting CEO Rod Croon reveals 12 of the 14 spaces are now tenanted, with the remaining two under negotiation, ensuring the club will receive $2 million in income each year.

Myles is campaigning on a platform of transparency, pledging members should have more of a say in what happens to the club and not be kept in the dark.

He questions how its member directors can claim tens of thousands of dollars in fees when he believes it contravenes the rules of Incorporated Societies. The club’s seven directors were paid $150,000 for the year with Croon earning another $106,000 as acting CEO.

And he is critical of huge consultants’ fees being paid to board members, his requests for details ignored by the club.

The annual report shows, among others, payments of $963,693 to Graham Harford for legal advice and consultancy services. He stood down from the board partway through the year.

Myles says unless next Wednesday’s AGM is run according to the rules, movers and seconders are recorded, and people are given a chance to speak instead of being treated like naughty schoolboys, members should consider a vote of no confidence in the board.