Tomorrow’s AGM vote a defining moment in Auckland Trotting Club’s history

Wednesday’s annual general meeting of the Auckland Trotting Club will be the most important in its history, says president Jamie MacKinnon.

“This will be the defining moment as to where the club goes,” says MacKinnon whose board will ask members to vote in favour of a $100 million deal to sell its training centre at Pukekohe.

At stake is the very future of Alexandra Park, the heart of harness racing in the north. Believed to be the site of Auckland’s first organised racing in 1842, it has hosted regular Auckland Trotting Club meetings since 1890.

But with a crippling loss of $108 million from its failed building development, and loans of $122 million, the very real possibility exists that the banks could foreclose on the property.

“The banks have controlled us for a long time and it’s taken a lot of very careful management,” says MacKinnon. “The banks don’t let you just sit on your assets. They want to know how you’re going to pay off your loans and, if we don’t act, we’ll lose control and they’ll sell us.

“We see selling the Franklin training centre as a crucial opportunity to put serious cash into our coffers.”

The club has already entered into a sale and purchase agreement with Jun Li’s Mount Hope Ltd for its 35.2ha of land, subject to a number of provisions, the primary one that it gets rezoning approval.

The private plan change request by the club and Golding Meadows Developments Ltd had an initial planning committee hearing last November and it is scheduled to resume on Thursday.

Rezoning is being sought for 82ha of land which includes the trotting club’s 35ha and Lincoln Farms.The club and developer are seeking to have 82ha of land between Station Rd and Golding Rd rezoned for mixed housing and light industry, included among it the Lincoln Farms’ property bought from owners John and Lynne Street (and leased back).

MacKinnon is hoping the rezoning will be approved early next year given it “ticks a lot of boxes” with the council keen on development close to public transport and the fact it’s not a market gardening area.

But three club members seeking places on the board, Gilbert Myles, Denese Latimer and Bob McAuley, want alternatives explored and question the emergency sale of Pukekohe without a feasibility study.

Under the terms of the agreement, a private plan zoning change would trigger a 12 month period for settlement of the deal, after which the club would have just two years to continue training there while a new training centre is set up.

Doing some basic sums illustrates why the challenging trio is concerned the sale is not the way out for the club.

The club’s $122 million debt was expected to be relieved last Tuesday, the final day for payment of the $51.6 million it is owed by Gleneagle Securities for land bordering Green Lane Rd in a controversial and protracted deal from 2020.

It is believed that money had still not been paid by last Friday but MacKinnon says members will be informed of the latest on Wednesday.

Presuming that money arrives and the club’s debt drops to $70 million, it will still be liable for about $5 million a year in interest until the $100 million is paid.

If that deal is settled as early as December, 2023 as MacKinnon hopes, the best case scenario is the club will come out with $25 million. Another 12 months’ delay would cost the club a further $5 million, leaving just $20 million.

MacKinnon admits he simply doesn’t know whether that is enough to buy land and develop the first class training centre the club is promoting.

‘Nothing has been costed’

“Nothing has been costed. We don’t yet know what we can afford.

Jamie MacKinnon … “If we don’t act, we’ll lose control and the banks will sell us.”“If we get a positive decision on Wednesday, a committee will be set up to look at all the options.

“But we’ve made a commitment to build something superior to what we have now and, if we have to borrow money to complete the complex, we will.

“Clearly the objective is to set up a first class training establishment - that’s crucial to supporting racing at Alexandra Park - and we’ll only get one crack at it, so we’ve got to do it properly.

“It’s not just for people already training, we need to bring new people into the business. We’ve thought about helping to fund people into blocks of land around the new track. How else are they going to get going?”

One suggested option of moving its operation across the road to the Pukekohe galloping centre, while cheaper, would not help those younger trainers set up.

MacKinnon says while it might take a year to find the right property, not threatened by urban expansion, “places have aleady been offered to us, one of a couple of hundred acres that’s not far from Franklin.

“While most of the players are in Clevedon, which is the training hub, that’s not our first option and we’ll be liaising with the Franklin people as they’re the ones most affected.”

Myles and his cohorts believe local trainers will take plenty of convincing given when they agreed to merge with the ATC in 2014, and handed over their land, promises were made to put $6 million into turning Pukekohe into a state of the art training centre, which never eventuated.

In the face of having to move or be prepared to float their horses to a relocated training track, Myles believes many will simply walk away.

And there was always the risk that the hoped-for rezoning might not be approved in which case the terms of agreement allow for the purchase price to be renegotiated down.

Rent from the 14 retail spaces under the apartment buildings is expected to earn the club $2 million a year.Myles believes the ATC should instead sell the 14 retail spots it retained under the apartment buildings, believed to be worth up to $50 million.

MacKinnon counters it would be silly to sell a retail business in a soft market.

“And why would you sell something that gives you income? We can’t fund stake increases out of losses at Pukekohe but the retail spaces will generate $2 million per year for us.

“We need to find more money for stakeholders. How do people survive on racing here once every two weeks? More money has to go to trainers, owners and drivers.”

Myles believes the club’s finances are in such disarray, trading while insolvent or close to it, that the board should step aside and Harness Racing New Zealand appoint a commissioner.