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Struggling Shortland Waters takes swing at Aveo over retirement village development

POSTED ON August 15, 2018 @ 6:24 pm

Shortland Waters Golf Club says the company building a retirement village in the middle of its course has shown a “total lack of empathy” by declining to help the club overcome its financial difficulties.

The club has gone into voluntary administration and is seeking another club to merge with after two years of building work at the course has discouraged golfers and left it with a cash-flow crisis.

Aveo, the company behind the $220 million retirement village, said in a Herald report on Saturday that it would “not be a candidate” to take over managing the course.

Several other Newcastle golf clubs, including Belmont, are crunching the numbers on taking over the former Steelworks course, where disruption from two years of building work has created cash-flow problems.

Aveo is building a 300-lot retirement village in the middle of the course and paying for six new holes and a clubhouse.

None of these construction projects is under threat, but the redevelopment has left the course with temporary holes, a clubhouse under construction and parking issues.

“Aveo has previously provided $8.5 million in financial support to complete the Shortland Waters golf clubhouse and new course holes,” a spokesperson said in Saturday’s report.

But the volunteers who run the golf club said on Tuesday that the $8.5 million was not “financial support” but part of a $10.7 million land-sale agreement with Aveo.

Club treasurer Kerry Duggan said the works had taken longer than expected and Aveo had a moral obligation to support the club until it could start trading properly again.

He said a works program from April 2016 forecast that the new holes would be ready for play by May 2018.

“The ongoing delay in completing the golf club’s works program continues to impact the club’s ability to trade normally,” the club volunteers said in a letter to the Herald.

Golf industry in decline

Shortland Waters’ financial problems reflect a widespread decline in the golf industry, which has increasingly struggled to attract time-poor customers.

Many other Hunter clubs, including Merewether, Newcastle, Waratah and Belmont, are examining redevelopment opportunities to boost flagging income.

Cessnock Golf Club went into vuluntary administration in May with debts of more than $11 million, 13 years after entering into a joint venture with Daracon Group for a $30 million redevelopment.

Mr Duggan said he had no regrets about the Aveo deal, which had saved Shortland Waters from oblivion two years ago, and the club had no major debts.

“The only problem with that is the length of time the development has impacted on the course. The club itself, prior to the development, was basically heading out of business,” he said.

The new clubhouse at Shortland Waters.

The new clubhouse at Shortland Waters.

“You drive in and all you can see is wire fences everywhere. I call it the Hunter Street syndrome.

“I’m certain that with the new golf holes being ready for play early in the new year, all the work surrounding the new clubhouse completed in the next month or two, we’ll have a brand new product to get to the market place.”

Club members bought the Steelworks course off BHP in 2000 and renamed it Shortland Waters.

Without a merger, the club will have to seek a line of credit to pay staff and other operating costs.

‘Use it or lose it’

Mr Duggan said Aveo was not interested in taking over the course.

“At the end of the day, what people have to realise is whether we maintain a community asset in community hands or whether it eventually cedes to becoming a piece of real estate. That’s the different picture.

“It’s the old case of use it lose it. If you can’t maintain it as a community golf course – if it’s not a financially viable proposition – the land gets liquidated, a developer comes in and buys it and turns it into a housing estate.”

Aveo said in June that it had sold all 50 houses in the $25 million first stage of the $220 million Shortland Waters development and was breaking ground on the 45 villas in stage two.

Source: the Herald

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