Developer promises to clear $2.2 million debt with SA Harness Racing Club for Globe Derby Park land
A property developer has pledged to bail South Australia’s peak harness racing club out of financial strife by paying a $2.2 million debt he owes for a parcel of land.
North & North East
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- March: Harness racing in South Australia has reached breaking point
- May: Deal brokered in bitter dispute
A property developer has vowed to repay a $2.2 million debt to the state’s peak harness racing club to help the financially troubled sport survive.
The payment would help the SA Harness Racing Club, which operates Globe Derby Park, clear its debts.
The club tried to get out of long-term financial difficulties in 2017 by selling a prime parcel of land on the corner of Port Wakefield Rd and Globe Derby Dve for $5.5 million.
It had agreed to take a $2 million deposit from an Adelaide company, GIC Globe Derby Park Pty Ltd, with monthly instalments of $50,000 to be paid until planning approval was granted.
Under the arrangement, the debt would then be cleared in full.
However, it has emerged GIC stopped making instalments after several months, forcing the club to issue default notices.
Speculation about the deal has been circulating since a finance company posted legal notices last October on the block of land.
Inquires by The Advertiser have confirmed there is still $2.2 million remaining to be paid to the club by GIC Globe Derby Park Pty Ltd.
The company’s managing director, Michael Vidale, has told The Advertiser the money would be paid within the next two months.
Mr Vidale said the project had encountered a number of issues, including delays with the council approval and difficulties securing finance.
“Those issues have since been resolved, the club recently has been paid $350,000 and everything is on track,” he said.
“The remaining $2.2 million will be paid, the club will be debt-free and we will work with the club to make sure it has a future and harness racing has a future.”
Mr Vidale’s comments come as the sport’s peak body, Harness Racing SA, seeks an urgent meeting with the SAHRC committee to discuss its financial affairs.
Some members are blaming the land deal for the club posting an operating loss of $1.5 million in the last financial year.
The club was planning to use the outstanding $2.2 million from GIC Globe Derby Park to repay a $1 million loan it received from a member, businessman Geoff Easom, at 9 per cent interest and another loan from the Police Credit Union of $1.45 million, with an unknown interest rate.
Several attempts by The Advertiser to discuss the club’s financial situation with its president, Ann Mowbay, were unsuccessful.
Mrs Mowbay replaced Richard Miller as presiding member at the club’s annual general meeting last November, which also elected four new committee members.
In a notice to members last October, Mr Miller said finalisation of the land sale to GIC Globe Derby Park had been dependent on Salisbury Council approving a commercial subdivision.
In the club’s 2018-19 annual report, Mr Miller said his committee’s “major focus over the past year” had been trying to get its outstanding money from GIC Globe Derby Park.
“Following several unsuccessful attempts to mediate the situation, SAHRC served GIC with an official Notice of Default under the terms of the agreement,” he said.
Mr Miller said the club would “receive the remaining balance of the sales proceeds owed” when GIC Globe Derby Park secured new financing.
“Once this is finalised, the club will be positioned to progress the retirement of the outstanding loans with the Police Credit Union and member Geoff Easom.”
Mr Miller told members the SAHRC remained determined to build a new licensed entertainment venue to replace its existing facility at Globe Derby Park, renowned for many years for its buffet.
“It is considered essential for SAHRC to pursue investment in a new licensed facility adjacent to Port Wakefield Rd to significantly improve the revenue potential of the club’s underperforming licensed facilities that are largely hidden away in the back of the grandstand,” he said.
“To succeed in the long-term, SAHRC requires a new, modern facility located on the club’s own land adjacent to Port Wakefield Rd, similar to our nearest direct competitors, to optimise revenues achievable from its existing gaming and liquor licenses.”
The club’s commitment to the project came despite audited financial statements showing the club “has been unable to settle creditor payments on a timely basis”.
“These conditions indicate the existence of a material uncertainty that may cast significant doubt about the association’s ability to continue as a going concern.” the statements noted.
“Therefore the association may be unable to realise its assets and discharge its liabilities in the normal course of business.”
The annual report said that, if the club did not receive the outstanding $2.2 million from GIC Globe Derby Park, it will “need to obtain alternative finance or enter into further land sales to meet any cash shortfalls”.
Harness Racing SA chief executive Ross Neal declined to comment.