Geelong Lawn Tennis Club abandons plans to sell off excess courts for a residential development
An award-winning Geelong sports club has abandoned plans to sell off some of its excess land for a residential development as it battles to stay viable.
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The Geelong Lawn Tennis Club has abandoned an ambitious plan to sell off excess courts for a residential development but faces “serious long-term issues that threaten its viability”, its annual report reveals.
The club’s previous committee had worked on the redevelopment proposal as its “highest priority” with proceeds to be used to invest in a joint venture with the developer.
It would have involved a refresh of the courts and construction of a multipurpose facility with a member’s area.
However, the committee identified “several major risks” including an equity position from the joint venture being lower than originally anticipated and smaller cashflows.
Club president Jason McGregor said plans were abandoned following a special meeting late last year, to seek permission from members to continue negotiations based on setting a floor price for selling land.
However, the club continues to face long term issues threatening its long term operations.
“Chief of these is that it has insufficient funds to reinvest in courts and facilities, and the membership base isn’t large enough to organically generate the necessary funds,” McGregor said in the report.
“The facilities obviously need investment.
“Tennis and squash are mature sports, and it must be a top priority to attract and retain new members.
“Membership numbers have been relatively stable, and sponsorships and family memberships have declined which is concerning.
“The demographic profile of the membership – heavily weighted to older members, means that if no action is taken the decline in membership will accelerate in the next few years.”
Membership numbers stayed stable at 596, two less than the previous year.
However, the club reported a loss of more than $53,000 for the financial year and it will continue to incur losses as maintenance costs increase, making it difficult to build up reserves to invest in courts and facilities.
McGregor also said the club’s ability to make profits was constrained by its existing management agreement
“The (agreement) transfers the membership fees and the net profits from operating the facility in return for paying the club a fixed ‘lease rental’,” McGregor said.
“The agreement doesn’t provide a financial incentive for the club to promote membership and incentivises the manager to prioritise maximising net profits and minimising expenditure.
“It is in the interests of the club that the (agreement) is renegotiated.”
The club currently has almost $98,000 in the bank while incurring legal and consulting costs of nearly $18,000 due to diligence works on the Morphy Birrell development plan.
Club treasurer Peter Bloink said the special general meeting on October 2 was called to gauge members’ opinion on the cost-benefit of continuing to negotiate the plan.
“The prospect of seeing similar transactions continue to steadily drain the club’s cash as we worked through matters of disagreement in that plan was the primary reason for calling (for the meeting),” Bloink said.
Meanwhile, repairs and maintenance expenditure was higher than recent years due to a significant number of failures in ageing capital assets including plumbing on grass courts, court upgrades for Melbourne Pennant and plumbing and gas fitting issues.
Court 28 will be repainted and lined for four pickleball courts with works to begin this month, following “massive interest” in the sport, the report revealed.
However, its Tuesday night in-house competition continues to grow following the installation of LED lights and the club was voted the Tennis Geelong Club of the Year for the second year running.
That stemmed from having both record number of junior teams, surpassing last year’s benchmark, and a superior winning record.
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Originally published as Geelong Lawn Tennis Club abandons plans to sell off excess courts for a residential development
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