Arundel Hills Country Club in administration after several complaints were dodged by management
Golf courses have long been a key plank of the Gold Coast’s image as a tourism city but many, including Arundel Hills Country Club have faced closure. Here’s why.
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
Golf courses have long been a key plank of the Gold Coast’s image as a tourism city.
For decades they have been a key magnet for travellers and business trips, with some of the world’s top players brought in to design the pristine fairways.
This week saw one of the city’s best-known golf courses close.
The company behind Arundel Hills Country Club, Zhongsheng Management, was placed in external administration on Tuesday morning.
It was the latest sad turn of events for the course, which had been dogged by complaints from members about the poorly-maintained facilities.
While there have been courses in the city for decades, the 1980s brought an explosion of courses to cater to the booming Japanese tourist market.
Many were built through the 1980s and 1990s, including Royal Pines, Lakelands, Palm Meadows, The Grand, Hope Island and Sanctuary Cove.
But the 1997 Asian financial crisis largely curtailed the Japanese market and many of these cash cows hit tough times as overseas visitor numbers declined.
HOPE ISLAND GOLF CLUB
In 1999, Hope Island developer Shinko Australia fell into liquidation and was served with a wind-up notice after failing to repay a $700,000 loan.
The company had entered the market in the mid-1980s at the peak of the golf boom and bought the Hope Island site from developer Eddie Kornhauser.
But the massive changes to the economy and its own declining financial position forced the company to offload Hope Island for $20m.
The move allowed the course to continue operating.
KOORALBYN RESORT
in the Hinterland was a famous hangout for the rich and famous in the 1980s.
Media mogul Kerry Packer named it as his favourite holiday location and was a frequent visitor through his latter years, using its facilities to play polo and golf.
But the resort and its hotel hit tough times in the years following Packer’s 2005 death and in 2008 it went into liquidation and closed its doors.
Unfortunately, its mortgagee was MFS Group which itself failed the same year.
The resort remained closed for more than five years before it was bought in late 2013 by businessman Peter Huang for more than $6m.
Mr Huang started a $10m revamp of the course, hotel and facilities the following year. It reopened in mid-2016 only to hit tough times again in early 2020 when the pandemic forced the closure of Australia’s borders with China, cutting off its main source of income.
It went back on the market in 2021.
SURFERS PARADISE GOLF CLUB
In 2007, John Fish unveiled a proposed $500m redevelopment of the Surfers Paradise Golf Club, which included nine-storey buildings replacing the golf club.
The project was planned by Mr Fish and developer Edwin Yu and was made possible by a vote to sell the golf club land for $15m. Members were to move to the exclusive Glades golf course at Robina.
The project was opposed by residents and ultimately failed because of the global financial crisis.
HELENSVALE GOLF CLUB
An institution of the suburb, Helensvale Golf Club faced permanent closure in 2013 after finding itself in more than $700,000 of debt thanks to high overheads and declining revenue.
Keen to prevent the site from being snapped up by developers, the Gold Coast City Council took the unusual step of buying the golf club itself.
Area councillor William Owen-Jones pushed the proposal after an election promise to support the cash-strapped organisation.
Cr Owen-Jones said he would do “whatever he can” to save the club because he believed it was the council’s responsibility.
“This is a classic example of moving to assist a sporting club and if we’re a city big enough to be involved in the Commonwealth Games, we’re a city big enough to support grassroots sport,” Cr Owen-Jones told the Bulletin at the time.
Council leased the operation of the course to Jigsaw Community Services. However, the company went into liquidation in early 2018.
The course remained closed while the council put the site’s operations to tender several times through 2018 and 2019.
However, it failed to secure an operator and maintenance bills topped $300,000 a month.
Finally, in late 2019, the lease was given to new operators Brett Lawton, his son Christopher, and daughter Danielle who reopened it in November 2019.
EMBATTLED GOLF COURSE UNDER CONTRACT
Sale negotiations are under way for the besieged Arundel Hills Golf Course, as land title records reveal the owners recently mortgaged the property with an unconventional lender.
Two Victorian businessmen have agreed to purchase the 67ha property, which has previously plans for up to 78 new homes plus a hotel or aged care facility with 100 rooms.
Title documents reveal Melbourne barrister Andrew Barbayannis and property broker Dale Carroll lodged a caveat for the property on April 4.
Mr Carroll told the Bulletin the matter was “sensitive”, but that golfers would ultimately be happy with their plans. He could not provide further comment.
The company behind Arundel Hills Country Club, Zhongsheng Management, was placed in external administration on Tuesday morning, with Graham Killer of Grant Thornton appointed administrator.
The course was closed and staff were told not to return to work.
Administrators said it was too early to reveal the cause of the company’s financial trouble, however title documents may provide some insight.
The club is owned by Zongsheng Group, which paid $13.5m for the course, including its clubhouse and development land, in 2015.
Title records show Zongsheng took out a mortgage for an undisclosed sum in December 2021, in favour of Sydney-based lender OUF Commercial.
The website for OUF said it provided commercial and bridging financing “in a hurry”.
The property had been advertised for sale by an “overseas investor looking for offers” as a potential residential development, “hotel or aged care development with free golf course”.
The advertisement said the club had plans for up to 78 homes plus a hotel or aged care facility with 100 rooms.
Listing agent Joseph Codianni, of Real Commercial Qld, declined to comment on the property’s sale.
A creditors meeting is set to be held via webinar at 2pm on June 2.
Potential buyers lining up for course
May 26, 2022: Potential buyers are already circling an embattled Gold Coast golf course, just days after it went into administration.
The Gold Coast City Council could also be interested in the site.
Arundel Hills Country Club was placed in administration on Tuesday just weeks after the Bulletin reported it had fallen into a state of disrepair and was overrun with aggressive kangaroos.
The Bulletin has learned that at least two potential buyers are interested in snapping up the once-prestigious golf course.
These include Parkwood Village managing director Luke Altschwager and family-run firm Fitzgibbon Hotels and Leisure Group.
Mr Altschwager said he was “close” to purchasing Arundel Hills in 2013 but backed out before it was sold to current owners, Zhongsheng Group.
“The lack of investment over the past 20 years has crippled it,” he said.
The passionate golfer said he was still interested in the club, but it needed to diversify its offering.
“There’s possibly a developer in the background now looking at things,” Mr Altschwager said.
“I think Gold Coast City Council should buy it and turn it into sports fields and community infrastructure and tweak the golf course – it could be a wonderful asset for the community.
“There is a real opportunity in this for the Gold Coast.”
Division 7 Councillor Ryan Bayldon-Lumsden said the course was an important wildlife corridor, particularly for koalas, and it was important for this to be preserved.
“I don’t know what the landholder’s current intent is – whether that’s to sell it or lease it out,” he said.
“There could be merit in the city acquiring it.
“The site itself is zoned for sport and recreation and it’s pretty clear the community wants to retain it for sport and recreation purposes.”
Cr Bayldon-Lumsden said he would do everything he could to ensure its current use was retained.
Fitzgibbons Hotels and Leisure Group general manager Damien Stephen confirmed the group had expressed interest in the Arundel Hills Country Club in the past and would attend next week’s creditors’ meeting.
“Given the situation the club now finds itself in, it would be inappropriate for us to comment further prior to our attendance at next week’s meeting,” he said.
Property records show Zhongsheng Group paid $13.5m for the course in 2015. It included its clubhouse and development land.
The group is still listed as the property’s owner.
An email to members from the administrator said Zhongsheng International had been ordered to vacate the property by “the lessor”.
What future holds for shuttered Coast golf course – May 25
Members and users of a popular Gold Coast golf course are calling for a new owner to step in and “save” the club after administrators were appointed.
The company behind Arundel Hills Country Club, Zhongsheng Management, was placed in external administration on Tuesday morning, with Graham Killer of Grant Thornton appointed administrator.
The property was gated off on Wednesday morning.
The club had been dogged by complaints from members about the poorly-maintained facilities, and it made headlines after a woman was injured by a kangaroo there earlier this month.
Mr Killer was not able to say how much debt the company owed.
“The administrators are currently undertaking investigations into the company’s financial position,” he told the Bulletin.
Members said the skeleton staff still left at the club were not warned about the administration before it was made public, but Mr Killer said this was incorrect.
“Employees who were on site were communicated with in person, employees who were not on site were called personally by our team, with subsequent voicemail and text messages, followed by formal correspondence via email,” he said.
Club member David Greenup renewed his annual membership just a couple of months ago for a discounted price of $2500.
“I’m disappointed, but not surprised,” Mr Greenup.
“But at the same time, hopefully it will fall into the hands of someone who cares about it.
“We have the bones of a really nice golf course, good facilities and good staff who didn’t deserve to be treated the way they did.”
Eleia Kerr’s family live in her parents’ home on the golf course and are worried about what the future holds for them.
“We don’t want it to be developed into a whole bunch of houses,” she said.
“My parents bought the house because it was a pristine piece of land on the golf course.
“We hope a lovely local business comes and buys it and returns it back to its former glory.”
Ms Kerr said staff had been subjected to “disgusting” treatment from Zhongsheng Management.
“I’ve heard all the staff received the same notice that members did and they were immediately terminated. It’s not nice for them, that’s for sure,” she said.
Parkwood resident Damon Tindall’s family regularly attended the club’s restaurant over the past five years.
“We noticed over the past two to three years, coinciding with the new ownership, that the club wasn’t being maintained with paint peeling off walls and amenities not being looked after,” he said.
“The staff always go out of their way to make it a family atmosphere, it’s just unfortunate the club has been left to decline the way it has.
“Hopefully it doesn’t become a property development. Someone should invest money into the club and make it a hub for Arundel.”
Popular Coast golf course in administration
Earlier: A popular Gold Coast golf course is in administration, with staff told by email not to return to work.
The company behind Arundel Hills Country Club, Zhongsheng Management, was placed in external administration on Tuesday morning, with Graham Killer of Grant Thornton appointed administrator.
The company had two directors when it entered administration: Yun Luo, whose home address is registered in Chengdu, China; and Yun Luo, whose home address is listed as the Arundel club house.
Property records show a company named Zhongsheng Group paid $13.5m for the course, including its clubhouse and development land, in 2015.
The group is still listed as the property’s owner.
An email to members from the administrator said Zhongsheng International had been ordered to vacate the property by “the lessor”.
“Given the financial position of the Company and the fact that the Company is required to vacate the property, we have unfortunately made the decision to close the golf course and country club, effective immediately,” the email said.
The administrator said members’ entitlements would be decided in the next 10 days and they would work with members to make a time for them to collect personal items stored at the clubhouse.
When Zhongsheng Group bought the club, a representative of the owner said they were committed to restoring the club.
“The new owner is not here to apply a lick of paint and move on,” he said.
“It’s taking the long-term view and that might well include residential development on three parcels of land.”
More Coverage
Veteran restaurateur’s three companies in liquidation
Three companies behind well-known Gold Coast restaurants are in liquidation with hefty debts – but two of the venues have stayed open under the same ownership.
What’s next for tower as builder in administration
The developer of a luxury Gold Coast apartment project has revealed what it plans to do after the shock insolvency of its builder.