Collingwood struggling to sell Beach Hotel in Albert park

EDDIE McGuire's Magpies are headed for further financial strife with the collapse of a deal to sell the Beach Hotel in Albert Park.

Beach Hotel in Albert Park. Picture: George Salpigtidis

EDDIE McGuire's Magpies are headed for further financial strife with the collapse of a deal to sell their white elephant Beach Hotel in Albert Park.

The Pies were clinging to hope that the sale would proceed, but industry sources said it was dead in the water after the property's freehold owners blocked it.

Collingwood chief executive Gary Pert said the club was prepared to take legal action to get the deal over the line.

"If we can't come up with a quick solution, we've already booked in to meet at VCAT to resolve the issue," he told the Herald Sun.

"I can confirm that the freehold owners have not con-sented, yet all the other approvals are through."

Collingwood's desperate bid to sell the Diamond Creek Tavern has also stalled after prospective buyer Rick Munday declared he was getting out of the pub game.

The Magpies, who have already lost more than $8 million on the two ventures, are banking on the sales to help repay the $10.25 million they owe Westpac.

The club's accounts show the Pies hoped to repay the bank $7.25 million by the end of the year, but the repayment is believed to be linked to the hotel sales.

Pert told club members in December the sale of the hotels was all but a done deal.

Compounding Collingwood's woes, police are pushing ahead with court action against the Pies stemming from a series of licence breaches at the Beach Hotel.

A worse-case scenario would see the members of the club's board stripped of their right to own and operate pubs and pokies.

The Magpies have engaged leading lawyer David Galbally, QC, to help fight the case.

Former Bracks government adviser Sharon McCrohan is also working for the club in a consultancy role.

Collingwood bought the leaseholds on the Beach Hotel and Diamond Creek Tavern for $14.5 million in late 2006 and spent another $1 million on upgrades.

The club has already written off giant losses on the pubs, downgrading their combined value to $9.5 million in last year's annual report.

But the Herald Sun has been told the Pies had agreed to sell the Beach Hotel for just $2.5 million to the Gauci Group - $4.5 million less than the $7 million it paid three years ago.

The terms of the sale were declared unsatisfactory by the building's owners, pub industry veterans the Board family.

McGuire has previously admitted the purchase of the two hotels was a "bad decision".