ATC out of the woods or 4 months life left?

[Chief Stipe]

Crippling interest payments threaten Auckland Harness Racing

harnesslink.com

The ATC’s financial future was destroyed when the first two apartment complexes built at Alexandra Park encountered enormous issues and losses, the fallout from which still continues.

The ATC found itself owing over $120m although that amount was almost halved by the sale of remaining land at Alexandra Park, which will now be developed by its new owners.

The ATC has a contract to sell the Franklin Park Training Centre in Pukekohe for $100m, with the Chinese-based company who is buying it having already paid its $10m deposit.

The remaining $90m is due for payment on November 8, just days before Cup week in Christchurch and it can’t come soon enough for the ATC.

ATC president Jamie MacKinnon revealed to the Herald this week the club is paying $115,000 interest a week on its outstanding loans and when the $90m is paid and it clears its debts the ATC will have little more than $10m left.

That is, sadly, its only cash uplift after selling all the property it can while still retaining Alexandra Park as a race track.

Whether that affects the size or quality of the training centre the ATC is committed to building remains to be seen but the numbers make depressing reading, although without an understanding bank and some astute legal assistance the damage could have been terminal.

Alexandra Park came far closer to closing than most in the industry will ever know and that would have been disastrous for harness racing in New Zealand, meaning the code wouldn’t have had a presence in New Zealand’s two biggest cities after Hutt Park near Wellington closed in 2002.

With that threat seemingly behind the ATC, the future strategic battles loom larger.

“The interest payments have been brutal and are really cutting into how much money we will be left with,” admits MacKinnon.

“We originally thought after the sale of Franklin Park we would have over $20m left but that number is now more like $10m.”

While the club could soon be out of debt that may not last long as it is committed to building a new training centre to replace Franklin Park.

“The developer who is buying it has agreed to a two-year lease back to us so we have two years from November, all going well, to have a new training centre,” says MacKinnon.

“We have looked very hard at three different places and the one that is most favoured at the moment is in Maramarua.

“We also need to talk more to Harness Racing New Zealand about how much they can contribute to it because we don’t believe we should be the only club in the country who has to build a training centre to keep racing going up here.

“Obviously we are looking forward to the money coming through as the interest we have been paying for a long time now is quite stifling.”

The mega money stuff up aside, the ATC now faces a less important but still challenging problem of how to draw enough horses to race there almost every Friday next season.

It will be aided by Cambridge having most of its meetings moved to Tuesdays but MacKinnon says for Alexandra Park to be able to fill fields it will look to programme more sprint and 2200m races.

“We like holding 2700m races but we believe horses are more likely to back up the next week if they race in sprints or up to 2200m races so we will be programming more of those.”

by Michael Guerin, for the NZ Herald

[Brodie]

1 hour ago, Chief Stipe said:

Crippling interest payments threaten Auckland Harness Racing

harnesslink.com

The ATC’s financial future was destroyed when the first two apartment complexes built at Alexandra Park encountered enormous issues and losses, the fallout from which still continues.

The ATC found itself owing over $120m although that amount was almost halved by the sale of remaining land at Alexandra Park, which will now be developed by its new owners.

The ATC has a contract to sell the Franklin Park Training Centre in Pukekohe for $100m, with the Chinese-based company who is buying it having already paid its $10m deposit.

The remaining $90m is due for payment on November 8, just days before Cup week in Christchurch and it can’t come soon enough for the ATC.

ATC president Jamie MacKinnon revealed to the Herald this week the club is paying $115,000 interest a week on its outstanding loans and when the $90m is paid and it clears its debts the ATC will have little more than $10m left.

That is, sadly, its only cash uplift after selling all the property it can while still retaining Alexandra Park as a race track.

Whether that affects the size or quality of the training centre the ATC is committed to building remains to be seen but the numbers make depressing reading, although without an understanding bank and some astute legal assistance the damage could have been terminal.

Alexandra Park came far closer to closing than most in the industry will ever know and that would have been disastrous for harness racing in New Zealand, meaning the code wouldn’t have had a presence in New Zealand’s two biggest cities after Hutt Park near Wellington closed in 2002.

With that threat seemingly behind the ATC, the future strategic battles loom larger.

“The interest payments have been brutal and are really cutting into how much money we will be left with,” admits MacKinnon.

“We originally thought after the sale of Franklin Park we would have over $20m left but that number is now more like $10m.”

While the club could soon be out of debt that may not last long as it is committed to building a new training centre to replace Franklin Park.

“The developer who is buying it has agreed to a two-year lease back to us so we have two years from November, all going well, to have a new training centre,” says MacKinnon.

“We have looked very hard at three different places and the one that is most favoured at the moment is in Maramarua.

“We also need to talk more to Harness Racing New Zealand about how much they can contribute to it because we don’t believe we should be the only club in the country who has to build a training centre to keep racing going up here.

“Obviously we are looking forward to the money coming through as the interest we have been paying for a long time now is quite stifling.”

The mega money stuff up aside, the ATC now faces a less important but still challenging problem of how to draw enough horses to race there almost every Friday next season.

It will be aided by Cambridge having most of its meetings moved to Tuesdays but MacKinnon says for Alexandra Park to be able to fill fields it will look to programme more sprint and 2200m races.

“We like holding 2700m races but we believe horses are more likely to back up the next week if they race in sprints or up to 2200m races so we will be programming more of those.”

by Michael Guerin, for the NZ Herald

What a total stuff up and they want to be continued to be bailed out with more millions to rebuild?

Unfortunately you can not keep putting plasters on and they are toast!

There will never be enough horses in Auckland to be able to run profitable race meetings and Entain throwing the money into their stakes just shows how poor Entains decision making is, but they have a plan!

Who is it now that has no idea of finances that is running ATC currently?

 

 

[NZRacing]

fROM

[NZRacing]

From ATC Annual Report last year.

Quote

As at the date of writing this report, the club is just now awaiting the Environment Court’s sealing of the agreement reached at the mediation in July. Once that is done Mt Hope is due to then declare the contract unconditional and pay the balance of the deposit. The Board is hopeful that by the time the AGM occurs the contract will be unconditional.

Herald quotes that the remaining $90m is due for payment on November 8

That above quote's a year ago. Apparently re-zoning was consented to a while ago. Environment Court’s sealing of the agreement reached at the mediation in July 2023. So the ATC continue to pay millions in interest until supposably November. Something doesn't add up in this deal. ATC reports that is was a Chinese based Company but Mt Hope is a NZ based Company. They won't have $10 million in the bank if and when the deal goes through, more like a deficit of $10,000,000.

The Auckland Trotting Club has wiped out property like a tsunami eg old stand at Alex Park, Petrol and Burger King land, loss on apartment building. Apparently they also lost the Employment case against the previous oncourse TAB manager, so there will be a few hundred million gone west they were confident of winning.

Worst run Club in NZ ever. Hard to see them surviving.

ANNUAL-REPORT-2023-SOFT-COPY.pdf (cloudcdn.nz)

Edited July 13 by NZRacing

[Brodie]

1 hour ago, NZRacing said:

From ATC Annual Report last year.

Herald quotes that the remaining $90m is due for payment on November 8

That above quote's a year ago. Apparently re-zoning was consented to a while ago. Environment Court’s sealing of the agreement reached at the mediation in July 2023. So the ATC continue to pay millions in interest until supposably November. Something doesn't add up in this deal. ATC reports that is was a Chinese based Company but Mt Hope is a NZ based Company. They won't have $10 million in the bank if and when the deal goes through, more like a deficit of $10,000,000.

The Auckland Trotting Club has wiped out property like a tsunami eg old stand at Alex Park, Petrol and Burger King land, loss on apartment building. Apparently they also lost the Employment case against the previous oncourse TAB manager, so there will be a few hundred million gone west they were confident of winning.

Worst run Club in NZ ever. Hard to see them surviving.

ANNUAL-REPORT-2023-SOFT-COPY.pdf (cloudcdn.nz)

You are correct, they have been totally mismanaged for years, and no they will not survive despite several trying to talk-it up.

They will never have enough horses to run profitable meetings as the costs are too high and Aucklanders have other issues on their minds.

Entain are chucking the money into Auckland as that is what they said they will do, so it is  no worry to them.

The Reidman even looks like he is heading to Canterbury as he can see the writing on wall in Auckland.

Ray Green will finish up shortly and there will only be Stonewall racing abainst each other and very few others.

The turnover for Auckland must be terrible as the racing they are offering is very mediocre!

[Slippery Slope]

Some of the most depressing and concerning things about all this is that:

1. HRNZ will have or should have known all this when they supported both publicly and to the extent of $ millions of industry funds being taken out of Crusaders country betting revenue each and every year to fund Alexandra Park stakes. They are the controlling body for the industry and they surely have the right (and indeed obligation)  to be all over the financial position of the ATC like a rash, and to thus explain why this doesn't seem to worry them.  

2, HRNZ committed to all of this again publicly for the next 3 years (rather than 3 months!) BEFORE November's property settlement outcome is known. So no certainty as of today that they aren't putting all our industry money down the drain until that settlement outcome is known, whilst at the same time also prematurely relegating Cambridge who have challenges of their own to low class racing on Tuesday with very little hope of their turnover recovering the cost of stakes subsidies, and treating the arguably more strategically important Waikato harness racing community with disdain in terms of being able to maintain let alone grow owner support there. 

3. The now publicly announced this week lobby from the ATC to unbelievably want even more of the $ millions of surplus revenue that Crusaders country harness racing generates , to fund a training venue they probably can't afford, to replace the one they sold off !!

Sorry HRNZ, but this has the potential to be an incredibly embarassing few months for our code, and the treatment of owners and trainers in the South Island, and probably Cambridge as well,  who are supporting this whole exercise with their money. Doesn't doing so in advance of the Auckland Trotting Club being able to prove to all of us that it is in fact a going concern disrespect us all?

I'm looking forward to HRNZ recovering its commitment to being transparent on when / how you will report progress with "the Future starts now" within the next 3 to 6 months. Especially to tell us how we are doing on turnover/ betting revenue being earned with the new strategy vs stakes paid and the reality vs the spin of the situation in Auckland and the Waikato, and what that is costing the rest of the industry as an investment for the future. Please don't think keeping us in the dark for 3 years is in your and our interest.  

    

[Doomed]

I found the comment that they shouldn't have to be the only club in the country to have to build a training centre, and therefore wanting the rest of the country to subsidise them, to be very strange.

Surely they already had a perfectly adequate training centre close at hand and chose to sell it off? Where do they think the SI clubs do their training and who do they think pays for it. Ashburton, Oamaru, Timaru, the southland clubs, all provide facilities for their local trainers. The codes have tried to close down Waimate and Waikouaitit and various others but are still happy for them to provide training facilities. Blenheim has been reduced to one two day meeting a year but still provides training facilities for anyone interested. I don't think they would be too keen to subsidise Auckland.

I'm sure the many SI clubs that provide training facilities but only get to race once or twice a year would be happy to put on some extra days if the current Auckland dates became available.

It wouldn't surprise me if the Nelson Trotting Club was happy to put on a charity raceday to help out Auck. They only need to ask nicely.