Redevelopment cost weighs on club

00:00, Aug 02 2014

How times change. Five years ago the Nelson Mail reported that the Nelson Suburban Club was booming, one of New Zealand's top 10 chartered clubs. Today it's fighting to stay afloat.

There's an irony in that 2009 story - it was written because the Maitai Club on a site past the haven end of Trafalgar St was in its death throes. The paper asked why the Suburban Club was thriving while the Maitai Club was going belly up.

Now it's the Suburban Club's turn and Club Waimea in Richmond that is seeing some early benefits. The rock'n'roll club, the Sun City Rockers, has already shifted allegiance.

It's been based at the Suburban Club for all of its 14 years but president Marie Bone said the uncertainty around the future, coupled with a potential increase in charges, had tipped the scales towards a move.

"They've been very good to us over the years. The main reason we're leaving is because of the uncertainty," she said. "Things are happening where they want more money, I don't think they've been that open with everybody, really."

Bone is talking about what's been going on since September last year when the club revealed a $300,000 debt it hadn't known about, and began asking its members for money to pay it back.


General manager Neil Ross had kept it quiet, apparently not wanting club members to have to pay more, nor to offend creditors by no longer buying from them. He even subsidised some club purchases from his own pocket.

That debt, discovered by board chairman Ross Strawbridge, was owed to the Inland Revenue Department and some creditors, and a big chunk of it, $128,000, was covered by a single undisclosed member.

Ross left a few days after the debt was found, temporarily replaced by previous general manager Glen Beattie and now by Rob Finlayson, appointed before the end of the year.

It has since been disclosed that the club is struggling to service its loans of $2.7 million, tied to a major expansion in 2005 when it pursued a bold plan to become like one of the successful Australian clubs that so many Kiwis have visited and where they first heard the seductive coin cascade of the poker machines.

The plan worked well for a time. But an overall 20 per cent slide in pokie revenue and bar takings has hit the club's budget and forced it into the difficult position of having to look at imposing higher charges on the very people who are already putting less across the bar and into the slots.

That's what was being talked about at Thursday night's special meeting in the main bar.

Interested parties spoken to beforehand were united in the view that the club's closure - the worst case scenario - would leave a big hole in the social life of the district, particularly for Tahunanui and Stoke residents, many of whom are members.

As well as its own activities, the club is used by several groups, like the Sun City Rockers, which use it as a home base. It's also a popular venue for entertainment - the August calendar includes country music, karaoke and several individual performers, along with big-screen rugby nights. Touring shows like Body Heat, "an R18 all-muscle, All-male troupe from Australia" and tribute bands are put on there.

It's used for lectures, reunions, birthday parties, cards, pool, quizzes, political meetings. With the closure of the Trafalgar Centre and the School of Music, its importance as a venue has been reinforced.

Then there's the Returned and Services Association - more than 600 people who transferred from the failing Maitai Club in early 2009 and have their membership of the Suburban Club paid by a capitation fee of $35 a year, taken from an overall RSA membership fee of $65, waived or reduced for certain classes of membership.

By comparison, direct membership of the Suburban Club is $45 a year ($40 for seniors) or $80 for a family ($70 a senior family).

While some individuals spoken to by the Mail say they will consider what any extra levies might be before deciding to walk or stick, the RSA is prepared to move on and has a "plan B", president Barry Pont said.

"There are alternatives in the Stoke-Tahuna area, where we want to stay. We have told them that we won't pay any more."

Like others, Pont said scant financial information had been given out: "The board says they feel that we don't need to know."

But he doesn't blame the board for the club's plight. Having seen for himself the declining pokie patronage, he said that all clubs, both in New Zealand and Australia, relied too much on profits from the machines.

"When you have a big decline, it really hits them hard."

Nine years ago when the club borrowed to expand, "things were booming", Pont said, but since then times had got tougher and "they never paid any capital off, only the interest".

"There's a day of reckoning, unfortunately."

However the Club was an excellent venue and the RSA hoped it could be sold, lease back the premises, and carry on.

(In fact at a special meeting on Thursday night, 400 club members voted to pursue the option of a $100 levy per member for the next five years.)

"We don't want to leave," Pont said. "This is why we've stayed as long as we can - we're hoping they'll pull through."

The Internal Affairs Department has supplied figures showing that the Suburban Club took in $641,656 from its 18 pokies in the year to July 31 2013, leaving it $338,543 for "club purposes" after the deduction of tax and the problem gambling levy. Club Waimea, also with 18 machines, retained $140,160 from proceeds of $279,862 in its financial year ending on January 31, 2014.

Neville Male wears three hats in this discussion - president of Nelson Grey Power, which uses the club for its public meetings, regular lawn bowler who goes there afterwards to socialise, and club member.

He has noticed a contrast between jackpot nights, when members can win $2500 or more in a draw, and other nights, highlighting the lack of regular support from the big membership.

"On jackpot night you can't get a carpark, it's standing room only and you suddenly see what the strength of the membership is. Once the jackpot's been drawn you could fire a shotgun in there and you wouldn't hit anyone."

On other nights like when he goes there with his mates after a bowls game, "you'd be lucky to find 30 or 40 people in the place".

But like everyone else the Mail spoke to, he wants the club to live on.

"It would be a tragedy to see that facility close down because it is such a good one, and it's doing such a good job of serving that Stoke-Tahunanui community," Male said.

"They've done quite a reasonable job in trying to replicate that type of Aussie club approach, but I think in terms of what the rebuilding cost them, they might have been a bit optimistic at the time."


❏ Began in 1970 with a licence for 600 members, 50 of whom had to be women. It had a joining fee of $2 and annual membership of $3, and opened with a waiting list of 300.

❏ Began at the former Zip factory site on Tahunanui Dr, which it still occupies. The original three-year-lease was renewable every two years, but it now owns the land and buildings.

❏ Today is modelled on similar clubs in Australia, with a members' bar that can seat more than 200, two restaurants, a pool playing area, function rooms, a self-service TAB outlet and a gaming room with 18 poker machines, decorated with 5000 laser lights.

❏ Is an incorporated society and operates as a chartered club, licensed by the Licensing Control Commission. ❏ Under the terms of its constitution, can set extra levies and include them in the annual subscription.

❏ Can be wound up if members choose, with any proceeds after the settlement of debt to be donated to charity.

The Nelson Mail