Last post for the RSA

BY ROB MAETZIG

The Last Post has sounded for the battle-scarred New Plymouth RSA club.

Under orders from its national executive, the debt-plagued club which has proudly served old soldiers and their families for more than 90 years ceased trading at midnight on Monday.

It now looks extremely unlikely the Devon St East clubrooms will re-open – and already, fellow chartered club the New Plymouth Club has taken over, offering all 1000 RSA members full access to its Gill St premises.

The sudden closure follows an investigation into the club's finances by the RSA national office with assistance from management of Wanganui RSA.

This culminated in an emergency club executive meeting on Monday night, attended by representatives from Wellington and Wanganui, where it was decided to immediately cease trading.

Long-time member and acting club vice-president Robbie Galvin said national headquarters representatives at Monday's meeting said the RSA couldn't possibly trade its way out of worsening financial circumstances.

"It's bloody sad. Our membership includes a large number of widows and widowers, and the RSA is their whole life," he said.

Bar manager Sharon Erueti – who has lost her job – said she feels for the older members.

"Many of them don't have any other family, and this is where they come to socialise.

"They also like to do exactly the same thing every week – like cards every Mondays and Fridays – so this closure is really going to hurt.

"If they can't come here, where will they go?"

New Zealand RSA chief executive Stephen Clarke, who was at the meeting, yesterday said the investigation showed the New Plymouth organisation was in deep financial trouble.

"Our research showed that the club made a bit of a return in January, but it was too little too late," he said.

"The cold reality is that the club has been struggling financially for at least the past five years. Unfortunately, the meeting was the end game of a number of years. The club needed to stop trading."

Dr Clarke said it was important that this week's closure of the RSA clubrooms did not mean the end of the Returned Services Association in New Plymouth.

"The RSA is still a viable organisation – and it has to be remembered that more than a third of all RSAs in New Zealand don't have clubrooms.

"It's going to be all about ensuring the RSA continues to have a presence – that it remains a guardian of remembrance of the war effort," he said.

Closure of the clubrooms came after a series of financial crises at the New Plymouth RSA in recent years.

The Taranaki Daily News revealed on Saturday that the club had incurred operating losses of $530,000 in the three years up to 2007.

It also owed $736,000 to its welfare arm, among other debts.

Two years ago it seemed the club's troubles would be over when it sold its Devon St East land and building to businessmen brothers Steve and David Crow for $1.9 million, who took over the management of the operation.

The purchase arrangement saw the Crows pay a $375,000 deposit to the RSA, with the remaining $1.525m becoming a second mortgage provided as vendor finance by the RSA, payable in five years.

But the relationship quickly fell apart after the brothers stepped in as managers in August 2008 and immediately began to clash with the New Plymouth executive over various management techniques and changes. The club reverted to managing the operation itself, and has since refused to accept revised partnership proposals from the Crows that would have entailed the brothers taking over the running of the entire building, and releasing the club from the lease of the clubrooms.

It would also have released the club from another contract that binds the club the buy back part of the building once it has been renovated by the Crow brothers.

Even at Monday night's meeting – and after it had voted to close the clubrooms – the club's executive once again voted to reject any partnership with the Crow brothers. Yesterday, Steve Crow said the club executive had made the right decision to close its doors. "The club had been trading insolvent. The executive would have been risking being responsible for the debt," he said, adding that he was "really sad" that during the time he and his brother had managed the club's operations, it had moved back into profitability. "That was as recently as October. And then the club terminated the management contract, and it has gone quite dramatically backwards ever since."

Mr Crow said he hoped the club would now meet members, creditors and he and his brother as landlords, and find a means of moving forward and hopefully re-open the clubroom.

"Our interest is the old diggers. I'm sure we can offer them something better at the same home." The Nosh Restaurant, which is part of the Te Ara Lodge complex now owned by the Crows, is not affected by the closure and continues to trade.

- © Fairfax NZ News