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Maclean Services Club’s fate decided on June 1

Whether or not Maclean RSL Sub Branch members will accept a $1.3million offer to purchase the Maclean Services Club (MSC) building will be known on Monday June 1.

The sealed votes of the sub branch’s 125 financial members will be opened and counted while a justice of the peace (JP) oversees the process.

The sub branch’s president, Steven Walton, said he regretted details of the offer being made public.

“It was a private communication to our members,” he said, “but these things leak out and I regret that, in relation to the potential purchaser.”

The sub branch put the building on the market following a vote in April 2019 – 78 per cent of members present at that meeting voted in favour of the sale.

Meanwhile, a dispute between the building’s leaseholder (MSC) and the building’s owner (the sub branch) has been simmering in the background – it came to a head when the MSC’s board of directors distributed a “response” (dated May 14) to its members, challenging the sub branch’s decision to sell the building.

The services club lease expires on April 22, 2022.

“Many of you would be aware of the recent development where the Maclean Sub-Branch is seeking member approval to sell the Club premises to a different company and force the Club out of the building,” the services club’s executive officer, Stephen Fraser, writes.

The Maclean Chamber of Commerce distributed the letter to its members, too, writing that Mr Fraser had requested that it be distributed “for the information of as many people in the Maclean District Community as possible”.

“The RSL Club and the many Community services it provides needs our help to ensure it survives and flourishes into the future,” the chamber’s secretary writes.

“…Let’s get behind [MSC] and hope that a solution can be found.”

In the board-endorsed letter, Mr Fraser cites a clause he “found in older documents about your club” that recalls “donations from the sugar cane farmers to build the area where we are sitting and issued debentures to the people of Maclean to turn the top section into a club”.

“Everything that you see comes from the efforts of these people and we as directors of the club and sub-branch members have a duty to fight for its existence,” Mr Fraser implores.

“How things have changed!

“The Club building is now up for sale by the Maclean Sub-Branch to the highest bidder.

“No loyalty to the club, which has paid considerable rent for the property for so many years, investing in the facilities, replacing decor, structural additions, all paid for by the Club … your Club.”

Mr Fraser writes that the MSC will “make a serious and competitive offer for purchase” and asks sub branch members to “just say no” to the offer.

However, he also writes that “there are plenty of issues related to this property that need to be considered before such an offer can be made”.

Mr Fraser lists MSC’s issues regarding the building’s defects and “a lot of poor decisions made [by the sub branch] over the years”; and writes that MSC has “supported [the sub branch] over many years, [which] now wants to take the money and run”.

The sub branch’s president, Steven Walton, feared Mr Fraser’s letter was “pressuring sub-branch members to reject a third party offer to buy the property”.

Mr Walton said the sub branch had decided to sell the building “because our main purpose as a charity is to support veterans”.

“It’s an aging building requiring ongoing maintenance,” he said. “If we took out a loan for maintenance, we might be stuck with the loan if the services club goes under.

“The club already pays a substantially discounted rent, locked in until 2022, and further sub-branch investment in the property puts charitable funds at risk, given the [MSC’s] history of operating losses.

“The club has had more than 12 months to make a competitive offer for the property and has failed to do so.

“Having made the decision to sell, the sub-branch is obliged to act on the offer in hand and, in fairness to all parties, this process will not be allowed to drag on.

“All proceeds from the sale will be held in trust by the sub-branch and invested for the long-term benefit of Maclean’s ex-servicemen and women.”

Publically available audits of the club show it has traded at an $187,386 loss over the past three years – 2017: $4618, 2018: $54,443 and 2019: $128,325.

However, Mr Fraser said the “audits were cash positive and it was depreciation that made for negative results”.

Depreciation and amortisation expenses are listed as: 2017: $131,707, 2018: $130,485 and 2019: $139,131.

Mr Walton pointed out that the “sub-branch signed a 5×5 year lease in 2012 that reduced the club’s rent by 36 percent or $25,000 per year, to ensure its viability”.

“Since then rent has automatically increased based on the CPI and, this year, that increase was $15 per week,” he said.

 

Part 2 of this article by Geoff Helisma:

What RSL NSW thinks about the Maclean Services Club dispute

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