South County GC Closed

Jacket111001

It doesn't add up.

Blue for Ever

If you have ever been to a hotel liquidation sale they sell everything from carpets to light fittings to wood panelling. They could foreseeable sell grass surfaces, irrigation system, pumps, sand greens and anything else that wasn't there before the golf course was built. My advice is to talk to the liquidator ASAP

GreeBo

one ill cat wrote: »

The running costs are not €1 million. It was costing approx €300k to maintain the course, approx €150k in rent to the landlord and €60k on interest to the bank. There are obv utility bills outside of that as well as staffing & restaurant, but then I guess that's up to the Kavanaghs of how much 'extras' they want to have.

Obv they won't be charging themselves rent & there won't be debit interest to be paid to the bank.

Why wouldnt they charge rent? How else do you think they are going to make any money from their land? Im guessing they are not running a golf club for the good of your health. Bloody sure they will be paying themselves rent and possibly a salary on top. Why else would they want the club?

Is there still an option that the liquidator would sell the whole place off as a golf club and someone else comes in and takes over and rents from the Kavanaghs?
Why are they automatically in charge now?

carman2011

AldilaMan wrote: »

It's highly unlikely that 500 members will cough up €150 each (or the DD equivalent for those paying by DD). Those that paid up front will certainly consider it as they will see their investment for the rest of the year gone. Those on DD will take a long hard look and not having lost any more than 1 month's payment may leave. If the projected income from the levy falls short you might well see a scenario where they're coming back in 3 months looking for another €150.

This is like buying shares where you see the price fall and decide to average down by buying some more shares. If the price of the shares fall further then you've lost more money and not saved any.

I personally would want some assurances that the golf club would continue till at least the end of this year and without recourse to the members for a further levy before parting with any more cash.

why would they leave, when they can stay for 70 per month, which is less than their previous dd was, its a risk free chance to stay, see how it pans out, on what i presume was their 1st choice course in the 1st place, given they joined originally and were willing to pay more than they now have to.

If it doesnt work out well, or the kavanghs increase the fees next year, then they can consider leaving, with nothing lost.

The kavanaghs are now the ones taking the risk. As everyone is on dd, no one can lose more than 70 euro even if they close the doors again at some point.

You wont get a better course in the area for 70 euro a month......

carman2011

GreeBo wrote: »

Why wouldnt they charge rent? How else do you think they are going to make any money from their land? Im guessing they are not running a golf club for the good of your health. Bloody sure they will be paying themselves rent and possibly a salary on top. Why else would they want the club?

Is there still an option that the liquidator would sell the whole place off as a golf club and someone else comes in and takes over and rents from the Kavanaghs?
Why are they automatically in charge now?

liquidator cant do this as Kavanaghs own the lease on the land.

carman2011

Blue for Ever wrote: »

If you have ever been to a hotel liquidation sale they sell everything from carpets to light fittings to wood panelling. They could foreseeable sell grass surfaces, irrigation system, pumps, sand greens and anything else that wasn't there before the golf course was built. My advice is to talk to the liquidator ASAP

they could, but this is not in the interest of any members, they will still be no funds for shareholders, as there will be bottom of the list of people to get repaid.

all this will do is ensure no one gets golf, and the revenue/banks gets paid.

this will only happen if most members vote to veto the directors choice of liquidator, as i previously said, which would be the wrong thing for them to do in their interests going forward.

people dont seem to realise that the directors etc can appoint their own liquidator, who may not be hostile. This gets voted on by all creditors, including the kavanaghs who are owed rent and the shareholders.

carman2011

GreeBo wrote: »

Why wouldnt they charge rent? How else do you think they are going to make any money from their land? Im guessing they are not running a golf club for the good of your health. Bloody sure they will be paying themselves rent and possibly a salary on top. Why else would they want the club?

Is there still an option that the liquidator would sell the whole place off as a golf club and someone else comes in and takes over and rents from the Kavanaghs?
Why are they automatically in charge now?

as the kavanaghs will own the facility going forward, they would effectively be charging themselves rent !

they will make their money from subs, green fees etc, instead of rent.
they will have a much lower cost base than the previous company in liquidation, as this had huge loans to bank and revenue built up in the past, and have to finance these from revenue every year.
The kavanaghs will not owe revenue anything from the start, nor will they have huge bank loans to finance.

Jacket111001

Carmen.
The liquidator doesn't care about the members interests.
He works for the creditors.

This is the same sort of logic that has us here in the first place.

Russman

carman2011 wrote: »

as the kavanaghs will own the facility going forward, they would effectively be charging themselves rent !

I'd imagine you'll find there will be a separate vehicle set up and this is the entity that will be charged rent - its not the slightest bit unusual. eg company directors owning the office and charging the company they own, rent.

Ultimately a liquidator isn't going to be hostile or friendly, there's no such thing in these matters usually - he's there to get what he can for the creditors. He has no interest in anything as a "going concern" as the business he's dealing with has, by definition, passed that point.
Obviously the landlords are creditors too but they are only one out of a group, some of whom have to be paid before them.
I know a bank doesn't want a parcel of land thats essentially useless to them, but neither will a bank agree to give the security on their loan to another creditor.

I'm sorry for seeming negative about all this, I hope SCGC gets sorted but its seems to me that a lot of things need to happen and the stars need to line up just the right way, based on the reports so far.

shamco

Jacket111001 wrote: »

Carmen.
The liquidator doesn't care about the members interests.
He works for the creditors.

This is the same sort of logic that has us here in the first place.

There is a lot of speculation going on in this forum about liquidators, creditors etc. The simple fact is that nobody knows whats going to happen until he is appointed. Having attended the meeting last night and seen the proposal it looks like a great deal to me.If things work out I will certainly be giving it a go as there is no risk and you get to play a great course for half the price I paid previously.

matt-dublin

@ greebo, there's no benefit to themselves to charge themselves rent unless they're planning on running the club as a completely separate entity to what they currently are.

it would be more beneficial for them to absorb the club and take any profit and turnover into their own accounts.

this way they would get the rent as well as any profit from the club.

GreeBo

carman2011 wrote: »

as the kavanaghs will own the facility going forward, they would effectively be charging themselves rent !

they will make their money from subs, green fees etc, instead of rent.
they will have a much lower cost base than the previous company in liquidation, as this had huge loans to bank and revenue built up in the past, and have to finance these from revenue every year.
The kavanaghs will not owe revenue anything from the start, nor will they have huge bank loans to finance.

This income will go directly to pay off the expenditure. Thats why clubs are not designed to make money, they have Income & Expenditure rather than Profit and Loss statements.

A golf club is a very expensive thing to run, to run it trying to make a profit has been shown to be not so possible in this economy --> NAMA clubs.
Members clubs that are not trying to turn a profit, just continue to exist are of course going to fare much better. Members clubs try to be as cheap as possible for their members, the people making the decisions are members. For profit clubs/companies try to make as much money as possible for their owners.

You can be damn sure that any new owner will be taking out rent + salaries otherwise why on earth would they be taking it over?

What are you basing your bolded statement on?
I think you mean that the new South County "entity" wont have the finance issues that the last one had, however this doesnt mean that whomever takes it over wont have their own financial difficulties and that they wont extract every last penny out of SCC for as long as possible to try to alleviate these difficulties, leaving you in exactly the same position.

This is the difference between a company and a club.

GreeBo

matt-dublin wrote: »

@ greebo, there's no benefit to themselves to charge themselves rent unless they're planning on running the club as a completely separate entity to what they currently are.

it would be more beneficial for them to absorb the club and take any profit and turnover into their own accounts.

this way they would get the rent as well as any profit from the club.

See Russmans answer. They would run it as a separate entity to insulate themselves against any future liability to themselves or existing businesses in the event the club fails again. Otherwise they could have their land sold by a liquidator in 12 months time.

Anyway, When the owner owns the land, any money saved through not paying rent is just rent under another name.

Also I'm not sure where you think these profits are going to come from? The last versions of SC havent been successful, why now?

matt-dublin

Greebo,

you'll be surprised what may happen for the first few years, until the economy stabilises it will be cheap with a small margin of profitiablilty but when the demand comes back is when things will change.

GreeBo

matt-dublin wrote: »

Greebo,

you'll be surprised what may happen for the first few years, until the economy stabilises it will be cheap with a small margin of profitiablilty but when the demand comes back is when things will change.

How can it be cheap and make a profit and yet be of the same quality so that people are willing to pay?

The only way to save meaningful money in a golf course is cut back on wages and/or course maintenance.

Either of these are going to have a detrimental impact to the viability of the course. Especially cutting back on greenkeepers. Cutting all the fairways and greens and practice areas every day takes a lot of time and a lot of money and this is the absolute minimum that needs to be done.


/edit
Where is the demand coming back from?

AldilaMan

matt-dublin wrote: »

Greebo,

you'll be surprised what may happen for the first few years, until the economy stabilises it will be cheap with a small margin of profitiablilty but when the demand comes back is when things will change.

That's like saying when my house is worth €500k again. Not in my lifetime. We're not going back to the Celtic Tiger.

gboru

I was at the meeting last night and it was great to see a group of people rally around like that. However, I have been doing some quick maths:

1. It takes approx 600-700k annually to run a golf club assuming a 'good' standard of maintenance, having a professional and having a half decent bar/restaurant. This includes all salaries i.e. a proper golf 'club'.
2. Lets assume that the landlords also want a return of 100k per annum. They were hoping for 150k based on the current lease.
3. This means an annual cost to the members of lets say 750k. If you divide this by 500 it means the annual sub will need to be 1,500 per member.
4. If the landlords intend to charge 1200 then they need 625 full time 7 day members.
5. Or they have 400 members at 1200 plus try and sell 250k-300k in green fees and societies.

Either way, it is doable if they get the mix and membership levels right. But for any fees between 1200 and 1500 they have to run a 'proper golf club' and invest in the course and the facilities. The big question is will they do this? My assumption is that when we voted last night we were voting for a proper golf club (maybe not this year but definitely next), run properly and not a cheap as chips, pay and play, poorly maintained course.

Assuming they can generate 250k for the rest of the year (70 per month for 300 members plus casual golf fees) it seems they will have to put their hands in their pockets and invest for next year?

Also, having spoken to ex board members today, the legal position of who owns the buildings is likely to be a major issue as the buildings are on the landowners land but will be 'owned' by the bank as they have security on them. It is debatable who will ultimately win that battle. A settlement between the landowners is the most likely outcome but the landowners will likely have to pay something for it. However, any liquidator is also going to want to strip the buildings clean and sell off what they can - unless the landowners make an offer for it? More investment by the landowners needed then?

I am having my doubts about the long term prospects of a proper club at SC but will take the excellent deal to maintain my h'cap this year, play the course etc. at 70 per month.

matt-dublin

I would suggest to retain memebership you will find the course will be run at a basic level to keep it ticking over.

you will find that the quality will fall down and so will the price of annual membership next calendar year.

i'd be very surprised if they they cut the grass out there more than once or twice a week going forwards to reduce cost.

Demand on golf will come back, once the economy comes back, Im not sayin that its giong to go towards what it was like back in the celtic tiger era, but there are a lot of clubs out there that have little or no debt, that were never involved in nama and are still seaking thousands of euro for Joining.

they've already said they won't be running a bar at the moment so i would expect staffing levels to be very low.

If anything it would be in their interest to have a third party run the bar at their own expense with low or free rent on the utility thus reducing the overheads of the club

tiger14ki

5year member of south county. Was at the meeting last night and was at least goodto see that an offer is on the table from the landlords, even if it is questionable what the long term prospects are.

I know myself that if the club has a chance of going forward then I will be a part of it at the initial reduced fee and fully expect to have to pay a higher monthly dd next year. Much as I think Raymie is a legend, or that Jim was a cracking greens keeper or that Noel made great food, all I want is to play that course because it is bloody great.as long as it is kept in semi decent condition for the rest of the year while we try get back on our feet, I could care less about the clubhouse. Pat Kavanagh can run it from a portakabin as long as I and the rest of the guys can play golf on the best course in the area at a knockdown price for 7 months.

If we can get it up and running, and the grass cut and the greens roll fairly true then new members will come and there would be plenty of casual and society interest also.

Liquidator may kick out pat Kavanagh from the clubhouse but he could run the course from a hut, he may sell the kitchen equipment depending on no owned it, but there is very little they have to play with as the clubhouse is landlocked so how much would he get for it off Kavanagh?

Too many questions but at least 99% of the membership at south county meeting last night voted to go ahed with kavanaghs proposal.its a start

vikingdub

tiger14ki wrote: »

. Pat Kavanagh can run it from a portakabin as long as I and the rest of the guys can play golf on the best course in the area

That is what we had at the start before the clubhouse was built.

GreeBo

matt-dublin wrote: »

i'd be very surprised if they they cut the grass out there more than once or twice a week going forwards to reduce costs

seriously? Grass on the greens will double in length in 2 days in summer...best of luck putting and getting green fees.

sodbuster77

tiger14ki wrote: »

5year member of south county. Was at the meeting last night and was at least goodto see that an offer is on the table from the landlords, even if it is questionable what the long term prospects are.

I know myself that if the club has a chance of going forward then I will be a part of it at the initial reduced fee and fully expect to have to pay a higher monthly dd next year. Much as I think Raymie is a legend, or that Jim was a cracking greens keeper or that Noel made great food, all I want is to play that course because it is bloody great.as long as it is kept in semi decent condition for the rest of the year while we try get back on our feet, I could care less about the clubhouse. Pat Kavanagh can run it from a portakabin as long as I and the rest of the guys can play golf on the best course in the area at a knockdown price for 7 months.

If we can get it up and running, and the grass cut and the greens roll fairly true then new members will come and there would be plenty of casual and society interest also.

Liquidator may kick out pat Kavanagh from the clubhouse but he could run the course from a hut, he may sell the kitchen equipment depending on no owned it, but there is very little they have to play with as the clubhouse is landlocked so how much would he get for it off Kavanagh?

Too many questions but at least 99% of the membership at south county meeting last night voted to go ahed with kavanaghs proposal.its a start

It will be hard to attract societies with no bar or restaurant

frost53

:pac:

GreeBo wrote: »

seriously? Grass on the greens will double in length in 2 days in summer...best of luck putting and getting green fees.

Get over it GreeBo....SC is back

shamco

GreeBo wrote: »

How can it be cheap and make a profit and yet be of the same quality so that people are willing to pay?

The only way to save meaningful money in a golf course is cut back on wages and/or course maintenance.

Either of these are going to have a detrimental impact to the viability of the course. Especially cutting back on greenkeepers. Cutting all the fairways and greens and practice areas every day takes a lot of time and a lot of money and this is the absolute minimum that needs to be done.


/edit
Where is the demand coming back from?

Greebo
You seem to be incredibly negative on the whole issue for someone who is supposed to be independent. The past week has been a mess for all members. At the meeting on Wed we voted to try and move forward as a club. As far as I can it is a low cost, risk free alternative and the last thing we need is a lot of sniping before we even start.

alie

Will the owner try to maintain the course with agricultural machinary? Will they buy proper machines or borrow from other clubs like before?

charlieIRL

shamco wrote: »

Greebo
You seem to be incredibly negative on the whole issue for someone who is supposed to be independent. The past week has been a mess for all members. At the meeting on Wed we voted to try and move forward as a club. As far as I can it is a low cost, risk free alternative and the last thing we need is a lot of sniping before we even start.

As an independent I have to agree with Greebo, its a situation I hope I never have to come across in golf. As mentioned before by someone else as well - a lot of things have to fall into place for this to work, and i hope it does because from all the talk about the place I would love to play a round up there.

GreeBo

shamco wrote: »

Greebo
You seem to be incredibly negative on the whole issue for someone who is supposed to be independent. The past week has been a mess for all members. At the meeting on Wed we voted to try and move forward as a club. As far as I can it is a low cost, risk free alternative and the last thing we need is a lot of sniping before we even start.

Why exactly do you think I am supposed to be independent on this matter?
Its nothing to do with boards.ie, and even so, I am entitled to my opinions just as much as you are on here.


As for "getting over it"...:rolleyes:
Dont let reality stand in the way of your opinions there lads.

It seems that a lot of SC members are not aware of the costs involved in running a golf club and so I think its only right that they go into this with their eyes open.

shamco

GreeBo wrote: »

Why exactly do you think I am supposed to be independent on this matter?
Its nothing to do with boards.ie, and even so, I am entitled to my opinions just as much as you are on here.


As for "getting over it"...:rolleyes:
Dont let reality stand in the way of your opinions there lads.

It seems that a lot of SC members are not aware of the costs involved in running a golf club and so I think its only right that they go into this with their eyes open.

Of course you are entitled to your opinon.When I say independent I'm presuming you are not a member of SCGC. You seem to pointing out all the negatives and have said nothing positive. There is no-one going into this under the illusion that it will easy and I know what it costs to run a golf club having a member of several.

GreeBo

shamco wrote: »

Of course you are entitled to your opinon.When I say independent I'm presuming you are not a member of SCGC. You seem to pointing out all the negatives and have said nothing positive. There is no-one going into this under the illusion that it will easy and I know what it costs to run a golf club having a member of several.

What positives should I be pointing out that havent already been pointed out several times?
If no one points out the negatives then its not reality.

Whyner

Is it possible to get a mod to remove my access to this thread or do I need to rely on will power? It's Friday after all and there's plenty of dossing available elsewhere