The Napier RSA has bought a Taradale bar and gaming machine operation in a unique expansion in the hospital trade.

The purchase of the Taradale Tavern, including the freehold land, buildings and lease for the premises opposite a Caltex service station in Gloucester St, is the name of wholly-owned trading entity Trio Nominees, and was announced in the RSA's monthly newsletter.

It's a step further than a previous extension, being involved for some years in a similar operation known as the Hops n' Hooves, in the Napier CBD and a few hundred metres from the RSA's own Hastings St club.

There are no plans to put any of the RSA operation on to the site or do anything other than manage the lease and tenancy as a business which, chief executive officer Dorothy Paki says, should increase Napier RSA (Returned Services Association) profit by up to $200,000.

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She says it's a "defining moment" in Napier RSA history, which dates back more than a century, and comes as it celebrates making the last mortgage payment on the club site, originally the site of the Hawke's Bay Education Board and which the RSA bought in a move from a former home in a building now occupied by Quest Hotel in Dickens St, Napier, almost 30 years ago.

At an extraordinary meeting in July, members supported funding mechanisms for the tavern purchase but were unable to have its full nature disclosed because of its sensitive commercial nature.

"New borrowings are equal to the purchase price and the RSA management team will manage both the lease and the tenancy agreement and after all costs should increase the profit of the Association circa of $150/$200,000.00," Paki wrote.

Napier RSA president John Purcell is overseas and unavailable to comment further, but the club also has plans proposals for redevelopment of its club site.