The Alexandra Park developments ended with the Auckland Trotting Club $120 million in debt.
The Auckland Trotting Club could finally dig itself out of a $120 million financial hole with the potential sale of its training track to be voted on by members on July 23.
But while the Auckland Trotting Club (ATC) board have to ask their members for permission to sell the Franklin Park training track in Pukekohe, in reality they either vote in favour of the sale or risk losing harness racing in the region all together.
The ATC has been under enormous financial strain since the building of apartments with commercial spaces underneath was botched by original developer Canam.
When a court judgment ruled Canam owed ATC an enormous compensation payout, the company went into liquidation, leaving ATC all but financially ruined and with no way of claiming the payment awarded to them.
While Alexandra Park now houses some wonderful residential and commercial developments the club’s debt ballooned to $120m, with crippling interest bills.
The sale of a land package at Alexandra Park has reduced that to $83m but an initial deal to sell the Franklin Park training track, on the outskirts of Pukekohe township, fell through even after that developer paid a $10m deposit.
There is now another offer on the table, which the Herald understands is for significantly less money, to buy the training complex, and ATC members will be asked to vote on that at the special meeting on July 23.
That deal would be subject to due diligence on the buyer’s behalf and ATC hopes to be able to lease the property back for at least a year so horses trained at Franklin Park can remain in work while ATC tries to find land to develop a new training centre.
But with the new price paid for Franklin Park being less than the $83m still owed to the bank, members at the July 23 meeting will also be asked to vote on whether some or all of the commercial property at the base of the Alexandra Park apartment buildings can also be sold to clear the debt and even leave ATC with a small surplus.
That could then be put toward the new training complex.
ATC president Jamie MacKinnon says while the members vote is needed under the club’s constitution, he sees no realistic other option for them but to approve the sale.
“In reality the bank thinks it is a fair offer and if we don’t accept it and pay off a large portion of our debt they could take matters into their own hands,” MacKinnon told the Herald.
“It is less money than the original deal which fell through but the market has changed and that is why we will ask members to vote to allow us to also go to the market with some or all of the commercial property under the apartments at Alexandra Park.”
Any of that “profit” would be quickly swallowed up by the new training facility, which MacKinnon says is crucial to keeping harness racing viable north of the Bombay Hills.
“We are confident Harness Racing New Zealand [HRNZ] agree we need a new training facility and their chief executive Brad Steele will be at the July 23 special meeting and another meeting we plan to have with Franklin Park trainers earlier that day.
“We hope HRNZ will be able to help contribute to the new training facility as they recognise the importance of Alexandra Park to the industry.”
HRNZ actually needs to approve the sale of Franklin Park but that would appear a rubber-stamping job should the members approve it.
What will happen to northern harness racing if the members don’t vote “yes” does not bear thinking about.
HRNZ chief executive Steele has confirmed to the Herald his organisation is behind the establishment of a new training facility if and when Franklin Park is sold and it is already investigating funding options.
But even with HRNZ’s backing, the sale of Franklin Park and any, or all, of the commercial assets under the apartment buildings may be the only way to save harness racing in Auckland and bring to a close a horrendous chapter in New Zealand racing.
It has, and will forever be, the cautionary tale on many levels of how business shouldn’t be done and how a racing club shouldn’t have been run.
Michael Guerin wrote his first nationally published racing articles while still in school and started writing about horse racing and the gambling industry for the Herald as a 20-year-old in 1990. He became the Herald’s Racing Editor in 1995 and covers the world’s biggest horse racing carnivals.