Club Metro was established last year through the amalgamation of the RSA and Cosmopolitan Club.
Photo / Bevan Conley
Club Metro was established last year through the amalgamation of the RSA and Cosmopolitan Club.
Photo / Bevan Conley
The future of Club Metro is uncertain with the club having six months to pay off a $671,000 loan.
Club Metro members have been made well aware of the financial situation in a letter sent to all members this week.
In the letter, which was anonymously released to the Chronicle,board chair Robert Allen says he wants to give members a heads up before this weekend's AGM.
"Some things cannot be sugar coated, and Club Metro's current financial position is one of these," Allen states.
"You may recall a statement being made at the inaugural AGM that the Cosmopolitan Club loan of $671,000 would be settled from the sale of the RSA building.
"Unfortunately this did not happen, as the debts from both the RSA and Cosmopolitan Club far exceeded that which was originally thought."
Allen states the management board has been open and transparent throughout the year in regards to financial problems, but that has done nothing to remedy the problems.
The $671,000 loan is due to be repaid by February 10 next year.
Club Metro took over the Ridgway St building that previously housed the Cosmopolitan Club.
Photo / Bevan Conley
"Unless we see a major funding investment and increase in the support of the club we will be unable to repay this loan," the letter reads.
Allen states the impact the loan has had, and continues to have, on the club is immense.
"The interest rate of 8.75 per cent means our quarterly interest repayments are a staggering $15,000. That's some $60,000 per year taken straight off our bottom line."
The letter calls for members to consider three proposals: investing funds through debentures in Club Metro, contributing a donation to the club, or an option to sell the club building and lease it back off the new owners.
"Your board and management have decided to cast the net wide and offer you, the members, the opportunity to help the viability and future of Club Metro with the repayment of this loan," Allen states.
"Full disclosure of our financial position will be made at the AGM, along with the tough decisions we face should we be unable to meet the repayment of the $671,000 loan."
Allen said he would be available to comment to the Chronicle after Sunday's AGM.
Club Metro was established last year following the amalgamation of the Cosmopolitan Club and Wanganui Returned and Services Association (RSA).
The new club took over the Cosmopolitan Club building on Ridgway St as part of the amalgamation.
Three weeks ago Club Metro and Grey Power signed an agreement for Grey Power to use part of the Ridgway St building for an office.
At the time Allen said it was a win-win situation for both organisations, and that he hoped the agreement would give Club Metro more exposure to attract new members.
