The Moruya racecourse is up for sale. How much will it sell for? We don’t know because Council says it doesn’t have to tell us but they have got a prospective buyer who has recently proposed what Council considers “a potentially acceptable price”.
Who is the buyer? Racing NSW.
Racing NSW has indicated that it wishes to secure ownership of the racecourse so it can invest in the facility – this is why Council is considering the sale.
Council leased the Racecourse to the Moruya Jockey Club (MJC) for 50 years in 2017 and the MJC says it is supportive of the sale because they believe it will deliver the community benefits in terms of increased investment.
While the final sale figure is estimated to be a mere $1.5m the community will not be told about the price Council expects to get because, according to Council:
“the Local Government Act 1993 governs rules around confidentiality and specifically Section 10A (2) , of which clause (d) states that information is confidential if it is ‘commercial information of a confidential nature that would, if disclosed: ….(i) prejudice the commercial position of the person who supplied it, ….’
Apparently in this case, Racing NSW is looking at purchasing a number of racecourses around NSW and hence by making public the information about the price they are prepared to pay for Moruya Racecourse, it would ‘prejudice the commercial position of the person who supplied it’ because other racecourses would get wind of how much they paid.
During the August 13th 2019 council meeting, the General Manager referred to the commercial in confidence implications but her reasons seemed somewhat vague and seemed to related to Racing NSW’s dealings with other sites
The General Manager said
“The reason why it is Commercial in Confidence is because ah because racing NSW umm we understand is in discussion with other potential venues and therefore it needs to remain in Commercial in Confidence.”
“So that’s the reason … it is probably more from their perspective Racing NSW than Councils so we need to respect that in terms of confidentiality .”
Meanwhile, we ratepayers and the actual owners of the land will never find out and if Council decides to sell it for a song we don’t even have the right to challenge it because we have no idea of the price other than that the land has been valued and that Racing NSW has provided written confirmation of its offer for the purchase of the property.
Of course, Councillors have been appraised of the sale price and it will be up to them to consider if it is a good price for what Councillor Anthony Mayne recognises as 50 hectres next to an airport - next to the beach - on the Eurobodalla - South Coast NSW saying “To sell it we would have to realise its true value, or we hold it for future generations.”
Clr Mayne is asking of ratepayers “It is your asset. So what do you think? This is out for public submission now. I am seeking a briefing on a possible Lease, rather than a sell off to ensure all options are on the table. This is an incredibly valuable asset.”
You can hear a lot more on what Councillor Mayne says during debate on this at the August 13th, 2019 meeting below:
VIDEO: Ordinary Meeting of Eurobodalla Council Date: August 13th 2019 **
CCS19/035 Potential sale of Moruya Racecourse
The bottom line:
Council owns the racecourse. It is classified as Operational that makes it land that can be sold whenever they like to whoever they like for whatever amount they like. Theoretically the only constraint they have is to ensure the sale is in the best interest of the community they represent.
From the reports and presentations and what we have been able to glean it appears that:
Council owns the land, leases it to the Moruya Jockey Club for a peppercorn rent that is then reinjected back into the racecourse to help keep it functioning. Over the years the primary funding for developments at the course have been funded by Racing NSW.
Now the Moruya Jockey Club needs funds to bring the course up to standard. To address these issues, the Board has identified several essential works, totalling $1,500,000, which need to occur in the coming 18 months.
Chris Gandy of the MJC told Councillors “In addition to these immediate needs our experience indicates that the ever-evolving Thoroughbred Racing industry, statutory regulations and increasing community expectations will necessitate continual capital investment into the foreseeable future to remain a suitable venue for Thoroughbred Racing.
“While the Moruya Jockey Club is in a comparatively sound financial position, we are unable to fund the current works program, let alone service future capital requirements. from our own resources. Consequently, the Board approached Racing NSW for assistance both with regard to our immediate finance requirements and a strategy to satisfy future capital and maintenance needs.”
“During these discussions the Board was briefed on RacingNSW’s new Strategic Plan. While broad in scope, three elements of the Plan were of particular relevance to the Moruya Jockey Club.
These being:
- A commitment to Thoroughbred Racing throughout regional NSW
- An acknowledgment that financial sustainability will be a continuing challenge for Race Club’s such as Moruya.
- A range of strategies, including Racecourse acquisition, to ensure the future certainty and security of Country Clubs.
Mr Gandy said “In this context, the Board sought clarification from RacingNSW as to the implications for the Moruya Jockey Club should it seek to acquire the Moruya Racecourse. This possibility had been briefly discussed with RacingNSW in the past, but the Board believed it needed to be revisited in view of the new Strategic Plan.
"Following a number of discussions and based on the information provided, the Board determined that the security and future sustainability of thoroughbred racing in the Eurobodalla is likely to be significantly enhanced if RacingNSW were to assume full responsibility for the Moruya Racecourse complex and allow the Moruya Jockey Club Ltd to lease the facility on the same terms as the Club’s existing lease.”
So the Moruya Jockey Club needs $1.5m otherwise the racecourse goes belly up.
The proposed sale has little impact on Council as they derived no income from the racecourse. The rent received from the lease to MJC is reinvested back into the racecourse. In fact, according to Council, the removal of the depreciation expenses is anticipated to improve Council’s operating surplus.
So how much will the Council get for the racecourse that is zoned recreational and can’t be used for anything else unless it is rezoned that will require full consultation with the community ? It is estimated that they will receive around $1.5m.
The market value of the land was assessed by a registered valuer in January 2019. This valuation is based on freehold value, vacant possession. The proposed sale price includes consideration of the value of the land and the assets.
The proposed purchase has been in the wind for sometime. According to Council they were approached in late 2015 by Racing NSW enquiring whether Council would consider the sale of the racecourse. It appears that ongoing negotiations with Racing NSW have been periodically occurring and that a potentially acceptable price was recently proposed.
Council say that in making the offer, Racing NSW has indicated its intention is that the land will continue to be used indefinitely for the purposes of thoroughbred racing and training.
Although not legislatively required (because the land is classified Operational) , Racing NSW are aware that Council has a commitment to provide the community with the opportunity to comment on the sale of the Moruya Racecourse.
Why not put the sale up to open tender?
Council offered in writing the following “Section 55 of the Local Government Act 1993 confirms that a tender process is not required for the sale of land or when transacting with a statutory authority.
Section 55 3 states: A council must invite tenders before entering into any of the following contracts 1 (g) a contract for the disposal of property of the council,
(3) This section does not apply to the following contracts: (b) a contract entered into by a council with the Crown (whether in right of the Commonwealth, New South Wales or any other State or a Territory), a Minister of the Crown or a statutory body representing the Crown,
Why not sell it to anyone else other than Racing NSW? It is important to remember that the land is zoned RE2 Private Recreation that only allows, with consent Airstrips; Aquaculture; Boat launching ramps; Boat sheds; Building identification signs; Business identification signs; Camping grounds; Caravan parks; Centre-based child care facilities; Charter and tourism boating facilities; Community facilities; Eco-tourist facilities; Emergency services facilities; Environmental facilities; Function centres; Helipads; Heliports; Information and education facilities; Jetties; Kiosks; Marinas; Markets; Mooring pens; Moorings; Passenger transport facilities; Recreation areas; Recreation facilities (indoor); Recreation facilities (major); Recreation facilities (outdoor); Registered clubs; Research stations; Respite day care centres; Roads; Sewerage systems; Water recreation structures; Water supply systems
On 12 December 2017, Council approved a lease to the Moruya Jockey Club over the Moruya Racecourse. Council also resolved that rent from the lease should go back to the Moruya Racecourse Management Committee for reinvestment in the Racecourse. As such, this means Council presently can do very little with the racecourse for the next 50 years – unless the Jockey Club consents.
With little prospect of raising $1.5m in the next eighteen months to bring the racecourse to a standard the facility is at a cross roads…. Find an investor or possibly shut down.
With Racing NSW prepared to pay in the order of $1.5m for the land (based on estimated land value and that payment of rent to Council being 3% of the Unimproved Capital Value (UCV) of the Land with annual CPI increases) and then inject a further $1.5m into the mix which the MJC believes will result in more trainers coming to the area, more employment and a stimulation of the local economy.
This is a potential positive for the industry if RacingNSW goes ahead with its intention to purchase and expand as the MJC Master Plan attached to the report of 12 December 2017 noted that it was unlikely there would be a significant increase in the number of meetings and “not only unlikely but also could be beyond the local industry and community’s capacity to absorb”.
The MJC Master plan identifies that there are about 100 racehorses registered to be trained at Moruya saying “This is a very healthy situation and has remained at about this level for many years. There is capacity. both at the track and in local stables, for this to increase While there has been a trend for some local trainers to relocate to larger centres, such as Goulburn and Canberra, they are at near capacity levels. There have been inquiries from trainers about the feasibility of setting up pre-training at Moruya. The Club views this as the most likely scenario for increased training activity at the track.”
So there it is. Councillors now have to determine whether to sell to Racing NSW and only Racing NSW and to either accept their offer or push for a little more taking care not to reveal to the ratepayers or other watching townships who are currently also considering sell their own racecourses.
If Council doesn’t sell then nothing is lost other than the local racetrack closes with the knock on effect that the local economy losses out with all those employed in our local race horse industry moving elsewhere.
If Council sell then the prospect of $1.5m coming into the coffers of the ratepayers is a bonus, the removal of the depreciation from the bottom line is a bonus and the possible injection of $1.5m in the short term to bring the racecourse to standard with the improvements further stimulating the local industry as a bonus. What do you think Councillors should do?
Notice is hereby given of Council's proposal to sell the Moruya Racecourse to Racing NSW - the state's independent body responsible for thoroughbred racing. Moruya Jockey Club have a 50 year lease over the racecourse, and are in support of the proposal. Written comments regarding this proposal can be forwarded to the General Manager, PO Box 99, Moruya 2537. For further information contact Andrew Greenway on 4474 1351 (reference no. E14.8327). Closing date: Wednesday 11 September 2019 ** Under MOU with Eurobodalla Shire Council Creative Commons Attribution NonCommercial-NoDerivs 3.0 Australia licence.read more http://bit.ly/beagleCC
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