Official Shark Park & Woolooware Bay Development

[Walley_01]

Maybe but if we could negotiate a “peppercorn lease” then we should make money from it.

We could run our online sales and set up an eBay store serviced from the shop.
It could be something the club could at least investigateand might help with a few different things;
1. help establish another revenue stream (especially if we don’t pay rent) and
2. help with our branding and selling more jerseys and merchandise

Anyway, just an “outside of the box” thought which I think would be worth investigating.

It’s a great idea...maybe when this is competed they can sell some of this years merch as well

 

[Matty C of the Shire]

Maybe but if we could negotiate a “peppercorn lease” then we should make money from it.

We could run our online sales and set up an eBay store serviced from the shop.
It could be something the club could at least investigateand might help with a few different things;
1. help establish another revenue stream (especially if we don’t pay rent) and
2. help with our branding and selling more jerseys and merchandise

Anyway, just an “outside of the box” thought which I think would be worth investigating.

Definitely mate, it is a good idea. Though what is a “peppercorn “ lease?

 

[Mark^Bastard]

May as well have the main store in the leagues club and a kiosk or shop window with merch. No need for a fully fitted out shop.

 

[Addy]

If you wanted a fully brick and mortar merchant shop, you'd be best suited to sell every team, because we could then sell to away team fans.

40% Sharks 50% NRL 10% Origin/International

 

[Capital_Shark]

Maybe but if we could negotiate a “peppercorn lease” then we should make money from it.

We could run our online sales and set up an eBay store serviced from the shop.
It could be something the club could at least investigateand might help with a few different things;
1. help establish another revenue stream (especially if we don’t pay rent) and
2. help with our branding and selling more jerseys and merchandise

Anyway, just an “outside of the box” thought which I think would be worth investigating.

No need for a bricks and mortar store selling Sharks gear. If people want merch in Cronulla go to the game or club. Otherwise online sales is the go. No need to pay ebay fees they've got an online shop.

 

[Western Sharkie]

It’s a great idea...maybe when this is competed they can sell some of this years merch as well

Hahaha. Yeah, fair call. It hasn't helped not having a sponsor until really late, and trying to organise the merchandise.

Definitely mate, it is a good idea. Though what is a “peppercorn “ lease?

A peppercorn lease, is a "token" or nominal rental amount (say $1.00 a year).

You might find a historical building owned by the government leased to a not for profit or indigenous organisation who Pay a nominal amount for a property that they occupy. Sometimes even to a commercial occupier if the property is government owned but they want someone else to develop it.

Maybe we could negotiate something like that for a smaller shop front with Bluestone Capital.

May as well have the main store in the leagues club and a kiosk or shop window with merch. No need for a fully fitted out shop.

No need for a bricks and mortar store selling Sharks gear. If people want merch in Cronulla go to the game or club. Otherwise online sales is the go. No need to pay ebay fees they've got an online shop.

Both valid points, but if we don't pay rent and get better exposure in a shopping complex, then maybe it's worth considering.

If you wanted a fully brick and mortar merchant shop, you'd be best suited to sell every team, because we could then sell to away team fans.

40% Sharks 50% NRL 10% Origin/International

Yep, definitely. I did previously mention other sports goods, so other teams could also be sold (focusing on teams we play the next round at home). We might also be able to negotiate other clubs merchandise "on consignment" meaning that we don't pay for the goods upfront and take a percentage of the sales of their gear. We can then hand back what doesn't sell and restock with the next opposition clubs merchandise.

Anyway, like I said. Just a thought!

 

[snowman]

Hahaha. Yeah, fair call. It hasn't helped not having a sponsor until really late, and trying to organise the merchandise.




A peppercorn lease, is a "token" or nominal rental amount (say $1.00 a year).

You might find a historical building owned by the government leased to a not for profit or indigenous organisation who Pay a nominal amount for a property that they occupy. Sometimes even to a commercial occupier if the property is government owned but they want someone else to develop it.

Maybe we could negotiate something like that for a smaller shop front with Bluestone Capital.





Both valid points, but if we don't pay rent and get better exposure in a shopping complex, then maybe it's worth considering.



Yep, definitely. I did previously mention other sports goods, so other teams could also be sold (focusing on teams we play the next round at home). We might also be able to negotiate other clubs merchandise "on consignment" meaning that we don't pay for the goods upfront and take a percentage of the sales of their gear. We can then hand back what doesn't sell and restock with the next opposition clubs merchandise.

Anyway, like I said. Just a thought!

its an interseting point and forward thinking but i dont think it would be sustainable after a out a 3 month grace period

better off keeping it in the club, online and game day

 

[SF]

https://www.sharks.com.au/news/2019/03/20/sharks-announce-landmark-agreement

Dear Members,

In a landmark agreement that will secure the Cronulla-Sutherland Sharks financial future, the Cronulla Sharks Leagues Club has agreed to terms with partner Capital Bluestone on approximately a $40 million arrangement which will see the club sell our remaining interest in the Woolooware Bay Town Centre mixed-use development.

This agreement represents the start of a new era for the Sharks with unprecedented security for the club which will enact the strategic re-investment of funds, and of which will be underpinned by a highly experienced investment committee.

Under the leadership of a robust management and board the agreement also enables us to focus on our core operation, which is to create a Club that makes you, your family and friends feel welcome, while providing a range of services and support to our local community, including the Sharks Football Club.

It’s important to note the valued input and decisions of our board in 2012 for originally brokering the partnership with Capital Bluestone.

That relationship continues, with the company committed to delivering a new revitalised Leagues Club for our members, which is expected to be complete in 2021.

Commenced as a joint venture between the Sharks Leagues Club and Capital Bluestone in 2011, the Woolooware Bay Town Centre project comprises four stages. The agreement signed yesterday means the Sharks receive approximately $40 million under the arrangement for consideration of our agreed exit from the joint venture.

This includes $9 million for the land value of the future retail centre, $12.2 million for consideration of the air space above the retail centre, as well as an estimated $18 million for the balance of stage 3 residential sales. This is in addition to the approximately $18 million in development profits we’ve already received to date as a result of the development of the residential stages completed.

We acknowledge and thank our partner Capital Bluestone for working towards this successful outcome for both parties and for its ongoing support for the Sharks, including as a sponsor for the Football Club since 2011, its investment in the Sharks Have Heart initiative and as a supporter of the different community initiatives of our Leagues Club.

This agreement enables us to de-risk rather than divorce ourselves from the development. We still remain an active and engaged stakeholder in the Woolooware Bay Town Centre development and this includes managing the interior fit out for our new Club premises, which are expected to be complete in 2021. Of the final amount payable to the Sharks for our remaining interest in the development, $12 million will be held in an escrow account for use specifically to deliver the Leagues Club refurbishment.

Our involvement in the development has been a major success for our Club. Now, by selling our remaining interest to focus on the future, we’ve been able to strengthen our immediate financial position, secure our future through a revitalised Club premises to provide a strong recurring income stream and, importantly, realise investment returns on our capital.
Stages 1 and 2 of the Woolooware Bay development together comprise approximately 400 residential apartments, which are all complete and sold. We received an up-front payment of $10 million in 2012 and an additional $485,000 in profit distribution in 2017 for stage 1, and then $7.41 million in profit for stage 2, paid in 2018.

An agreement was made by the joint venture partners to postpone the development of the shopping centre, initially earmarked for these earlier stages, to focus on the delivery of residential apartments to capitalise on the strong performing residential market at the time. This strategy resulted in the Sharks receiving approximately $36 million in total for the development of the residential component, instead of approximately $25 million forecast under the original schedule.

Stage 3 comprises 238 apartments and nine town homes and is under construction, with completion scheduled for late 2019. with the $18 million balance to be paid by the end of April 2019.

Stage 4 will comprise 255 apartments, a 71-key hotel, an 18,000sqm shopping centre and a revitalised Sharks Leagues Club. Depending on residential sales and retail leasing, this final stage is expected to commence in late 2019.

Capital Bluestone has gone above and beyond its brief on this project to help our Club when required. Its support over the years has been strong and varied, from providing the Club revenue advances to help in difficult times.

While what is outlined above puts the Club in a strong financial position, there is still considerable work to be done to turn around the current trading performance of the club, which at present we can concede isn’t where it needs to be. We will require time to start closing the gap to profitability, with the boost from the Capital Bluestone injection of funds assisting in the process but certainly not solving all the current issues.

It will be the priority of the Board to use the development proceeds responsibly while reshaping our business model to ensure continued profitability long into the future.

Just to ensure clear and transparent communication on the joint venture, we have outlined below the history of the project. This deal puts the Club on a strong and steady path forward for the first time in years.

It’s an exciting time for the Cronulla Sharks and we thank you for your ongoing support.

Dino Mezzatesta
Chairman



THE CRONULLA SHARKS LEAGUES CLUB & CAPITAL BLUESTONE JOINT VENTURE AT WOOLOOWARE BAY

Timeline

2010:
• The Leagues Club Board identifies the potential for the sale and development of its land holdings at Woolooware Bay to secure the future of the Sharks.
• An expressions of interest process is undertaken to identify a development partner to work with the Sharks to develop its land holdings, which cover approximately 10 hectares.

2011:
• Bluestone Property Solutions (now Capital Bluestone) is appointed as the Club’s chosen development partner.

2012:
• Capital Bluestone advances Cronulla Sutherland Leagues Club a $10 million share of future revenue to pay down Club’s existing debt.

2013:
• Initial approvals for the town centre lodged, the first residential apartments and plans for the retail centre are approved.

2014:
• Work gets underway and the first residential stages are launched with a strong response from the market.

2015:
• The first two residential stages are sold out, one of the stage three buildings is too.

2016:
• Construction progresses well. Stage 1 is completed and stage 2 gets underway.

2017:
• Woolworths and Dan Murphy’s agree to leases in the forthcoming retail centre.

2018:
• Construction continues as stage 2 is complete and stage 3 is commenced, however the residential market downturn means apartment sales in stage 3 slow.

2019:
• Construction of stage 3 to be complete and stage 4 to be launched. Stage 4 includes apartments as well as Bay Central shopping centre, a hotel, revitalised Sharks Leagues Club and more parking.

Key figures

• Due to the staged timing of the first residential stages, total revenue from the residential component paid to the Sharks totals approximately $36 million instead of the $25 million initially forecast under the original schedule.
• This is separate to the additional $21.2 million, to be paid to the Sharks for consideration of the land and air space value for the lot on which the retail component will be developed.
• Of this, $12.2 million will be set aside and specifically used for the club’s new interior refurbishment.
• Estimated total return to the Sharks as a result of the development of the residential component:

• Stage 1 - Upfront Payment: $10,000,000
• Stage 1 - Profit distribution: $485,000
• Stage 2 - Profit distribution: $7,410,000
• Stage 3 - Profit distribution (forward advanced): $18,000,000
• Total amount payable to Sharks for residential component: $35,895,000
• Land and air space value (stage 4): $21.2 million
• Total value of Sharks involvement in the development: $57,095,000

• The estimated end value of the revitalised Sharks Leagues Club is $5.15 million

Very clear. Well done to the Board (and previous Boards).

 

[HaroldBishop]

Yes, very good job.

So this should end the vicious cycle of continually borrowing money, sometimes at inflated interest rates?

Also, I really hope the Leagues Club can become a success once the renovations are done. As I've said before though, I have my doubts.

 

[Matty C of the Shire]

https://www.sharks.com.au/news/2019/03/20/sharks-announce-landmark-agreement




Very clear. Well done to the Board (and previous Boards).

Now we need to have it invested correctly .. no more dodgy ****

 

[Matty C of the Shire]

So that land and air space value? Is that shops and hotel?

 

[snowman]

good news that bluestone are doing the leagues club as well as giving us cash, saves us additional money

 

[snowman]

Hmmmm...

Okay... I've been caught up with work so haven't really had much of a chance to think this one through, but here goes.

Breathe...

Is any of the nuts and bolts of this actually known? Like timeframe, sureties, benchmarking, contracts, guarantors, risks, securities?

The only real info that we have is stuff out of Rothfield's yap - funny he should be once again talking up his prefered Board candidates in the midst of a Board election... but anyhoo...

Just some seriously rough calcs...

Sale of interest in outstanding residential - maybe around $25M
Sale of commercial interest - never the cash-cow some thought - $18M at best I'm guessing


25 +18 = $43M


Club's payment 'in kind' as the seed for Club renos (this ain't cash from what I can tell just an arbitrary dollar offset by developers who'll be doing the works for the Club) - $12M
- last I heard the Club renos were costed out around $18M so the Club has to stump up its own $6M


Current debts that need to be exhausted - $10M (ish)

Required cash on hand to operate for the next 2 years while all this is happening - about $4M

So...

43 - 12 - 6 - 10 - 4 = 11

So where is this $18M "Future Fund" coming from? How is that to be invested? What's are the governance / risk issues around that?

I'll wait to see what the Club says in its official communique to Members because that will (hopefully) have some actual detail and costings / projections to it.

Rothfield's piece seems to be all lollipops and unicorn farts - hope the Club explains all of this a bit better to its membership - afterall, they're the actual key stakeholders here.

thoughts now we dont have to stump up?

 

[Matty C of the Shire]

thoughts now we dont have to stump up?

What did we give up for them to build the new club

 

[HaroldBishop]

thoughts now we dont have to stump up?

What did we give up for them to build the new club

We would have given up some cash in taking early payment vs going the journey.

I'm OK with that given our current predicament as long as we're not surrendering a ridiculous amount.

 

[Western Sharkie]

The bit that has me worried is that we have already rec’d $18m from the first 2 stages and not a lot to show for it.
Granted we used $10m to pay down our debts but that means we have had approx $8m+ Renevue over those years that we don’t have a lot to show for.

I hope that the next tranche of funds are used more efficiently (already $3m is earmarked to pay down debt) and that we create some major income streams out of the left over monies otherwise it will also evaporate and we won’t have anything else left to sell!

 

[Thresher]

Yes, very good job.

So this should end the vicious cycle of continually borrowing money, sometimes at inflated interest rates?

Also, I really hope the Leagues Club can become a success once the renovations are done. As I've said before though, I have my doubts.

We should get Lyall back so that we can throw it at the prospect of getting a soccer franchise.

 

[gando2230]

What did we give up for them to build the new club

The car park.

 

[Matty C of the Shire]

The car park.

Dah.. I wouldn’t surprised that there is something else.

 

[HaroldBishop]

So according to old mate Dino, break even for a home game is 16,500.

If that's true we're screwed.