Of the 20 development partnerships we are currently advising on, three club redevelopment projects in particular are at important junctures with one just completed, another about to submit a DA and the last close to signing a HoA. What really stands out in thinking about these projects is their sheer size, with a combined gross realisation estimated over $500 million (close to $200 million each).
This is big bikkies in anyone’s books, and especially so for a club with a volunteer board and a General Manager that is an expert in club operations rather than building and development.
So what does this mean for General Managers and boards exploring redevelopment of their club?
At this scale, everything is amplified
At a project size close to $200 million, every decision can have a big impact on the club’s outcome. Even a relatively small change of 1% at this level can represent shifts of over $1 million in value to members. This context is important, because it requires a change in focus from cost management into value management.
This means hiring the best experts and consultants to represent the club. Spending a little more during the process can be worth millions of dollars in value to the club and members down the track.
Don’t forget the current club!
We recently spoke with another General Manager about his club redevelopment who said the biggest challenge was having two full time jobs and losing focus on the existing club operations.
It is easy to underestimate the scale of work involved in a redevelopment project, but it is very different to a refurbishment or extension. It requires countless hours of meetings with Council, negotiations and management with external parties, and ongoing administration and management.
We highly advise bringing in expert external support so that you can take a holistic oversight role in the redevelopment, while focusing on the core job of delivering a quality club offering to members.
All sounds good, but how to pay?
Bringing in expertise for projects of this scale makes economic sense and allows club management to do what they do best – manage clubs. It all sounds great, but you may ask how this is funded?
There are two key steps to ensuring a club is appropriately capitalised throughout the process:
- It’s crucial to establish a full and accurate project budget at the outset.
- Negotiate for payments from the development partnership to match the club’s cash flow needs over the life of the project, starting from day one.
There are also other ways, and if you’re contemplating asking Augusta Advisors to help you with the project, ask us about how we have been able to make our advice affordable for even the most cash constrained clubs.
To learn more about how we can help you get the most out of your club property please contact us on (02) 9966 8898 or email firstname.lastname@example.org