Launceston Golf Club's proposed plan to sell off two parcels of land in an attempt to ensure their financial future and improve revenue streams has been given the green light by members.
The recouped revenue from the development would be used to establish a future fund to help lessen the reliance on membership fees, improve the course and renovate the club rooms and driving range to provide the club with better revenue streams going forward.
The club hopes these plans will attract more members to the club and ensure it remains a strong community asset.
The vote gained 72 per cent of approval from members and provides the club's board with a binding mandate to progress with the project.
Launceston Golf Club president Tony Wilks said the club was pleased with the outcome of the vote, which provided the green light for the plan.
"Like any community-based organisation, the golf club is a bit of a microcosm of the community ... that's a mandate which is pretty strong and we'll go forward on that basis," he said.
"I am pretty confident that those that had misgivings will quickly see the benefit of the project and we'll take the whole membership with us on this journey."
The prosposed plan was provided to members in at a special general meeting and a copy of was received by The Examiner.
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The two parcels of land would be used to create a two stage development featuring 41 blocks with an average resale value of $225 thousand per block provided as an conservative estimated return.
According to the plan, the breakdown of the properties would see Stage 1, at Negara St, contain 12 blocks but block six would be used as a strata title units with seven units proposed, creating a total of 18 blocks. Stage two, on the west side of the drive way would contain 23 blocks.
This total gross revenue from this development is estimated to be $9.225 million but based on conservative figures, once construction and transaction costs are removed, the project would deliver a net return of $7.175 million dollars.
Under the proposed plan, the club has taken several steps to minimise their financial exposure during the project. Stage one's civil construction will be funded project finance from a financial institution while revenue from the sale of stage one properties would be used to fund civil construction of stage two.
Funding for City of Launceston Council's planning approval process would be covered from the club's cash reserves.
Mr Wilks said the club had resolved no to go into debt over the project after witnessing the redevelopments of other golf clubs.
"The golf landscape is littered with examples of clubs that have attempted to go into debt to fund their futures and there have been some pretty spectacular failures where debt has been involved," he said.
"We've decided we'd rather use our equity rather than debt to fund the future and secure the place, we think, for many decades to come."
A letter provided to The Examiner, prior to the club's vote, raised concerns about the developments impact on the surrounding wildlife and their habitat.
The club boarders Punchbowl Reserve and the letter estimates 100 trees would have to be cut down for the development to take place, threatening the wildlife.
The letter also raised concerns about the proposal splitting the golf club membership as well as the impact on traffic caused by the development.
At this stage, the club will not commit to funding anything other than funding the application to council for approval.
A firm timeframe of the project also remains unconfirmed due to the approval only being granted last week.
The estimated financial windfall from the project would be used to ensure the financial future of the club and create additional revenue streams.
The centerpiece of the plan would involve the creation of a future fund which would see a minimum of 40 per cent of the net revenue, roughly $2.870 million, put in a special trust to help fund future club.
Mr Wilks said the additional revenue streams would help ease the pressure on club memberships and lessen the need to increase membership fees repeatedly.
"The future fund, even with reasonable estimated returns on investment, will generate sufficient additional revenue to take some pressure off membership fees," he said.
"Also the proceeds will enable us to improve the quality of the clubhouse and course as well so we can attract new members."
The special trust would be able to use 90 per cent of the annual earnings from this fund to lessen the club's reliance of membership fees and better control the pricing of membership fees in the future.
Some of the fund, a proposed 10 per cent, would be left to compound in interest to protect the value of the fund and ensure its viability.
Some of the revenue would be spent on renovating the club's golf course, including upgrading the golf course irrigation, employing an additional member on the greens staff and renovating the bunker among other things.
Money would also be allocated to improve the structural integrity and update the facility, which would include separating the 'spike bar' from the function room.
Designating the function room as a dedicated space, able to be used for parties and weddings, is thought to be another way the club could diversify their financial streams.
The final component of the plan would see the club invest in their driving range, including the installation of high netting, to turn the range into a commercial asset to rival the driving range in Prospect.
The paperwork provided to club members estimates the Prospect range can generate $3000 thousand over a busy weekend.
Mr Wilks said those specific plans were more about using their existing facilities to their maximum potential.
"It's not some much diversification, it's probably better described as using the resources that we've got to generate funds so that we can take the pressure off members and having to continually increase fees," he said.
Overall, Mr Wilks said the money would be improve an important community asset for members and community groups.
"It's a very much a member driven process and hopefully it's a win-win for the club and community."
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