Thursday, 25 October 2012

The Strategic Plan for City Tattersalls Club

There is a strategic plan for City Tattersalls Club. Not the mythical, vague "Strategic Plan" that Tony Guilfoyle used to refer to in his useless slide presentations at AGMs (but that no one was allowed to see). No - we mean the real Strategic Plan. The Strategic Plan that explains what has happened to the Club since 2004.

It is not possible for City Tattersalls Club to trade so badly
It doesn't take a genius to see that City Tatts is struggling. But it is only when you dig a little deeper that the scale of the disaster becomes clear. Basically, the Club has performed so badly since 2004 that it can only be intentional. There is no conceivable incompetence, inefficiency or mismanagement that could produce results this bad.

Just consider the situation Guilfoyle inherited in 2004. City Tatts had thrived for 100 years through recession, depression and world war. It owned a large building in the best possible location in Sydney. It had restaurants, bars, gyms and other facilities that were much appreciated by its loyal members. The population living in the city was growing every year. And one more thing - yes, it had over 400 poker machines making a profit of $24 million every year.

What has happened since then is beyond belief. Everything he has touched has failed. Every building project has failed. Every restaurant is failing. (It is not possible for a restaurant to lose $400,000 every year, when you have no rent to pay.) It has been an 8 year track record of total failure.

How did he get away with failure for so long?
You have to wonder why the Committee let him get away with this for so long. Even the members knew as early as 2006 that he was a complete idiot. One reason is that he always took special care to look after the Chairman. We have provided extensive information in previous blogs on Save City Tatts about the three Club Chairmen since 2004. Here it is only necessary to point out that all three were receiving something from the Club that seems to have made them reluctant to rock the boat. So John Healy got his overseas trip and $10,000 a year for gym classes (even though others doing similar classes got nothing). John Kennedy was allowed to run the Bookmakers Superannuation Fund skim operation, making millions for him and the other Three Amigos. And a clinic in Moree which just happens to be run by Pat Campion's brother gets a donation of $80,000 from City Tatts, but the members of City Tatts are never told.

194 Pitt Street is the key to this sordid tale
More and more it looks like buying 194 Pitt Street is the key to understanding the real game. Other internet blogs provide a detailed account of the purchase. In a nutshell, it has been an unmitigated disaster from the point of view of members.

Given that members got nothing from the purchase you have to look at what they were told when they approved the purchase. Most of the promises made to members turned out to be false. For instance, the promised cafe. restaurant and administration office were instantly rejected by the council. This leads you to question the due diligence supposedly done prior to purchase. Basically, either no due diligence was done or it was totally negligent.

But when you look at the purchase from the point of view of someone who wants to hand the Club's property to a developer at a later date it starts to make sense. For one thing, the $9.8 million debt burden instantly increased the odds of the Club getting into financial difficulties and being "forced" to sell it's building. Buying 194 Pitt Street also does a lot directly for the developers, giving them additional options to maximise their profit.

The timetable for selling the building
Members fear that the storm clouds gathering over Tony Guilfoyle will prompt the parties to bring forward the plan to sell the building:
  1. He is under investigation by the Department of Gaming & Racing over the $200,000 he took from the Club, without approval of the Committee. (Not that they could have approved it anyway - loans to employees are prohibited by the Club Rules.)
  2. The relentless exposure on the internet of his dismal failure is getting harder to ignore.
  3. He is trying to sell his motels in Nowra and Mittagong, so he may have money problems.
  4. A few senior employees who were always considered to be on Guilfoyle's side now seem to be discreetly preparing for his departure. (Basically he bought their loyalty with members' money by paying them twice what they would have got elsewhere.) We interpret this as an obvious plan to distance themselves from him for when the proverbial hits the fan.
  5. Even the Committee of City Tatts are starting to doubt him. (Here at Save City Tatts we had extreme difficulty believing this. We have watched for years as the Committee let him do whatever he wanted without a squeak out of them. But careful observers of the Club say they have detected the very early signs of the Committee turning against him. As a small example they notice that the level of propaganda in the Club magazine has declined significantly in recent issues.) 

Who are the players in the game?
Reports from inside and outside the Club have identified the frontrunners in the race to get control of the Club's prized asset - it's property. Last year a meeting was held in March in the Club between a well-known hotelier, a person holding high profile racing positions, a financier and a former City Tatts Treasurer. There have been further meetings and the Club Corruption Vigilante is certain that the property is now "in play".

Save City Tatts Committee

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