Sanctuary Lakes Golf Club
The Sanctuary Lakes Golf Club (SLGC) is a membership based leisure and activities club, predominately centered around the magnificent 18 hole championship golf course, designed by the renowned Greg Norman.
Located in Point Cook in Melbourne’s West about 20 kilometres from the CBD it is surrounded by a gated residential estate and is within one of the fastest growing areas of Melbourne.
It is governed by a Board of Directors whose predominate focus is the maintenance of first class facilities for its members and ensuring the ongoing viability and growth of the Club in response to its member’s needs as well as recognising and fostering its position within the wider community.
One of the Club Directors had known Resilience Finance Principal, Shaun Huntington for many years and understood that he had expertise in Commercial and Property Finance. The Club was at a challenging stage of its journey, having transitioned from a developer owned to member owned entity in 2013, the incumbent board were forced to deal with vital questions of the club’s outlook from a trading position, alongside legacy arrangements relating to the repayment of loans falling due. In short the Club was asset rich but deep in debt and incurring operational losses. When Resilience Finance met with the Board of SLGC in January 2015 there was only three months to solve this challenge and repay a major debt falling due. It was also the situation that whilst the Club owned valuable real estate, planning restrictions meant this was not going to be a traditional style land sale. It required some creative thinking and matching a potential developer/buyer who could deal with short timeframes and match the clubs vision.
The starting point was to understand the strategic direction of the Board. It soon became apparent that in order for the Board to move to a more proactive agenda they had to deal with the immediacy of the payment of the significant loan which placed potential control of the Club into third party hands. After initial research, Resilience Finance were engaged as Consultants to the Club to seek alternatives and advise on best possible methods to address the short term situation and then allow the Club to move to a more level footing to plan for the future. In initial Due Diligence, the Clubs legal operating structure, financial metrics in terms of historic and projected trading position as well as an examination of its assets (predominately the Golf Course, Clubhouse and land surrounding the Golf Course) were undertaken.
As Shaun Huntington has considerable experience and qualifications in valuation methods and property development finance these key factors were quickly assessed. It became apparent early that SLGC could lose valuable assets and hence momentum if an achievable plan was not quickly put in place. The land considered surplus to the Club’s requirements was not separately titled and held no permits presenting considerable difficulty in presenting it for sale. The deadline loomed large.
By the middle of February only six weeks after initiation the discussion with Resilience Finance the SLGC had entered into a Heads of Agreement with a developer introduced by Resilience Finance on favorable terms. Focus then turned to ensuring that this agreement was executed with Resilience Finance playing a vital role in ensuring that both the interests of the club and the risks taken by the party introduced were considered without loosing any momentum in achieving a deal for both parties. On 31 March 2015 , SLGC repaid its obligations to the mortgagor and subsequently gained the necessary control over its finance.
Resilience Finance are retained on as needs basis and have subsequently worked with the Club considering their banking relationships, ongoing working capital needs and various opportunities for further development of the Clubs assets.
Importantly, the membership have provided the Board with a vote of confidence in the way that it has navigated the challenges to achieve optimal outcomes.
The Board of the SLGC were very pleased that Resilience Finance was able to assist them in addressing a short term and potentially damaging issue. In developing the working relationship they also came to the view that Resilience Finance are well placed to consider both property related financing and cash flow funding. Shaun Huntington’s ability to work across several board members, Club staff and external parties, whilst retaining an approach appropriate to the commercial sensitivities, at the same time driving an outcome greatly aided the Club.