Give the SGBCC its dues. It has played a clever political game over recent years in order to achieve the proposed sell off of VGC land, particularly since the release of the discredited Tully Heard report. But maybe they have overplayed their hand when the proposition being put to members is Vote YES and you save VGC, or Vote NO and you are voting for its guaranteed permanent closure and sale to developers. Essentially an "all or nothing" vote. This is simply not true and is not an accurate positioning of the current situation.
The upcoming vote should never be framed in this manner unless there is an extremely high level of certainty that this is what in fact will occur. More specifically, members have not been informed that there will be significant hurdles to the permanent closure of VGC or any subsequent sale of the land to developers, and that there are any number of reasons why this decision may need to be reversed or cause such a sale not to proceed. By elevating the vote to this simple proposition it allows the issues with the proposal and the lack of detail required to make an informed decision as to its merits take a clear back seat.
Why The Hurry
So why the hurry to reclassify land to Non-Core when this could be easily delayed until greater certainty and further details are provided. Well a YES vote (whilst not without its future hurdles for the Club and developer) does give SGBCC a free swing at getting through an arrangement that suits its needs given there is little in the way of current commitment to the details of the development. SGBCC then has maximum flexibility and can make any number of decisions regarding the Non-Core land without reverting to members for approval. From what we have seen and heard so far, this will make it easier to get the development passed and should also enable SGBCC to achieve a maximum return of cash proceeds to Sanctuary Point with minimum investment in VGC. For example, expect nothing more than a tiny 250sqm clubhouse that is required to avoid the rezoning process and a course restricted to 9 holes.
Problem for SGBCC is that a NO vote is a nightmare result. The message is currently simple. We will shut the club and sell the whole site to developers who are willing to take the burden of any risk in the development and then the significant proceeds of the sale will be on their way back to Sanctuary Point. The reality is so far from this that it is dangerous. To have members being told this is one of the growing number of grounds to challenge the validity of a YES vote.
Yes the Board can close down VGC, and yes they can do it straight after the Board makes that determination following a NO vote. However, shutting down VGC will have massive ramifications and the process may take many years and need to clear multiple hurdles to be developed.
So What Are the Hurdles
In the context of what will inevitably be a massive increase in community awareness and opposition to SGBCC’s intentions, there are significant legal, regulatory, community, political, environmental, contractual and commercial issues that will need to be navigated and overcome. Here are some of the more obvious hurdles/issues:
1. Well for starters, the Board has communicated to members quite clearly that the resolution for closure has already been passed by the Board. We are now aware from a radio interview with the President last week that may not in fact be the case. The President stated that a Board meeting would be called after the NO vote to decide the course of action.
2. There will inevitably be challenges that SGBCC has not met its obligations under the Memorandum of Understanding (MOU) (see details re the amalgamation here) to invest in VGC. SGBCC has failed to revitalise and maintain the VGC clubhouse and they have failed to invest in the food and catering to attract more patronage (among a number of other key specific obligations). SGBCC and their consultant's report essentially confirm this lack of investment and the poor condition of the clubhouse and services offered and you only need to visit the clubhouse to see this has merit.
Additionally, SGBCC is grounding its decision to sell off part of the VGC on the basis that VGC is not financially viable and will trigger related clauses in the MOU to enable the sale to proceed. The financials are also in dispute (as presented here). Even if the financial dispute falls in favour of SGBCC, the ability of SGBCC to exercise their rights under the MOU to sell VGC land (due to it not being financially viable) when the sole reason for the ability to exercise this right is its own intentional failure to comply with its obligations under the MOU is unlikely to withstand legal scrutiny. In other words, the decision to sell the land will be challenged as unlawful and would be reversible following a successful legal challenge. Expect injunctions to stop the closure and sale and demands for specific performance for SGBCC to meet its unfulfilled obligations. Discussions regarding law firms and funding are already taking place. Unfortunately, the Board has simply dismissed these matters and has refused to discuss them in any meaningful way.
3. Liquor & Gaming NSW ("L&G") is the regulator for the club industry. L&G are already aware of the current situation and the many issues arising. I understand that the issues being raised cover breaches of the MOU, Board governance issues, conflicts of interest, asset stripping, unconscionable conduct, misleading and deceptive conduct and failure to act in the best interest of members (among other complaints). Again my understanding is that the approaches to L&G are coming from multiple sources, members and residents. Whilst L&G have indicated a reluctance to interfere with the current voting process, it is not unreasonable to assume that given the issues and the multiple notifications, that an investigation of SGBCC may occur with L&G having significant powers to act on their findings.
4. There will need to be a further vote to change the VGC land to non core before selling to any developer, unless the sale is put to public tender as required by law..
5. Without an existing licensed club to take advantage of planning exemptions, a rezoning process will need to be undertaken. This will presumably attract significant opposition from an aligned and well-organised community, with a series of local issues needing to be overcome such as noise, traffic, privacy, site suitability, urban planning and environmental matters (to name just some).
6. A DA process will ultimately need to be undertaken and whilst the issues are a little different to a rezoning, this will again have significant opposition.
7. Incoming developers will not easily agree to taking the financial risks relating to rezoning, DA approvals, legal challenges, delay and challenging consent conditions etc. These matters are likely to be a major factor in the return on any sale of land to SGBCC.
8. The accuracy of numerous statements made by SGBCC during the course of this matter will inevitably be heavily scrutinised by stakeholders and actioned either directly or through regulators.
9. If the President is elected to Shoalhaven Shire Council, it is distinctly possible that he will be expected to resign from SGBCC board due to what would seem irresolvable conflicts of interest that can't be managed by simply absolving from voting on certain issues (given his integral part of the current process).
10. If any of the allegations regarding the conduct of the Board are proven, then there is likely to be ramifications for the individual directors. Irrespective, you can expect there will be moves by members to have Board members removed and possibly even suspended or banned from the club as per the club's constitution.
11. Other options will inevitably come forward such as other golf clubs looking for a merger party.
12. SGBCC will have to spend a considerable amount of members funds to undertake this process with no guarantee of success.
13. And of course the closure and sale of VGC together with the repatriation of sale proceeds will cause a massive irreparable rift between the communities of Jervis Bay and the Basin. Expect considerable adverse media coverage and political involvement. Not sure what all that means, but it can't be good and SGBCC will have to take the heat.
Why You Might Consider Voting NO
Consider voting NO and retaining the affected land as Core (at least for the time being) if you don’t like proposed development, you don’t think you have enough information to green light the proposed development, you think there are better options for VGC, or you demand that SGBCC honour their unfulfilled obligations under the MOU. You may have other reasons.
On the other hand you may have a host of reasons to vote YES as dictated by your personal circumstances. BUT please don’t vote YES if you are doing so simply because you believe a NO vote is the end of VGC. Yes it's a risk, but there are significant hurdles before it plays out that way.
Let's face it. If this matter was handled differently by the Board of SGBCC, then it is likely that a good solution would have been achieved for all.
Inexplicably, that was not the path that was chosen.
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