Sale of MotorSport House
Last week, MotorSport New Zealand notified member clubs of the sale of MotorSport House in Wellington. Please see below for the full update. If you have any questions, please feel free to contact Simon Baker or Elton Goonan.
Dear Member Clubs,
Many of you will be aware that the Board of MotorSport NZ had made the decision to place MotorSport House on the market for sale.
This decision came after a lengthy process undertaken by management to re-assess the ongoing needs of the organisation and whether the current premises were suitable for the medium to long term business needs of MotorSport NZ.
MotorSport House had served MotorSport NZ very well as its headquarters for 16 years, but it was very apparent that it was no longer appropriate for the ongoing needs of the organisation for several reasons.
The ever-increasing mobility of MotorSport NZ staff had meant that MotorSport House was generally under-utilised. Having a premises that is larger than needed, or is likely to be needed, contributes to greater than necessary running costs in terms of rates, insurance and maintenance.
Member Clubs were advised at the 2018 AGM that a review would be undertaken, which was met with support from the membership. Last year the process was continuing, and the membership was updated accordingly at the AGM.
One of the key strategic objectives of the Board is to maximise opportunities to commercialise and generate additional revenue streams from various assets and other sources. The desired outcome from this is to generate income for two key reasons, one is to generate income to be reinvested into the sport for the ongoing benefit of its members and stakeholders, while the other is to have the ability to meet ongoing commitments without the need to rely solely on income generated through fees, levies and other charges.
With a stagnated value and no additional revenue being derived from the premises, and additional work required to make it suitable for external tenancies, MotorSport House was not delivering on this objective and was unlikely to in the foreseeable future.
The Board wishes to advise Member Clubs that it has negotiated an unconditional contract for the sale of MotorSport House for $1.3 million, a price that has exceeded the Board’s expectations, and considered a very good price given the current COVID-19 conditions and expected economic fallout.
New Zealand is expected to move into a recessionary economy, and property values are likely to fall as a result.
Therefore, the decision has been made not to reinvest the proceeds of the sale immediately, and these proceeds will be securely ring-fenced for a suitable purchase and other investments designed to achieve the strategy of producing additional income streams for MotorSport NZ and will not be used for any working capital or project funding.
Throughout the decision-making process the Board has been very cognisant of the requirements of the Constitution, particularly rule 15.2, which requires that the Board shall only be able to enter into major transactions (involving 50% or more of MotorSport NZ assets) with the support of 75% of the members present at an AGM.
The Board had sought external advice from its auditors regarding the requirements of rule 15.2, and based on that advice and the Board’s own research, is satisfied that the sale of MotorSport House fully complies with the terms of the Constitution.
In the meantime MotorSport NZ will be taking up a lease on smaller premises on the Kapiti Coast, a location chosen for its close proximity to the majority of staff, and at significantly less cost than what MotorSport House was costing the organisation to maintain and occupy. This decision leaves the organisation in a position where it will be able to act quickly when considering suitable investment opportunities in the future from a cash-buyer’s position.
Wayne Christie, President – MotorSport New Zealand