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Hollywood lakes gc

2

Comments

  • Registered Users, Registered Users 2 Posts: 589 ✭✭✭Dealerz


    Ollieboy wrote: »
    Firstly I'm not a member of the club.

    If the bank accept 1 million instead of 3 million, then that's a write off on debt in anyone's language.

    Nobody else will bid for the site so I reckon the final figure will be around 750k. Not sure where you get the figure of 60k for green fees, but I would expect this to around 100k.

    Finally, the sub will never be 1k, more likely 1200 plus.

    So 1200 x 600 =720000
    Green fees = 100000
    Plus bar, opens, etc.

    Main aim should be keeping cost down.

    1200 is a fair membership fee for any club in co. Dublin.

    Remember this club had no funding issue before the 3 million in debt ie pre 2007 this time next year they will have 3 million in improvements and a manageable debt.

    100k in green fees is optimistic- it's not just private member clubs that are suffering but societies also- I would say €60/70k is good considering its location- and the 70k would include open comps plus bar income.


  • Registered Users, Registered Users 2 Posts: 22,138 ✭✭✭✭PARlance


    Anyone know how long would a golf course have to be left fallow until it could be used for agricultural purposes?

    Agri land is selling at about €14,000 per acre in Dublin at present(and on the rise). With 157 acres, that's a valuation of approx €2.2 million.

    I assume the current asking of "€1.2 million and above" is based on the agri price and allowing a discount for a quick sale and that fact that the land may have to be left fallow for a few years to get rid of chemicals that have been used.

    Talk of it going for under €1.2 million may be a bit hopeful.

    Unfortunately, I'd say the members will be up against some strong competition. Not from lads with wedges, but wellies.

    If the new club/newco managed to secure the land at €1.2 then I think they could make a go at it but its a big ask.

    Assuming the members raise 400k and get a loan for 800k.
    I'm not sure what way a bank would set up the finance for a golf club... Repayment time frame, interest etc.
    A guess would be 80k per annum to service it over 20 years.
    I may be way off there, but I could see the club breaking even with that and income of €600-650k. Things would be tight though.

    The big concern I'd have is the members getting their 400k repaid after 5 years.
    Unless they do it by taking out another loan.
    I can't see the club making 80k profit a year for 5 years to be able to make that commitment without going knocking on the banks door

    Hope it works out, it's a shame to see this situation but unfortunately I wouldn't be hopefull.


  • Registered Users, Registered Users 2 Posts: 998 ✭✭✭John Divney


    http://www.daft.ie/searchcommercial.daft?id=94941

    Find out how much this land in Ballyboughal went for, and go from there. Same land size, but agri land in tillage.


  • Registered Users, Registered Users 2 Posts: 22,138 ✭✭✭✭PARlance


    http://www.daft.ie/searchcommercial.daft?id=94941

    Find out how much this land in Ballyboughal went for, and go from there. Same land size, but agri land in tillage.

    I'd be happy enough with the assumption I've used, give or take.

    From here
    http://www.rte.ie/news/2013/0307/374540-farm-land/

    "The price of agricultural land in Dublin was the highest at almost €14,000 an acre"

    Key to the members securing it is the competition they face, €1.2mill would seem to be a very attractive price for someone to turn it into Agri.
    Key to that would be the amount of time the land would have to be left fallow.
    If its under 3 years, I'd guess there'd be strong competition from farmers.


  • Registered Users, Registered Users 2 Posts: 156 ✭✭josie19


    ajcurry123 wrote: »
    Anyone know how long would a golf course have to be left fallow until it could be used for agricultural purposes?

    Agri land is selling at about €14,000 per acre in Dublin at present(and on the rise). With 157 acres, that's a valuation of approx €2.2 million.

    I assume the current asking of "€1.2 million and above" is based on the agri price and allowing a discount for a quick sale and that fact that the land may have to be left fallow for a few years to get rid of chemicals that have been used.

    Talk of it going for under €1.2 million may be a bit hopeful.

    Unfortunately, I'd say the members will be up against some strong competition. Not from lads with wedges, but wellies.

    If the new club/newco managed to secure the land at €1.2 then I think they could make a go at it but its a big ask.

    Assuming the members raise 400k and get a loan for 800k.
    I'm not sure what way a bank would set up the finance for a golf club... Repayment time frame, interest etc.
    A guess would be 80k per annum to service it over 20 years.
    I may be way off there, but I could see the club breaking even with that and income of €600-650k. Things would be tight though.

    The big concern I'd have is the members getting their 400k repaid after 5 years.
    Unless they do it by taking out another loan.
    I can't see the club making 80k profit a year for 5 years to be able to make that commitment without going knocking on the banks door

    Hope it works out, it's a shame to see this situation but unfortunately I wouldn't be hopefull.

    I've heard it's 5 years for the chemicals to wash out so that's probably factored into the price. On the other hand some farmer could snap it up as a longer term investment with land prices now heading north.

    The assumption that members raise €400k is too optimistic. It was just under €200k at the last count which was close to the deadline for their bid.

    €80,000 per year over 20 years is probably a reasonable guess for €800k but if they have to borrow €1m then it's probably going to be closer to €100k per year to service the debt.

    I'd share your concern with servicing the members debt. It's actually a 7 year bond but with 5% interest payable each year that will cost €10k per year plus around €27k per year to have that paid back in 7 years. Under this scenario it could cost €137k per year for the first 7 years before it would revert to €100k.

    I'm not hopeful either but I hope I'm wrong.


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  • Registered Users, Registered Users 2 Posts: 589 ✭✭✭Dealerz


    josie19 wrote: »
    I've heard it's 5 years for the chemicals to wash out so that's probably factored into the price. On the other hand some farmer could snap it up as a longer term investment with land prices now heading north.

    The assumption that members raise €400k is too optimistic. It was just under €200k at the last count which was close to the deadline for their bid.

    €80,000 per year over 20 years is probably a reasonable guess for €800k but if they have to borrow €1m then it's probably going to be closer to €100k per year to service the debt.

    I'd share your concern with servicing the members debt. It's actually a 7 year bond but with 5% interest payable each year that will cost €10k per year plus around €27k per year to have that paid back in 7 years. Under this scenario it could cost €137k per year for the first 7 years before it would revert to €100k.

    I'm not hopeful either but I hope I'm wrong.

    €200k for c.500 members- it's not great really is it- even with the condition that it's 100 % repayable if the bid is unsuccessful- and if successful you get a 5% roi- I'm sure it must be very difficult for members to commit money in these tough times with another budget around the corner.


  • Registered Users, Registered Users 2 Posts: 22,138 ✭✭✭✭PARlance


    Dealerz wrote: »
    €200k for c.500 members- it's not great really is it- even with the condition that it's 100 % repayable if the bid is unsuccessful- and if successful you get a 5% roi- I'm sure it must be very difficult for members to commit money in these tough times with another budget around the corner.

    The only sure way the members will get their money back is if the bid is unsuccessful.

    If successful, nothing is guaranteed afaik.
    It's all dependant on making it a success after that. If the club was to lose money from the offset and was forced into a sale at a loss, then I can't see how they could protect that 200k


  • Registered Users, Registered Users 2 Posts: 156 ✭✭josie19


    ajcurry123 wrote: »
    The only sure way the members will get their money back is if the bid is unsuccessful.

    If successful, nothing is guaranteed afaik.
    It's all dependant on making it a success after that. If the club was to lose money from the offset and was forced into a sale at a loss, then I can't see how they could protect that 200k

    Dead right. The money is only protected in the event of a failed bid. If the bid is successful the money becomes an investment with all the usual inherent risks.


  • Registered Users, Registered Users 2 Posts: 589 ✭✭✭Dealerz


    Anyone know how the EGM went last night?


  • Registered Users, Registered Users 2 Posts: 156 ✭✭josie19


    Dealerz wrote: »
    Anyone know how the EGM went last night?


    http://www.hollywoodlakesgolfclub.com/_news.php


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  • Registered Users, Registered Users 2 Posts: 589 ✭✭✭Dealerz


    Interesting to see what happens next post sale period. The 2014 subs will be set low by the looks of it to get new cash in.
    Edit: just saw the notice re €999 for 2014

    I'm sure that might get "floating" golfers out there.

    Wonder how existing members are feeling re possible new owners?


  • Registered Users, Registered Users 2, Paid Member Posts: 1,151 ✭✭✭billy3sheets


    Any news on Hollywood Lakes? Was it bought?


  • Registered Users, Registered Users 2 Posts: 1,511 ✭✭✭golfwallah


    Heard rumour today that highest bid in was around €900K.

    According to "Captain's Blog" on their website, members are still trying to raise funds to buy it: http://www.hollywoodlakesgolfclub.com/_readmore.php?id=1580


  • Registered Users, Registered Users 2 Posts: 589 ✭✭✭Dealerz


    Interesting that you can buy life membership for €10k


  • Registered Users, Registered Users 2 Posts: 156 ✭✭josie19


    EGM this Thursday. Receiver in talks with as yet unknown bidder according to text from HL. The fact that the bidder is unknown to the committee does not augur well for the future of the Golf Club. If the bidder was interested in leasing it back to the members then I would imagine the bidder would be in negotiations with the committee. Only two possibilities IMO:

    Bought as farmland
    or
    Bought as a Pay and Play


  • Registered Users, Registered Users 2 Posts: 589 ✭✭✭Dealerz


    Any update?


  • Registered Users, Registered Users 2 Posts: 156 ✭✭josie19


    EGM cancelled at short notice - all in the dark


  • Registered Users, Registered Users 2 Posts: 6 The Bottler


    Possible problems with boundary issues complicating sale.
    The Members are the only group that can make H. Lakes into a going concern as a golf club, otherwise the property reverts to farmland.
    Members should walk away if a Buyer/Investor wants to incorporate a deal involving a lease of the Club to the Members.


  • Registered Users, Registered Users 2 Posts: 156 ✭✭josie19


    Possible problems with boundary issues complicating sale.
    The Members are the only group that can make H. Lakes into a going concern as a golf club, otherwise the property reverts to farmland.
    Members should walk away if a Buyer/Investor wants to incorporate a deal involving a lease of the Club to the Members.

    Why? I would have thought that this is the only way the club could survive. The members have failed in their bid to secure a loan and are now relying on some friendly bidder leasing it back to them. Are there other scenarios?


  • Registered Users, Registered Users 2 Posts: 6 The Bottler


    Doubt if such an entity as a "friendly bidder" exists. Bank badly messed up when it appointed a receiver. Bank should have negotiated a realistic debt write down with the membership. Then Bank should have followed by a moratorium on capital repayments for a number of years. This would have given H. Lakes Golf Club the breathing space to rebuild the membership and the Bank could have possibly eventually recovered 50% - 60% of its exposure. It now looks like the Bank will be lucky to retrieve 35%! Very few individuals left in Irish Banking with commercial cop on!


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  • Registered Users, Registered Users 2 Posts: 156 ✭✭josie19


    Doubt if such an entity as a "friendly bidder" exists. Bank badly messed up when it appointed a receiver. Bank should have negotiated a realistic debt write down with the membership. Then Bank should have followed by a moratorium on capital repayments for a number of years. This would have given H. Lakes Golf Club the breathing space to rebuild the membership and the Bank could have possibly eventually recovered 50% - 60% of its exposure. It now looks like the Bank will be lucky to retrieve 35%! Very few individuals left in Irish Banking with commercial cop on!

    By friendly bidder I mean someone interested in the Golf Club continuing as a going concern. The bank in question is Danske and they've made a commercial decision to exit the Irish market with contingent losses and all that.


  • Registered Users, Registered Users 2 Posts: 6 The Bottler


    Danske appear to be very much involved in expanding their business here!


  • Registered Users, Registered Users 2 Posts: 156 ✭✭josie19


    Danske appear to be very much involved in expanding their business here!

    Try reading the news - it can be very informative sometimes.

    http://www.rte.ie/news/2013/1031/483729-danske-bank-to-close-with-loss-of-150-jobs/

    Extract from above:

    Danske said existing personal and business banking would be discontinued.


  • Registered Users, Registered Users 2 Posts: 22,133 ✭✭✭✭FixdePitchmark


    josie19 wrote: »
    Try reading the news - it can be very informative sometimes.

    Overrated.


  • Registered Users, Registered Users 2 Posts: 176 ✭✭Carpo86


    To be fair that news story just says Danke is getting out of the personal banking market. Not exactly relevant for any interest they have in Hollywood Lakes.


  • Registered Users, Registered Users 2 Posts: 7 therealbigmac


    What is the most probable outcome at the moment do people think? Is there a chance the course will stay open?? Would hate to see it close tbh


  • Registered Users, Registered Users 2 Posts: 24 NowThatsCool


    Shame, I played there a while back. It could take many tens of Euros to turn it back to farmland.


  • Registered Users, Registered Users 2 Posts: 6 The Bottler


    "Danske Bank Ireland, formerly National Irish Bank, is to withdraw from the personal banking market to refocus on its corporate customers."

    I do read the news!

    Back in 1994 H. Lakes G.C. got off the ground with a €1.5 million debt and about 300 Members. That debt was fully repaid around 2005 and the club was debt free prior to borrowing to build a new clubhouse and upgrade entrance, driveway etc.

    I still believe Bank messed up.


  • Registered Users, Registered Users 2 Posts: 156 ✭✭josie19


    Carpo86 wrote: »
    To be fair that news story just says Danke is getting out of the personal banking market. Not exactly relevant for any interest they have in Hollywood Lakes.

    Personal and Business


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  • Registered Users, Registered Users 2 Posts: 1,511 ✭✭✭golfwallah


    "Danske Bank Ireland, formerly National Irish Bank, is to withdraw from the personal banking market to refocus on its corporate customers."

    I do read the news!

    Back in 1994 H. Lakes G.C. got off the ground with a €1.5 million debt and about 300 Members. That debt was fully repaid around 2005 and the club was debt free prior to borrowing to build a new clubhouse and upgrade entrance, driveway etc.

    I still believe Bank messed up.

    In all fairness, it takes two to tango - both the Bank & Hollywood Lakes GC messed up!

    The club's decision as regards
    borrowing to build a new clubhouse and upgrade entrance, driveway etc.
    may have been desirable - but it was simply not affordable, except under the most optimistic economic assumptions.

    Other clubs have had to cut their cloth according to their measure, however desirable building replacement infrastructure may have been. And Hollywood Lakes could have achieved their objectives in these areas, with less risk, by more modest means or over a longer period.

    I've been in the new clubhouse and seen the upgraded entrance, driveway etc. in Hollywood Lakes - they are all beautiful - but, and here's the rub, lavish beyond the dreams of most ordinary member owned clubs. I mean to say, what were these folk thinking about when they incurred such massive debt for purely "nice to have" OTT luxury?

    All they have done is demonstrate that they are not capable of running the business side of a golf club over the long haul, IMO!

    Like a risk/reward shot in golf, they took on the water (instead of laying up), ended up in trouble and we're supposed to believe it wasn't their fault?


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