Horse racing group Gold Circle has offered R10 million for the cash-strapped Royal Durban Golf Club in a lifeline deal aimed at saving the course from possible closure.
In a letter circulated yesterday, the captain of the golf club, Frans Kemper, urged its members to accept the racing group’s deal above two other possible plans to be tabled at a special meeting on Monday.
Gold Circle acting chief executive, Michel Nairac confirmed the proposed deal yesterday, saying the purchase of the course would complement the R150m refurbishment to bring horse racing into line with the city’s vision to make Durban a big events destination.
Nairac said the golf club was “totally dependent” on income from the Grenville racecourse to balance its books.
“It is a nice agreement. But there is no news until they take it to their members. Then we would have to discuss it with the city. It will be a long process,” he said.
Kemper said the deal was a positive move and for the betterment of Durban. He said the meeting on Monday was to address members’ concerns and to give them all the facts.
“There are some who are against it. But we believe this is very positive for Durban,” he said.
A proposal attached to Kemper’s letter cites the growing number of golf estates in the greater Durban area, tough economic conditions, a shift of the previously affluent community on the Berea and in Morningside to uMhlanga, the rise of virtual golf clubs, increased legislation against smoking and drunken driving and the growth of alternative recreation and entertainment facilities in the city, as the main reasons for the club’s failure.
The administrative and staff costs were exceeding income, and if it were not for revenue from the annual Durban July and Gold Cup horse races, the club would have closed “many years ago”, the document said.
The alternative two options, which members will have to decide on at Monday’s meeting include: allowing the club to limp along as it is; or sell and close the club and merge with another Durban golf facility.
However, the proposals have raised concern about the jobs of 46 people and the standard of the golf offered at the course.
A concern that the city might use the land for low-income housing was also expressed in one of the proposals.
If the members agree to the sale, Gold Circle will buy the golf club for R10m and take over the property lease with eThekwini Municipality.
The transfer would depend on approval from the city.
The golfing lease expires in 2049. Greyville’s lease expires in 2061.
The racing group will take ownership of all the movable assets, which are liability free, as well as all the required personnel and management control of the golf course operations and maintenance of the buildings.
While eThekwini city manager Sibusiso Sithole said he could not comment on the proposed sale as the details were yet to cross his desk, he was upbeat over Gold Circle’s refurbishment plans.
“Once we have all the information (on the sale) we will have a look. We have a very special interest in that precinct. It offers an important extension to Florida Road. It (the upgrade) presents a whole lot of opportunities, more racing and even night golf. We are thrilled with that,” he said.
If the sale goes ahead Gold Circle has agreed that for a minimum of three years, golf would be offered on the property. The existing lease states the land must be used primarily for golf and other recreational purposes.
Nairac said acquiring the property would give Gold Circle an opportunity to develop a new R40m all-weather track fully.
“As you know we are building a 2 000m synthetic track. We have space, but we are restricted.” The proposed deal, Nairec said, would allow them to make the new 2 000m track 3m wider. - The Mercury