Members of Melbourne’s Celtic Club, a decaying three-storey inner-city property with a long and proud history to the Irish community, have voted to sell their beloved premises to a developer for $25.6 million to turn into a 48-storey apartment complex.
The Celtic Club premises sit on the corner of Queen and La Trobe streets in Melbourne, and its members have been locked in a divisive battle over whether or not to sell the building to developers for at least three years. Members voted down the most recent proposal, in July, to sell the venue to developer Beulah International. The club requires a 75% approval rate, and 71.5% of votes were in favour.
The vote on Wednesday night passed, with 79.7% members voting in favour of the sale. The final numbers were 274 in favour, 68 against and 2 informal votes.
The motion voted on is mostly the same as the previous motion, but it would come with an option for the club to buy back at least 2000 square metres of space on the first and ground floors of the new building, along with other space. The club’s website says:
“This offer comes with an option for the Club to buy back 2,000 square metres of the Queens Street premises which guarantees the ground and first floors to establish a new contemporary Club. Other space can be purchased to make up the remainder of the 2,000 square metres. The costs of the buy-back will be at market value, based on a range of reputable data sources and agent’s advice to ensure the integrity of this figure. This is based on the existing permit with air rights.”
If the members decided not to go ahead with the sale, the club would owe Beulah International $100,000 “to cover the costs associated with architect and engineering drawings, and re-design of the building to accommodate the redevelopment of the Celtic Club”.
The planning permit for a 48-storey tower on the site is approaching its deadline in October next year, and after changes to planning regulations, any further permits would not allow for a tower as tall, meaning that any future sale would not be as lucrative. Club president Brian Shanahan says that the developers would need 12 months of preparation to start building, which is why the debate has reached this point.
“The value of the building is based on how far you can build up. Once we lose that permit our value will drop back to around $15 million, we’d have to get another permit. If we don’t sell now, we’d lose about $10 million.”
If the club didn’t decide to sell, Shanahan says it is headed for “financial hardship”, as it has more than $2 million in debt, which the club is struggling to pay down. “We run the risk of bankruptcy,” Shanahan said, pointing towards similar clubs around the country that have met that fate in recent years.
The animosity between different groups in the club has become heated, with opponents believing that the offer is not a clear enough guarantee of a good deal for the club.
Opponents of the sale believe that the cost of dealing with developers and lawyers has added to the club’s financial hardship, and Shanahan admits that about two years ago, there was “probably $450,000” spent on the process. He also says that if the club were to continue as is, the current building would require a huge amount of work for its continued use, including water pipes and new electrical wiring. There are also occupational health and safety issues.
“Have you been to the toilet there?” Shanahan asked Crikey. “It’s an experience”.
Shanahan said the meeting went for about three hours, and there was “quite a bit of emotion in the room”.