THE Hastings Cricket and Football Social Club is contesting plans by Mornington Peninsula Shire to increase its rent by more than 900 per cent.
The club says it “cannot be a signatory” to the proposed lease as it is “a contradiction of the Gambling Act (2003)”.
Councillors last month agreed to increase the annual rent for the club’s Marine Pde, Hastings, premises – which also houses gaming machines run by The Hastings Club – from $4000 to $42,234 for the first year of a new 21-year lease (“Rent rise tied to pokies”, The News 11/4/17).
The club will then face $5000 a year increases for two years with reviews every five years.
The club has written to the shire saying it believes a lease which is tied to gaming revenues contravenes the Gambling Regulations Act (2003).
“Is it the intention of [the shire] to knowingly contravene the [act]?” The Hastings Club president Peter Lewis stated in a letter to the shire property operations leader Greg Collins.
“Either way, it would be amoral of us to consider agreeing to the ‘offer’ or alternatively, entering into a lease agreement with [the shire] under these conditions.”
The club is resisting signing the lease despite the shire’s property and strategy manager Yasmin Woods having said “all legislation” had been taken into account when assessing the club’s rent.
She said Kingston and Knight Accountants had reviewed the club’s financial statements and audited its community benefit contributions.
Mr Lewis, in his 20 April letter to Mr Collins, states that the club has been “denied the opportunity for negotiation and excluded from representation”.
He also said Cr Kate Roper had used “misinformation” about the club having $2 million profits in an email defending the proposed rent rise.
Cr Roper, in an email seen by The News, said she had tried to have the rent “increased very gradually”.
She said there had been a “very anti-gambling feeling” among councillors and “none of them wanted to give the club any discount”.
Cr Roper said the council’s decision – “which was not explained properly in the newspaper” – provided for rent over $10,000 to be spent on the club’s sports grounds and community groups in the Hastings area.
As the only sporting club to have gaming machines on the peninsula Hastings could not be compared to other clubs which were not paying “commercial” rents.
“According to many observers it was a stunning win to get what I did for [the club] although it was more dramatic for the newspaper to go with such a negative slant,” Cr Roper stated.
The club’s general manager Michael Horton describes Cr Roper’s claim of having had a “stunning win” as “complete bollocks”.
“We have always wanted distribution of our rent to remain in the Hastings community; that’s always been our argument,” Mr Horton stated.
Cr David Gill – who also tried to rein in the rent increase “to give the club time to adjust” – told The News on Thursday that he had not been satisfied with the Ms Woods’s explanation that the rent hike did not contravene the Gambling Act.
“My advice is for the club to hold its ground and see whether council will kick them out,” he said.
The club also questions the $1.2 million value attributed to the buildings and land it occupies as “most of the capital improvement was provided by members of the Hastings Club”.
The club is on Crown land managed by the shire.
Mr Lewis said resentment was building among club members who saw their efforts to improve the site and buildings led to increases in rent.
The shire’s Responsible Electronic Gaming (EGM) policy – acknowledges gaming makes “positive contributions to the community” – says it must consider the net socio-economic impact of gaming on individuals and the community in all council policy, planning, strategy development, land management and community development.
The club, which raises money for cricket and football clubs, has been there since the 1970s and now runs gaming machines as well as providing meals, operating a bar and function rooms.
In her report to council’s Monday 27 March meeting property and strategy manager Yasmin Woods said the club had been paying $4000 a year in rent since 1996, and if three-yearly reviews had been made the current rent would have been $30,250.
The club’s 2015/2016 annual report shows a net profit for the year of about $199,000 with the gaming room operating surplus of more than $930,000.
Gaming revenue increased to $2.22 million in 2016 from $1.99m in 2015.
“The council should not be expected to offer a rental subsidy because the club has an obligation to expend gaming revenue of community services or activities,” Ms Woods stated.
The Valuer-General Victoria recommended charging the club $60,000 a year rent, but Ms Woods suggested giving the club a 50 per cent discount and making the amount $30,000 plus one per cent of gaming room receipts ($22,234) for a total of $52,234.
The motion moved by Cr Kate Roper and adopted by council set the rent at $42,234, which includes $20,000 for land and buildings plus one per cent of gaming receipts. The rent will increase by $5000 for each of the two following years.