27 Car Clubs sign the email below, which expresses deep dissatisfaction with the Board of Motorsport New Zealand. It’s expected that a call by the affiliated Car Clubs will be made for a Special general Meeting of MSNZ should the Board prevaricate on the issue’s raised by the member clubs.
MotorSport New Zealand
REF SALE OF 69 HUTT ROAD AND INCREASED STAFFING
Regarding your recent note to member clubs, that the Board had approved the sale of Motorsport House located at 69 Hutt Road, Pipitea, Wellington. Your letter advised that the building had sold for $1.3 Million dollars, a price which had “exceeded the boards expectations”.
The below listed clubs have concerns about the sale of the building, in particular the price the building was sold for and the process that was undertaken to sell the building.
We therefore make the following statements and request that the board provide to us answers to the following questions.
Our understanding is that the building had a capital valuation in 2018 of $1,530,000. In 2019 Wellington City Council changed the rating differential for commercial buildings as on average the capital value of commercial buildings in Wellington had risen by 22%. This would equate to a building value in 2010 of $1,866,000. Our understanding is that between 2019 and 2020 Wellington prices did stay somewhat static, but they certainly didn’t reduce.
- Based on the figures above how was it that the board considered $1.3million “exceeded the Board’s expectations”?
It is usual practice to get at least two market valuations from registered valuers prior to marketing a building of this value. Three is not uncommon.
- Did the Board get advice from a registered valuer on the building’s current market value? If not, please explain why. If it did, please provide copies.
In your letter you referred to clause 15.2 of the Motorsport New Zealand constitution. We assume that this specifically means the requirement under clause 15.2 (t). It is stated that the Board consulted its auditors.
- What were the figures provided to the auditors to make that assessment?
- Please provide a copy of those figures.
Was any legal advice sought on the sale of the building and compliance with the requirements of the constitution?
- If so, please provide a copy of that advice.
Members are concerned that the building sale price was accepted at $1.3 million to ensure that the price obtained stayed within the requirements of clause 15.2 (t). I.e. to avoid the requirement for broader consultation.
- We would appreciate the Board’s response to that concern.
Whilst you alluded to informing clubs of a review of the building at the past AGM, no direction was sought from clubs over their view or authority sought, on the sale of the building. It was simply an update.
- Even at the sale price, this was a very significant decision for the Board to make. Members would like to understand why there was no consultation with member clubs in any event?
You state “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”.
- Please provide all of the correspondence relating to the process, including any reports and recommendations.
Further stated in your letter is this statement:- “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”.
- What does this mean? Has the board already determined what the money from the building will be used for?
If this is the case, please provide details of how the money will be used.
We are at a loss to understand the drivers for the decision to relocate MSNZ to the Kapiti Coast, or how it is of benefit to MSNZ.
Again, we would like to see all of the working papers which lead to this decision.
We note that one reason was to be “closer to staff”. Which staff are being referred to?
Motorsport House was located in Wellington after lengthy discussions with the Member clubs when Torrens Terrace was sold and new premises were being considered. The central location was a key factor and gave accessibility to Member clubs to fly into Wellington and a reasonably cheap taxi fare from the airport to Motorsport House. By locating the office on the Kapiti Coast that accessibility for Member Clubs has disappeared.
There is a mention of cost savings by relocating the office.
For that reason, member clubs are very concerned to understand how moving to the Kapiti Coast contributes to the “ongoing needs of the organisation and whether the current premises were suitable for the medium to long term business needs of MotorSport NZ”.
- Is it the intention of the board that we as a sport no longer have a building?
- What are the savings expected?
- Please provide a copy of the cost-benefit analysis that was undertaken.
- What will be the new address of Motorsport New Zealand on the “Kapiti Coast”?
- Who owns the building that Motorsport New Zealand will be leasing?
Member Clubs have noticed that there has been a considerable increase in staff numbers. According to the website, there are now 12 staff employed by Motorsport New Zealand, a considerable increase at a time when most businesses are struggling to hold onto staff, and in some cases are laying staff off. Whilst the government wage subsidy might have assisted in the affordability over lockdown, that is not a long-term subsidy.
- How is it intended to fund these new positions?
- What is the overall intended structure of MSNZ office with areas of responsibility?
We are disappointed at the lack of contact and information sent to member clubs on the future operation of Motorsport New Zealand and what is being seen as a deliberate attempt to lock Member Clubs out of having any say in the disposal of MotorSport House.
To be clear, we are very concerned at these developments. We would appreciate responses to our information requests being given top priority.
Otherwise, please give an urgent assurance that the sale proceeds are ringfenced in the short term, in a low-risk investment. Our view is that no irreversible transactions should be entered into with the sale proceeds, until member clubs are satisfactorily informed about this situation.
Lastly, please urgently confirm whether the sale is able to be unwound, or is it unconditional? If so, when is settlement?
As many as half of the current 12 employees at MSNZ are expected to lose their jobs as part of a major restructure of MSNZ.
An official announcement confirming the restructure is expected to be made by the President of MotorSport New Zealand, Wayne Christie, later this week.