Racing: Auckland Trotting Club in $100m debt drama lifeline

The Pukekohe training facility is likely to fetch $100 million. Photo / HRNZ

The Auckland Trotting Club may have secured a lifeline to ward off financial disaster.

Club members will next week vote on the sale of the Pukekohe training facility for which the club has been offered $100 million.

The sale would need the approval of the members and Harness Racing New Zealand and also the rezoning of the land on the outskirts of Pukekohe, but if it proceeds, the ATC will be dug out of one of the deepest holes in the history of New Zealand racing.

The club was left owing close to $100m after major issues during the building of apartment and retail complexes at Alexandra Park.

The issues were fixed and the impressive apartments have been sold and most of the retail space leased but the ATC faced enormous debts that threatened its survival, which could have ended harness racing in Auckland.

A court case against the one of the original contractors recently resulted in a successful judgment for the ATC who are now taking further legal action to recoup some of their losses from that contractor.

The Herald understands the debt is around $100m, with monthly interest repayments, but another large piece of land at Alexandra Park has been sold for $51.6m so the club's debts will be halved.

But that still leaves them owing between $50m-$60m, so the potential sale of the land at Pukekohe will clear the debt and leave a cash windfall.

A significant portion of that will be needed to source land for a new training centre for the trainers who use the Pukekohe facility but one upside of that is it can be purpose-built and more modern.

That money and the income from the retail spaces leased on the lower levels of the apartment buildings will allow the ATC to raise stakes and maintain Alexandra Park at the level needed.

The debts are uncomfortably enormous in the scale of the New Zealand racing industry, and when ATC members and those inside the harness racing industry look at what the newly-formed Auckland Thoroughbred Racing are doing, and their far more positive outcomes, the gravity of the opportunity squandered will hit home.

There were undoubted failings on the ATC side, including a lack of experience in project oversight.

And a major failing was firstly not entering into a joint venture for the developments or simply selling the land with no developments risk, as Auckland Thoroughbred Racing did with the Ellerslie hill.

Another major failing was their choice of one of their original contractors who ATC insiders are adamant is mainly to blame for the fiasco.

But that blame game isn't going to help pay the interest on the loans, and if the Pukekohe land can be rezoned and the $100m deal goes through, harness racing in the region will have been saved without the sale of Alexandra Park.

And the harness racing industry — not just in Auckland — will have dodged the most deadly bullet in New Zealand racing history.