Lower Floor Project
- The building is progressing well with 50% of the works now complete. The completion date is May 2024.
- The original project estimate provided by Mammoth of $5.12 million, covering the work remaining from the SMLXL contract, covered some 30 trades and at this point, it is running on track with 6 trades remaining to be let.
- We have had further cost aggravations due to latent conditions and variations due to omissions by SMLXL and consultant costs, amounting to $350k, some of which are related to compliance and regulatory upgrades.
- The omissions by SMLXL are particularly frustrating as they would have been forced to bear that cost under their contract, but we are liable for it under the new Managing Contract Agreement.
- A few costly examples of these variations are identified below, Andy has provided a Clubhouse Update video to assist with your understanding of these variations.
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- Partitions/Ceilings $59k – ceiling height constraints
- Passive Fire $69k – change in compliance regulations
- Increased steel $44k – SMLXL omission
- Floor levelling for carpet $44k – SMLXL omission
- The additional costs bring the latest estimate of the project to $7.5 million. At the end of December, there is still $5 million to be paid to complete the project.
Project Funding
- A condition of our loan agreement with NAB required us to fund an additional $900K of the cost prior to accessing the loan. This extra funding has exhausted our cash reserves and will require us to use our overdraft for the remainder of the year.
- This January, we reached the point where our bank loan kicked in, and the remaining costs of the project are to be funded by the loan.
- At this point, we have adequate funds to complete the project but any further major variations would be of concern.
Upper Floor – Boathouse Sublease
- The heads of agreement with the Boathouse was signed in October 2023, we needed to apply for a modification to our DA to reinstate the operating hours of the ground floor to 8am- 11pm as we had previously. This has now been approved and The Boathouse can operate as planned subject to certain noise restrictions that they have agreed to.
- The Boathouse have submitted concept plans for the upper level, which the Board has in principle approved, the design but will be subject to the CDC approvals. Once approved, we will share the designs with the membership.
- We are thrilled to advise a long term lease agreement has now been signed with the Boathouse Group. The signed agreement has been sent to Crown Lands for final approval, which should take around two weeks. We expect upper level works to begin shortly after, with the completion of the project to be in line with the new clubhouse opening in May.
Lower Floor Cafe
At the AGM, I indicated that The Boathouse did not wish to operate the cafe, which left the Club with 3 options:
- Run the cafe ourselves providing staffing for kitchen and front of house
- Run the cafe ourselves with The Boathouse sourcing ingredients and providing kitchen labour on a “cost plus arrangement”
- Outsource the cafe to a third party
When we commenced the clubhouse project, our plan was to outsource all food operations – both restaurant and cafe – and we anticipated that the restaurant lessee would also manage the cafe.
The decision by The Boathouse not to run the cafe forced us to reconsider the three options above. We have spent the last couple of months discussing and costing these options and have returned to our original view that the best option for us would be to outsource the cafe.
The Board is actively pursuing operators to run the cafe; we will update you once we have received confirmation. Rest assured, if there is any delay in securing an external operator of the café, the Club will provide a comprehensive offering of snacks, coffee and hot food, until such operator is found.
