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The Elsternwick Club is similar to many local clubs across Australia: it is set in a fine old building on a quiet suburban street, offering members lawn bowls, billiards and a member\u2019s bar, while poker machines keep the whole thing financially afloat.<\/p>\n
But what makes the Elsternwick Club unusual is that its board will try to sell the club for $15 million to a buyer it won\u2019t publicly disclose. And all because the club\u2019s legal commitments to pay for its poker machine entitlements is slowly squeezing the financial life out of it.<\/p>\n
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Member Peter Stathis of The Elsternwick Club opposes a sale of the club. <\/span>Credit: <\/span>Wayne Taylor <\/cite><\/p>\n The club, located in Melbourne\u2019s south-east, has fallen on hard times. The roof needs repairs, the restaurant \u2013 described as a \u201cgreat gem\u201d \u2013 is closed. The punters left during COVID-19 and never came back.<\/p>\n Secrecy surrounds the proposed sale of its premises at 16 Sandham Street, Elsternwick. Some members question the sale process and its speed. But others feel the sale is in the best interests of the club and believe members will probably approve it.<\/p>\n At a special general meeting on Wednesday, the club\u2019s board hopes to sell the venue for about $15 million \u2013 but it won\u2019t reveal the buyer\u2019s identity to members unless they sign a non-disclosure agreement. Nor has the board publicly detailed how the money will be distributed if the sale proceeds.<\/p>\n \u201cIt\u2019s disappointing that a community club of heritage significance dating back to 1899 has fallen victim to gaming machine entitlements and is on the brink of closure,\u201d said David Southwick, the MP for the electorate of Caulfield which includes Elsternwick.<\/p>\n The Elsternwick Club is housed in the historic villa Stanmere. <\/span>Credit: <\/span>Wayne Taylor <\/cite><\/p>\n Southwick said the local council \u2013 the City of Glen Eira \u2013 or the state government should step in and \u201censure this community asset remains in community hands\u201d.<\/p>\n A spokesperson for Glen Eira City said the council could not comment on whether it was aware of the sale, approved of the sale or was aware of the process for the proceeds of the sale because the matter was \u201ccommercial in confidence\u201d.<\/p>\n The area and the historic villa the club is housed in, Stanmere, is covered by heritage overlays.<\/p>\n \u201cA planning permit would be required to demolish the building and to construct more than one dwelling on the land,\u201d the spokesperson said.<\/p>\n Late last week, a source with knowledge of the sale, who declined to be named, said the buyer was likely Glen Eira City Council. The council declined to comment.<\/p>\n The club began as a men-only club in 1899 above a shop on Glen Huntly Road. It moved to Stanmere, a grand Italianate villa, in 1919. When The Age<\/em> visited last week, about 20 members were enjoying practice session of lawn bowls in the sunshine \u2013 in contrast to the gaming room, which was devoid of members.<\/p>\n Social club member Peter Stathis opposes the sale.<\/p>\n \u201cWhy would you lose this? This soul, the culture that you see here, the characters that you see inside,\u201d said Stathis, who has not signed the non-disclosure agreement and does not know the identity of the potential purchaser. \u201cI\u2019m heartbroken.\u201d<\/p>\n Gaming revenue at the club collapsed after punters failed to return after the COVID-19 lockdowns. But the club must pay quarterly gaming entitlements of $34,000 for about 30 machines after signing a long-term contract, a process supervised by the Victorian Gambling and Casino Control Commission.<\/p>\n The club is generating insufficient cash to cover this cost. Last financial year, the club reduced its losses to $74,000 down from $237,000 the year prior on revenues of $1.2 million, according to the former president\u2019s annual report in March. But gaming entitlements were deferred and exiting gaming would cost the club an estimated $1.5 million.<\/p>\n Club member Michael Galileos opposes the sale but said he would respect Wednesday\u2019s vote. He was unable to attend the club\u2019s information meeting.<\/p>\n \u201cAll this has happened very quickly. There were no minutes sent of the initial [information] meeting.\u201d<\/p>\n David Stephenson, president of the club\u2019s board, refused to reveal the identity of the buyer to The Age<\/em> and said the board signed a commercial in confidence agreement.<\/p>\n The club\u2019s 2013 constitution states that any property left over after selling the club \u201cshall not be paid to or distributed amongst the members but shall be given or transferred to some other organisation having purposes similar to the purposes of the club\u201d. <\/strong><\/p>\n Stephenson refused to detail that process but said the board would observe the constitution and was committed to high standards of governance.<\/p>\n \u201cIt is a club matter. It is for the members to decide,\u201d he said. \u201cThe board is very mindful of looking after the best interests of the members moving forward.\u201d<\/p>\n In September, the club wrote to Gaming Minister Melissa Horne about its financial woes and its difficulties in paying its gaming entitlements.<\/p>\n A state government spokeswoman declined to comment on the club\u2019s circumstances but said: \u201cVenues experiencing financial difficulties have several options available to them including selling their entitlements on the transfer markets or applying for financial hardship provisions.\u201d<\/p>\n It is understood the club did not apply for hardship provisions.<\/p>\n There are about 100 club members. The Wednesday meeting needs only five per cent to achieve a quorum and a simple majority vote to agree to the sale.<\/p>\n<\/p>\n