It’s been clear for a while that James Kennedy (no relation to John Kennedy BSF) is a fraud.
The very fact of his appointment was a red flag to experienced City Tatts watchers. They instantly suspected that the whole property development was shonky and Kennedy’s role was to deter members from looking too closely at the whole deal, by telling them everything was ok. In effect, he was another part of the public relations campaign to con members.
So it was no surprise that he would turn a blind eye to anything shifty. Here are just some of the things he has ignored:
- Patrick Campion’s first step in the property development was to mortgage the Club’s property to ANZ without telling members. This is a breach of the City Tattersalls Act but Kennedy has no problem with it.
- The Colliers campaign to find a developer could only find two serious bidders. But every story about residential development in the papers for the past year talks about the enormous demand from developers for sites to build apartments. In fact, many reports note “hundreds” of enquiries. So you know the Colliers campaign was the worst attempt to find a developer in recent memory – if they really were trying to find one. But Kennedy sees nothing wrong here.
- A member who started asking tough questions about the mortgage, Johny Bineham, was suspended on the afternoon of a meeting (without a hearing) to prevent him speaking at it – but Kennedy pretends that he doesn’t know about this.
- And what the “negotiations” with Mirvac? It doesn’t make sense that the Club could still be negotiating with Mirvac after 8 months – because for Mirvac to be awarded the contract, they must have promised to meet all major conditions in the tender last December. If Kennedy has any knowledge of commercial property he must know that something is very wrong here.
But there is even more to the James Kennedy story. The amazing thing is when you have a close look he offers no assurance whatsoever no members!
Despite all the trappings of checking the whole Mirvac process, and reporting to members that all is fair and honest, the reality is that he does nothing of the sort. What he actually says to members is that the whole campaign has a “structure and process appropriate to the scale of the project and it’s criticality to the Club“.
This is a meaningless, empty, useless statement. It tells you that Campion and Guilfoyle set up procedures that lead to Mirvac getting the nod. It doesn’t tell you that the conduct of these procedures has been fair or honest or in the best interests of members. Using the Kennedy approach to corporate governance, ICAC could uncover the whole system for giving illegal donations to the Liberal Party and then report that the system had a “structure and process appropriate to the scale of the project and it’s criticality to the Liberal Party“.
So what do City Tatts members get for the money paid to Kennedy?
City Tatts Information Desk
Dear Remaining Members
I write to deceive you again about my insane property development.
As you are aware, the airhead development will dramatically enrich a few insiders and ensure the Club has no future.
Members have been deceived all along about the negotiations and other issues. These should have been completed about six monthe ago but Mirvac know we are desperate and have dragged them out.
I am pleased to advise that your Committee and Management have now resolved all major issues, except for those major issues still not resolved.
Due to these unresolved issues, which should have been resolved six months ago, there will be another delay.
Members will now be presented with the proposed resolution, without most of the pertinent information, at a final Members Briefing. A Special General Meeting will be held on 1 December 2014 where the Club will announce the outcome of the member’s vote. But I can tell you now that the Rookwood vote shows unanimous support.
Our Committee are desperate for this development to go ahead but Mirvac are getting cold feet and there is now a real chance they will walk away.
More lies will be provided at Members Briefing 10.
At this meeting we will omit any relevant information that would reveal the absolute stupidity of this development.
We will continue to hold drop off sessions every Tuesday and now after midnight for those counting the Rookwood votes.
Since the beginning of this process, your Committee and Management has continually deceived you about the outcome of this development, while at the same time creating a gravy train for consultants. In recent months the Committee has:
- Fudged all bank valuations
- Negotiated deals with nearby inner city clubs to maintain the illusion that the Club will continue to operate during the “interim build” period (whatever that means)
- Finalised the insurance details to protect the Committee in case the whole thing goes belly up
- Bent over backwards to give Mirvac everything they wanted (and still they’re not happy)
- Held more useless Members Briefings to deceive members
If you have any further questions don’t bother us with them because our mind is made up. You can visit our alternative website: City Tatts Information Desk @ WordPress.com.
I continue to pretend that there is support for this crackpot development but I know that everyone who has examined it says it will be the end of City Tatts.
Tweedledee (Patrick Campion)
City Tattersalls Club
For ten years Tweedledum (Tony Guilfoyle) has produced an endless string of excuses to explain his abject failure as CEO.
And for reasons no one understands he has trained Tweedledee (Patrick Campion) to be his lapdog to dish them out to members.
The latest “trading update” continues the tradition, along with the usual lies and deception.
According to Tweedledee, gaming revenue was “solid” which is probably CampionSpeak for “not good”. But then comes the main point of the “trading update” – the most hilarious excuse offered to members yet. The reason trading was weak was because, starting on 18 July 2014, “Between the hours of 12am (midnight) and 7am no alcoholic/non alcoholic drinks can be sold or supplied in glass containers …….”.
So, if your wondering why the Club can’t pay it’s suppliers, or why it owes the bank $20 million, or why members have been leaving in droves for ten years ….. it’s because drinks have to be served in plastic containers after midnight!
And these two clowns want to build a 48 storey building.
City Tatts Information Desk
Yes, it’s now 8 months since Tweedledee announced that Mirvac were the “preferred developer” of the City Tatts site, and still Mirvac have said nothing.
This is a $178 million project and yet there has not been a squeak from the lucky developer, so you know there is something fishy about the whole deal. The recent bizarre underground carpark proposal confirms that fishy smell.
Eight months to negotiate a Development Management Agreement is ridiculous – and everyone in the property industry knows it. Remember, Mirvac were appointed because they agreed to the requirements specified in the tender documents, so it’s obvious the “negotiations” are a sham. There is only one explanation – Mirvac agreed to the conditions to get the deal (and knock out their competitors) and have spent 8 months since then “negotiating” to get out of what they agreed to do.
But it might not all be plain sailing from here. We had always believed that Mirvac were delighted with the City Tatts deal. They knew that Tweedledum and Tweedledee were desperate for a property development and were happy to give Mirvac whatever they wanted.
But a few higher-ups in Mirvac (above the sales reps sent to City Tatts) are starting to question whether the project might be more trouble than it’s worth. They realise that this one could go badly wrong and they are just big enough to care about public opinion. And when it does go wrong, which is a certainty, any investigation will show that the property development never made any sense for the Club. The numbers will prove that the Club would be better off without any property development.
There is no absolutely no need for a property development at City Tatts. The Club simply needs new management.
City Tatts Information Desk
Have a good look at the Kirribilli Club. This is the future of City Tattersalls Club – soon to be brought to you by Tweedledum and Tweedledee.
There was a very good article by Leesha McKenny about the Kirribilli Club’s woes in the Sun Herald yesterday.
This is a brief summary of what has happened at the Kirribilli Club:
- The Club did a property development on their site in 2007, resulting in the construction of apartments.
- But a lot of money was spent on the fit out and other changes to the new club so they lost money in the first couple of years after reopening.
- Although the developent was said to be the answer to the Club’s financial problems, they went into the project with debts of $5 million – and emerged with debts now at $9 million!
- Members were given a PowerPoint presentation about the deal but “when members asked about things such as the sale price, why it did not go out to tender and so on, there was a distinct lack of detail in the response”.
- The board now wants to reclassify the Club’s premises as a “non-core” asset so it can be sold without going to open tender.
- The board wants to move quickly and says the proposed sale is the only option to prevent the Club appointing an administrator.
Now think about City Tatts in light of the above. Everything that has happened to the Kirribilli Club will happen to City Tatts. All the pieces are in place. Except that when it comes to developers getting their hands on a club’s premises the City Tatts site is the biggest prize of all. And City Tatts owes $20 million going in. Given that Campion and Guilfoyle would have to be the worst pair in Sydney to attempt a property development it’s anybody’s guess as to how much City Tatts will owe at the end. Almost certainly enough to sink it. The one comic aspect to the Kirribilli Club story was the CEO’s opinion that they reopened “at a pretty difficult time”. Well then City Tatts is doomed. Because with Guilfoyle it is always a difficult time. For ten years he has produced an endless series of excuses to “explain” why the Club is going downhill under his management.
These examples of clubs losing their premises to property developers can no longer be viewed as isolated cases. There is now a full on industry based on this. But despite all the promises of what the development will do for the club, how many could truly be said to have been saved by the development?
City Tatts Information Desk
There have been some developments in the corporate governance of Guilfoyle’s insane property development, some to be expected, some strange.
No surprise, James Kennedy (no relation to John Kennedy BSF) turned out to be a complete fraud. He gives a grandiose description of why everything about the property process is above board – but makes no mention of how a member (Johny Bineham) was barred from the Club to prevent him exposing the hidden details of the plan.
In any case, it was always likely that James Kennedy was selected to do Guilfoyle’s bidding and close his eyes to any irregularities. That is normal for consultants paid by City Tatts but a few were hoping that someone appointed to oversee the whole process might be fair dinkum. But alas no – Kennedy is just a fraud.
Everyone else in the Sydney property development scene knows there is something terribly wrong about the whole Colliers campaign that resulted in Mirvac being selected. The Sydney apartment market in 2013 was the best it had been in five or six years. There would have to be at least ten developers who would be seriously interested in building a high-rise apartment development in the Sydney CBD. Any campaign that could only find one serious bidder must be badly flawed, or rigged.
But there’s more about James Kennedy!
At City Tatts truth is stranger than fiction. James Kennedy has left KPMG to go to Jones Lang La Salle. But he will still oversee the corporate governance of the City Tatts property deal until Mirvac sign the DMA – with the approval of KPMG!
At least we know the City Tatts consultants gravy train rolls on. In fact, they must have spent close to $2 million by now – on something that has yet to be put to members, never mind approved.
City Tatts Information Desk
When it comes to obtaining a financial advantage by deception at City Tatts the prize has always been a property development on the Club’s site.
As far back as 2006, a few astute members felt that the real game plan was to run the Club so badly that it would have to be “saved” by a property development. Everything that has happened since then proves that this was indeed the plan.
Let’s face it, a deliberate plan ro run the Club into the ground is the only explanation for what has happened to City Tatts. It is simply impossible for a club with a large freehold building and 400 poker machines to be in such dire straits with honest management. There is no need for any property development. Anyone who cared about the Club or the members would never entertain the idea of a property development. The only people promoting a property development are people who will make money from it.
So members have been deceived all the way on this insane property proposal. Here is an outline of the key steps in the conspiracy.
1 The Purchase of 194 Pitt Street
Everything about the purchase of 194 Pitt Street in 2007 was dishonest. It has been covered many times elsewhere but basically members were conned into buying it on the basis of dishonest promises of what it would do for members – when the real reason was to use it as part of a future property development.
2 Joining with Colliers
The game plan all along was to push the plan so far, in secret, that it would be too late for members to stop it. That’s why the Committee were negotiating with Colliers unknown to members in 2012. It was only after the talks were revealed in the Sydney Morning Herald that Campion told members what he was doing.
3 Airspace Information Meetings – dishonest all the way.
Basically Campion and Guilfoyle realised that a full and complete account of what they were doing would frighten members, who would then reject the plan. So a decision was made to say anything that would keep the members onside and then drip feed the truth at a later date. These are some examples:
“The Club will retain ownership of all assets”.
Campion told members that the Club would always own the apartments and Mirvac would sell them as leasehold. This was never going to happen and, sure enough, a year later Campion admitted that they would be sold off like any other apartments. Then Campion said the Club would retain ownership of the hotel. Now he says he might have to sell it to pay down the debt accumulated during construction.
The amount of money spent to date on the development plan
Campion has continually deceived members about how much the Club has spent on his plan. First it was “at no cost” to the Club. Then it was $50,000. In December 2013 he told members it was $220,000. In fact it was over $900,000 by then, as the accounts prove. There was no way members would have agreed to spending that much – and Campion knew it. Next he will say we have spent so much we can’t stop now.
One of the key elements of the plan has been to bring in a small army of consultants who are paid, with members money, to persuade members that it is a good idea. Probably the most outrageous was a clown from RSM Bird Cameron who said the massive debt will be paid off easily in a few years.
The Mortgage on 196-204 Pitt Street
Moving from NAB to ANZ was a key step in the conspiracy to railroad the members into a property development. By early 2013 NAB had enough of Guilfoyle and City Tatts and told them to go – after 40 years of doing business with the Club. But ANZ would only lend if they got a mortgage over the Club’s building at 196-204 Pitt Street. The problem for Campion was that members had to approve any new mortgage which would have alerted them to the dire financial condition of the Club. So Campion just signed the mortgage himself without telling members. This, of course, made ANZ a key player in any dealings on the site. Just look at Marrickville RSL to realise the significance of this.
The DA lodged by Mirvac
If you want conclusive proof that there has always been a conspiracy to do a property development regardless of what members want simply look at the DA lodged by Mirvac last month. There was supposed to be a member vote on this in June before any DA would be lodged. But when the vote was postponed (because Mirvac were stalling) Mirvac just went ahead anyway and lodged the DA. They had not even committed to a Development Management Agreement with City Tatts when they lodged it.
There is no doubt whatsoever – the proposed development at City Tatts is the result of a sustained conspiracy to obtain a financial advantage by deception.
City Tatts Information Desk