194 Pitt Street Hoax: 2 – The cost to the ClubPosted: July 31, 2017
194 Pitt Street has been a millstone for City Tatts since 2007
It has been the biggest single drain on the Club’s finances since then.
Back in 2007 City Tatts owed about $10 million to the bank, which it could comfortably repay over time.
194 Pitt Street cost $9,250,000, plus $500,000 in stamp duty, and the Committee borrowed the entire amount. The annual interest bill was $740,000 and with other building expenses the total holding cost was $800,000 every year.
But because the building never produced any additional income, the $800,000 had to come out of existing earnings. So not only were they unable to repay any of the $10 million borrowed for 194, they could no longer repay the existing bank loans – because the entire profits of the Club were now going in interest.
Without 194 the existing bank loans would be repaid by now.
And that only begins to describe the disaster.
The building itself had serious problems that were bound to be very expensive to fix. Heritage and fire requirements were just some of the major issues. The fact that 7 out of the 8 floors are still idle after 9 years is the best indication of the work required.
Most of this was concealed from members, and the portion that was mentioned was downplayed.
City Tatts Information Desk