Proposed million dollar Waikato tavern without a plan

Monday, 13 May 2019

It's feared pokie machines will be the main income stream of two proposed Tokoroa taverns (file photo).

A million dollar investment without a business plan could be the downfall of a group of businessmen hoping to reopen a liquidated Tokoroa club as a tavern.

A group of 27 shareholders and five directors are attempting to open a tavern, set to be called Nexus Wine and Cafe, in the former Pockets 8 Ball Club premises in Bridge St.

The venue's bar is being doubled in size with plans to do the same with the kitchen, decor has been changed, roofing redone, and fire safety and alarms systems upgraded. If the Department of Internal Affairs approves,it will also retain Pockets' 18 pokie machines on behalf of the Tokoroa Club, which is borrowing $160,000 to purchase them.

Tokoroa's former Pockets 8 Ball Club in Bridge St which was put into liquidation in 2018.

Under law pokie machines can't be over 49 per cent of a tavern's income stream but an objection to the venue gaining a liquor licence from longtime anti pokie advocate Colin Bridle has revealed no business plan is in place to insure that's the case.

Colin Bridle outside the former Pockets 8 Ball Shotz outlet which could be reopened as a tavern.

* DIA gambling merger delays 'to blame' for memorial club's liquidation

* South Waikato gaming club's demise not voluntary**

The revelation came during a South Waikato District Licensing Committee hearing recently to determine whether or not the premises should be granted an on-licence. It was chaired by independent chair Murray Clearwater in conjunction with councillors Jeff Gash and Adrienne Bell.

Bridle's lawyer Dr Grant Hewison said it had led Bridle to believe the venue would be propped up by the pokies.

'In terms of Mr Bridle's objection he questioned whether there was a business plan, budget or document that would give some comfort to the committee of where the various revenue streams would come from for the operation of Nexus.

'I couldn't find anything in [the] evidence. I just wonder if the directors have sat down and prepared a business plan and prepared a budget that indicates what revenue will need to be produced to cover the cost of the purchase of the land and buildings and so forth?' he said.

Despite the hefty investment director Karen Forbes said no such discussion had been had.

'We haven't at this stage,' she said.

Hewison thought it odd.

'It is extremely unusual for a group of business people…to invest $1 million in a business without a business plan or without any budget of how they are going to get a return on their investment,' he said.

Forbes defended not having done so.

'That is something we will get done but we have not done yet.

Dr Grant Hewison is acting for longtime anti pokie advocate Colin Bridle.

'Nexus started with $1 million in the bank contributed by the shareholders. The premises at 38-44 Bridge St is freehold,[ there has been] no borrowing by Nexus at all.

'We had a significant amount of working capital to not only complete the improvements we are doing but also once we get up and running we will have working capital to get the business going,' she said.

Hewison said it was information the committee should have before making a decision.

'Mr Bridle's… concern is that [the revenue stream] will primarily be coming from the 18 gambling machines.

'A budget or a sense or what this business will have as revenue streams from alcohol and food would be appropriate for [the committee] to ask for.

'It is an important part of the picture in terms of the overall decision…about whether the premises can be given a licence.'

But the applicants' lawyer Robert Davies said due to the business not having traded yet there was no way to provide accurate figures.

'If it was a renewal it would be a different story. It is always at renewal where the information in question can be verified.

'My client will have a sense that the business is financially viable or presumably wouldn't have thrown $1 million at it but isn't yet in a position to provide audited accounts because there simply aren't any,' he said.

The committee agreed with Hewison that the information should be provided and gave the applicant until May 20 to submit it. Its decision on whether or not to grant the licence was deferred.

Bridle also objected to Kina's Sports Bar, formerly known as Pockets 8 Ball Club's Shotz outlet in Mannering St, gaining an on-licence.

Director and shareholder John McKeany was also unable to produce a business plan stating it was 'in his head'.

The committee also requested it be submitted and deferred its decision.