News We’re going to Dingleyland! Construction to begin.

[Strapping Young Lad]

 

[ahhhhhh]

I personally love to have depreciatable assets as it means fat returns at tax time.

Say that Caroline Springs place start generating big biscuits then having a depriecatable asset such as Dingley will mean no tax.

There is always risk Ordivican, all you can do is lay out the best plan possible to navigate.

Standing still means death, we must continue to forge ahead or we will revisit 96 at some stage regardless.

 

[Hawkinspired]

Yeah but surely that doesn't include separate entities such as hotels, pubs etc.

 

[ahhhhhh]

Yeah but surely that doesn't include separate entities such as hotels, pubs etc.

 

[Pessimistic]

A football clubs training base has more value as that than as anything else. eg once Hawks leave waverley, unless another footy club wants to move in, it has less value. It didn't cost much to move in, so no probs. Just that its paper valuation may suffer.

 

[Londoner86]

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Bloody tax accountants, they have all the answers!

 

[Ordovician]

Not sure you've got a full grasp of accounting

I don't and I have struggled with this crap doing company tax returns which drive me crazy, although a trust tax return is far worse.

However, the issue is not one of accounting which tries to represent the financial position of an entity, but one of the underlying of economic reality.

This Dingley adventure is an issue of investment and that is something that I am across.

Buildings, infrastructure etc. degrades with time just like say a car does. At the end of the day you pour money into building these facilities and twenty years later they are not worth anything like the amount of money one expended creating them and if you want to bring them back up to scratch you a facing a huge bill, a lot like the situation docklands stadium is currently facing where there is an upgrade versus demolish decision to be faced.

In building a facility like Dingley the HFC is going to incur massive upfront costs in just building the thing about 80 million just for stage one, large recurrent costs in just running something that big e.g. power, cleaning etc., and medium term quite significant costs in ad hoc repairs, programed maintenance, and ad hoc improvements.

Unfortunately the HFC as no viable alternative to this if it wishes to keep up with the other richer clubs e.g. Weagles, crows pies etc., in the training base arms race.

So unless the club can come up with clever ways to make parts of the site cash flow positive it will impose a significant financial burden on the club.

 

[Brishawk]

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Correct me if I am wrong but CS still has to pay the relevant taxes from pokies revenue which can be offset in part by making 'donations' to the Hawthorn football club? Probably don't have it quite right but I seem to recall that there was a unique tax benefit for Footy clubs which makes pokies so appealing.

 

[Qlder_19]

In the plans there is going to be a 1000 seat auditorium which can be used to generate income.

 

[Brishawk]

I not sure you have a much of a grasp of economic reality.

Buildings, infrastructure etc. degrades with time just like say a car does. At the end of the day you pour money into building these facilities and twenty years later they are not worth anything like the amount of money one expended creating them and itf you want to bring them back up to scratch you a facing a huge bill a lot like the docklands stadium.

In building a facility like Dingley the HFC is going to incur massive upfront costs in just building the thing about 80 just for stage one, large recurrent costs in just running something that big e.g. power, cleaning etc., and medium term quite significant costs in ad hoc repairs, programed maintenance, and ad hoc improvements.

Unfortunately the HFC as no viable alternative to this if it wishes to keep up with the other richer clubs e.g. Weagles, crows pies etc., in the training base arms race.

So unless the club can come up with clever ways to make parts of the site cash flow positive it will impose a huge financial burden on the club.

Absolute necessity. Most clubs seem to make the facilities 'mixed use' to some degree but we then put at risk the ability to close training to spies. Be interesting to see how the club go about it.

 

[Brishawk]

In the plans there is going to be a 1000 seat auditorium which can be used to generate income.

Club B&Fs etc. will no doubt be obliged to be held there

 

[Qlder_19]

yes and it maybe attractive for another functions to be held there instead of crown

 

[Ordovician]

Whilst buildings depreciate the land should typically appreciate.

I have no idea what the green wedge zoning does to this...

It will still appreciate but its relative appreciation compared to unencumbered land in the area is very difficult to determine because of the limited uses allowed under that zoning. In fact by building the complex we are encumbering the land for other uses should we ever wish to sell it.

The green wedge zone is reason why we can afford to by +20 hectares for around 7 million. Without he zoning the land would be worth about +100 million for residential development for single dwellings on 500 sq m, which would exclude the costs of building roads, drainage, power etc. to turn it into a residential estate. If it were zoned commercial/industrial who knows how much more it could fetch.

If the land was ever rezoned to allow residential or commercial use and the Liberals do that sort of slimebag crap in Victoria, to pour hundreds of millions into the pockets of their mates, then the club would be looking at a serious windfall.

 

[Gold Member]

Correct me if I'm wrong but all the value lies with the land title of which there would be $xx million of capital improvements and should not be treated as 2 separate assets, ie to apply depreciation to the building.

We can't exactly sell the building for cashflow but keep the land..

 

[Davo23]

It will still appreciate but its relative appreciation compared to unencumbered land in the area is very difficult to determine because of the limited uses allowed under that zoning. In fact by building the complex we are encumbering the land for other uses should we ever wish to sell it.

The green wedge zone is reason why we can afford to by +20 hectares for around 7 million. Without he zoning the land would be worth about 100 million for residential development for single dwellings on 500 sq m, which would include less the costs of building roads, drainage, power etc. to turn it into a residential estate. If it were zoned commercial/industrial who knows how much more it could fetch.

If the land was ever rezoned to allow residential or commercial use and the Liberals do that sort of slimebag scrap in Victoria to pour hundreds of millions into the pockets of their mates, then the club would be looking at a serious windfall.

I stand to be corrected by aaaaah, but the principle is that buildings are not depreciated because the land value increase usually matches or exceeds any depreciation.

You can see that in a residential house: your purchase price 10 years ago may have been $250,00 but the property is now worth $750,000 because the land value has soared while the house itself is 10 years older.

Depreciation is only an accounting entry. Businesses usually plan for building renovation/improvement by budgeting for it, and having a reserve set aside for the future.

It's not all doom and gloom!

 

[Brishawk]

Correct me if I'm wrong but all the value lies with the land title of which there would be $xx million of capital improvements and should not be treated as 2 separate assets, ie to apply depreciation to the building.

We can't exactly sell the building for cashflow but keep the land..

How about if we lease the building and keep the land

 

[Dave Id]

The Brisbane Lions don't seem to be doing too well.
Perhaps they would like to relocate.
Sure the AFL would throw money at the idea

 

[Gold Member]

How about if we lease the building and keep the land

LoL. Stitch up the Saints when we need something bigger!

What the hell are they gonna put in the trophy cabinet? The Streak!

 

[rdhopkins2]

Sell the land to be the AFL in 30yrs to build a suburban stadium. Etihad will be sold to expand CBD & residential towers and Melbourne suburbs will stretch to Drouin.

Or a rich ME investor for a falconry, complete with rehabilitation and education centre


Anyway that's all a long way off.

 

[Gralin]

Sell the land to be the AFL in 30yrs to build a suburban stadium. Etihad will be sold to expand CBD & residential towers and Melbourne suburbs will stretch to Drouin.

Or a rich ME investor for a falconry, complete with rehabilitation and education centre


Anyway that's all a long way off.

If they are looking to sell in 30 years they did something very wrong

 

[Ordovician]

I stand to be corrected by aaaaah, but the principle is that buildings are not depreciated because the land value increase usually matches or exceeds any depreciation.

Cruising for a bruising on that one.

 

[Strapping Young Lad]

An announcement on our plans for Dingley should be just around the corner.

I was hopeful that that was what the "get ready" was from the club site, but it was not to be.

 

[Dinner Plate]

An announcement on our plans for Dingley should be just around the corner.

A little birdie tells me the club has approval to rename the whole suburb "Winning-ley".

 

[Pessimistic]

Still think they should take over Sandown with a view to our own stadium one day

 

[Gold Member]

 

[Frankston Rover]