A vote of no confidence is appropriate
It might be effective to deliver to the members a bi-lingual email, possibly supported by a web site, which focuses on an easily understood and cohesive message. This would question if the BOG has to date served the interests of the members and if it should be entrusted with a high risk and expensive redevelopment project which could seriously threaten the future existance of the Club. This could be framed as a question:
"Are you willing to entrust the future of the Club to a Board of Governors and management who have demonstrated a disregard for financial responsibility? The payroll budget for 2006 is Y2.2Bn.($19 million)which is 70% of Operating Revenue. The cost of the average full-time employee is Y10 million ($85 thousand)and there are many. Shouldn't putting TAC's house in order precede any redevelopment plans? Do you really feel that you now getting excellent value for your membership costs?"
"The propaganda effort endorsed by the BOG to steam-roll the vote is worthy of tactics used by a Banana Republic. The options have not been fairly presented. If you have doubts about the wisdom of what has been termed by some as "risky and reckless" than you should vote "no". A "no" vote will serve as a strong message that the BOG should focus on delivering value to members and not on expensive, high risk, grandiose projects. The track record of your BOG and management is not impressive. Should the redevelopment go ahead and should it go badly, no one on the BOG, management or the committees will be held accountable; no one but you. Please think carefully before you vote."
posted by Unlock at 6:58 AM
15 Comments:
I, for one, look forward to seeing the promised COMPLETE financial details of the redevelopment project that will be available before the next Town Hall Meeting.
This should be put next to the current balance sheet,P&L and projected operating budget to get a balanced (hopefully) view of the issues and the risk.
Whilst we seem to have non-recourse decision making; given what I understand, I doubt whether the big picture numbers can be achieved with non-recourse financing....
I am not sure what magic must take place to pay for a USD 150m redevelopment with USD 25m in liquid assets and an 'under-negotiation' lease payment of USD 100m.
On my calculator, the net (after loan repayment) value of Azabu Towers where the new club will sit must carry USD50m in debt.
The only other collateral to fund this would be the value of the land on which the club currently sits, which returns to club ownership so far into the future as to be un-fundable.
I hope the figures will show my calculator to be defective.
If you want to win support for a vote of no confidence, and you wish to quote figures like payroll as 70% of revenue and average employment costs of Yen 10 million, then may I respectfully suggest that you tell the reader what the targets should be for an institution like TAC - in other words quantify the waste and excess.
Then you can ask members if they want to entrust this management and BofG to run a US$ 150 million redevelopment project [if indeed that is the global cost].
I think you can also point out that most of us will know from daily experience that TAC F&B prices are no steal when compared with "the street", and yet TAC runs these outlets at a loss - the key factor being staffing costs I believe. So if the club takes on serious debt commitments to redevelop, with no apparent commitment to reduce staffing costs, when can members ever expect a reasonable deal ?
Oh sure, I know - there is no debt : the development partner eats that as part of the overall 50 year plan. But that has not been quantified - has yet to be spelled out in detail, the sort of detail that my accountants are looking forward to dissecting when the brochure is produced just before the town hall meetings and the vote........
Talk about a stitch up.
While I understand the concerns regarding the opacity of the financial implications of this project, I am also somewhat amazed by the careless, ad hominem attacks being leveled at the BOG and the staff. My friends, I am blessed with a greater than normal helping of cynicism as regards humanity and its motives, but I have yet to see any evidence, in any of the proceedings regarding the redevelopment project, that leads me to believe members of any committees involved, nor the BOG, are acting out of hubris or self-interest. I can assure you that members of the finance committee (yes) and its advisors on this redevelopment project have gone through every conceivable scenario regarding the financial implications of this project. None appears quite as bleak as your Titanic metaphor. I am quite certain that the details will be released in advance of the vote and you will have the opportunity to scrutinize and ask difficult questions, which is every bit our right. I hasten to point out that the self-same committee members whom you decry as corrupt and careless have been asking precisely these questions for several years, and have at last come up with a workable plan. There are a couple of issues I would like to address that were mentioned in other posts. Pardon the narrative breakdown; I need to go bullet point here so that I may get back to work!
1. To assert that the TMT partnership is somehow orchestrating a sinister plot to usurp title to any or all of the land is rather ridiculous. They would forsake any possibility of doing business with a foreign firm again in the future in so doing.
2. Anyone who has ever worked on a construction project in Japan knows that the general contractor shoulders full financial responsibility for schedule over-runs. So the “anyone who has ever built a house …” analogy used in a previous post is an oversimplification at best.
3. There is a real estate bubble occurring in Japan right now and in Minato-ku in particular. Speculative developers are purchasing any and all available, developable land at extraordinary premiums to market value. This is one of the reasons that TMT is willing to enter into a partnership with TAC on economic terms that while fair, are certainly not the most advantageous to them. There are simply very few places left in Minato-ku to buy, and certainly NONE on the scale one would need to construct a TAC replacement. If there was, it would be priced far beyond our reach. Any assertion to the contrary reveals a lack of understanding of the Tokyo real estate market, which is precisely why the committees involved in the study have real estate professionals on board. Do you really think this alternative went uninvestigated? Do you have any idea what one tsubo of land costs in Minato-ku right now?
4. As counter-intuitive as it may seem, I can assure you that the temporary facility is by far more cost effective than staging a redevelopment on the existing site without interrupting club operations. I could spend another hour typing to try and explain, but I really want to hit one more point before I run, the elephant in the room that no one seems inclined to address, and that is the reality that
5. the existing facility passed into gentle obsolescence about two decades ago, and now is a downright embarrassment. The building itself has withstood decades of seismic activity admirably, but there is no actuarial possibility that the structural integrity has not been compromised in the process. The building has reached a state of terminal depreciation. To simply slap on a new coat of paint isn’t going to fix the problem. Virtually all of the critical building systems need to be replaced. We would need to spend upwards of 40 million USD in order to make improvements that none of us would ever see! None of the recurrent member complaints would be addressed, the two largest of which are lack of parking and lack of separation between family areas and client entertainment areas. On a personal note, the last one is huge for me, and one of the reasons I delayed joining for several years. I have a right to bring clients to lunch and not jockey for space with flip-flop clad six year olds shrieking on their way into the garden café. My clients should be able to wait for me in the reception area without feeling like they are on the set of the Bozo the Clown show.
There were a few more points I wanted to cover, but, alas, I must go. Thank you for reading this far. Have a splendid day.
While the cause is admirable, the message doesn’t seem to be reaching many people. Wouldn’t whoever writes this blog be more effective as a vocal and proactive campaigner for the cause. I get the distinct feeling that all these posts and comments are written by the same disgruntled person! Is it by chance that Greg …. can’t recall his surname but I believe he’s a bitter former President of the TAC – you know, the one who looks like Krusty the Clown from the Simpsons?
Sorry to lose you in medias res.Prima facie est mirabile visu.
As an erstwhile silent observer, it seems to me that the purpose of this blog is to create a platform for debate that is not being readily provided by the club itself.
The comments have wandered off track at certain junctures but some very valid questions have been raised, which, as yet, remain unanswered.
The ad hominem attacks are unnecessary but can probably be better understood when put into an historical context.
The reality is that the club and its management has a less than stellar track record when it comes to business acumen, fiscal rectitude and in some cases even propriety.
The promise of a better performance next week can secure limited traction when stood alongside the failings of the past.
I have no reason to doubt your assertion that the club infrastructure has reached its use-by date. Clearly it has reached retiremant age and has not had enough spent on it over the years.
The question being asked, in a somwhat disjointed and antagonistic fashion perhaps, is why has it worn out with insufficient assets to be in total control of its future.
The real estate bubble and the value of a tsubo of land in Minato-ku is irrelevant to the basic argument. Where it is relevant is that it provides a window of opportunity, a financial 'get out of jail free card.'
What would be counterintuitive is to expect that the current price of land in Minato-ku will allow the club to turn sow's ear into a silk purse given its business record.
Someone has to convince me that 'the club', given it's track record and management structure, is capable of completing this project without going bankrupt.
Simple as that.
Kudos to the person who wrote the lengthy third comment above. Finally, someone with reasonable sense and a true knowledge about how things really work in Tokyo, especially in real estate, has chimed in and provided some clarity. As I have been working in commercial real estate for more than 20 years, I can state without question that the proposed plan is clearly the best solution with regard to cost, design and functionality. Anyone claiming something to the contrary is making claims based a lot more on emotion than facts. Please do some real homework and get your facts straight before making false claims and stirring people up needlessly.
Bozo the Clown...Krusty the Clown.
What a circus!
Dear Kudos,
Certainly straight facts would be good.
This does, however, appear to be a debate at cross purposes. You refer to how things really work in Tokyo while others refer to how things really work at TAC.
Are you perhaps suggesting they are comparable?
Yours sincerely
Bozo
This comment has been removed by a blog administrator.
Jerry
After a week in Seoul, your commentary flows like honey on the Chinese loess dust that pervades the peninsular.
It is great to see people suiting up for an open debate.
There are 25 decision makers, 300 perimeter runners but ultimately there are 3,000 voters.
Referendums seldom succeed. You had better make sure the facts ensure it is a vote for a brighter future based upon an unabridged explanation of why the NEW TAC will be better managed than the sheltered workshop we have at the moment.
BTW, whomever referred to Greg...his name is Greg Carley...and I seriously doubt whether he has the interest in participating in this debate any longer.
I can vouch for the fact that he has no involvement whatsoever in this blog....which must be somewhat of a dissappointment to those looking for a pea under the mattress.
Who is that masked man who writes so well and seems to have a few silver bullets ready for Jerry on May 10 and/or 13th?
Why do you think it's only one person? Many of those posting here are very informed and intelligent people with genuine concern regarding the welfare of OUR Club.
We seek only the facts and a balanced set of alternatives. No silver bullets need be fired.
Found out who it is causing all this unnecessary commotion....
www.endeavorcomics.com/largent/lr1.html
As of today the propaganda machine that is the LRPC and Management has shifted up a gear with an e-mail letter to members that all but presents the relocation to Takanawa as a done deal.
Shame on them for this dishonest and slanted piece of communication!
We look forward to the next town hall meetings and the voice of truth finding its way into the ears of members who know nothing but what the propaganda is telling them.
It is interesting that the individuals whom are pro kamikaze come up with attacks on past presidents but do not have the courage themselves to put their name where their handwriting is.
My name is not Greg Carley but Paul Marques and I do have proof of everything I have written and stand by every word.
If the deal is so sweet, why not allow for open debate within the club premises, we dummies can at least put up or shut up.
I respect every individual that has chosen to remain anonymous when that person has not named other individuals directly, however when they do, then should have the decency to name themselves too. I am asking for too much I guess, after all who would want to have their name on this blog and then have us find out that the same name was on one of bills sent to accounting at TAC for one of the fantastic dinners served at the Mandarin Hotel - Nihonbashi for entertaining our architects ( excuse me, business meeting regarding which building Mitsubishi can sell first at members expense).
Shame on you!
Sincerely,
The not Greg Carley but Paul Marques
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