An informed decision? The questions ATC members still want answered ahead of the Rosehill vote

While the Australian Turf Club has sent out its case for its members to vote on the sale of Rosehill racecourse, a host of questions remain unanswered. The Straight asked chairman Peter McGauran many of these in a detailed interview. Some were answered but, others he concedes, won’t be resolved until after April 3.

Peter McGauran has sat at the centre of a racing and political firestorm for the better part of 15 months, ever since the Australian Turf Club (ATC) chairman stood next to NSW Premier Chris Minns as he described the sale of Rosehill for housing as a “once-in-a-generation” opportunity for Sydney.

He didn’t need the Premier to remind him that this was an extraordinary moment for the ATC. But the intervening time has produced a cocktail of drama, accusations and upheaval that not even as experienced a political hand as McGauran could have anticipated.

“I wish this was a normal property acquisition debate, and we could have built a business case, sought input from stakeholders, and consulted widely with members,” McGauran told The Straight.

“But the actual fact is, we were unable to do so because of the unsolicited proposal process. The cart was before the horse, and it’s been incredibly frustrating that we’re governed by secrecy constraints with the government throughout.

“And it’s not how you would want an issue of such magnitude to be put to members, but it’s the nature of a property deal with the government, where propriety and where probity and integrity has to be guaranteed.”

That excuse for the disjointed and opaque nature of the Rosehill process is unlikely to wash well with McGauran’s critics, of which there are many.

The chairman has become the lightning rod for criticism from the various groups opposed to the sale. The Save Rosehill group has twice tried to depose him as chairman and twice been thwarted.

The former federal politician survived to do what he promised on that December day at Rosehill, presenting the case for the disposal of Rosehill racecourse to the members. That will take place on April 3 at an extraordinary general meeting of the ATC at Randwick.

It has been a long and winding road of proposals and ideas, and when the ATC’s final case to members landed in inboxes last week ahead of the vote, it wasn’t quite the definitive plan that most had hoped for.

It did make a couple of things clear. The first was the asking price, saying it would accept no less than $5 billion from the government for the purchase of the site, the second was that the money would be paid either up front, or in full over 15 years.

The various valuations, which sat between $1.6 billion and $23 billion over the course of the last year, had been a cause for concern for members. So too had the time required in order to elicit that value.

Are the ATC members suitably informed?

McGauran said the members now had answers to both of those questions to make an informed vote on April 3.

“All along I’ve said that we won’t be going to a vote until members can make an informed decision. Now they can do so,” he said.

“There is a firm price put on the sale, unlike the various conflicting valuations. And if the government doesn’t accept the price, then there is no sale. That is a very simple decision for members to make once they’ve absorbed the admittedly complex aspects of the proposal.”

In its notice of meeting the ATC also sought to clarify a number of other aspects, a $1.9 billion plan to revamp Randwick, Warwick Farm and Canterbury racecourses as well as fund the acquisition and building of a replacement for Rosehill.

But there are also a host of unanswered questions, among them the site of the fourth racecourse. McGauran doesn’t concede it, but members appear required to take a substantial leap of faith on ATC’s planning when they go to vote next month.

“You can’t expect for the club on April the 4th to have all of the details, given it’s a decade-long infrastructure project that will involve many stakeholder groups,” the chairman said.

“We will have the input of trainers, jockeys, owners, members and breeders. There might be ideas from them that we haven’t even thought of. The simple fact is we can’t proceed with all of the detailed planning without approval of the $5 billion offer.”

Will the government meet the asking price?

The other major query is the likelihood of the government stumping up the required funds. The strategy of putting up a minimum price before the ATC is even at the negotiation stage has raised eyebrows.

McGauran described Minns’ reaction to the ATC’s proposal as “very encouraging”. The Premier had said he won’t be looking at the proposal until the members approve it and that he expected the negotiations would likely be “long and laborious”.

The ATC may have felt it has run a marathon over this Rosehill proposal but Minns’ reaction indicates that it will take considerably more stamina to see it out. McGauran says he ready for that test.

“This is the biggest property transaction in the history of Sydney. It’s 62 hectares, which have ramifications for Randwick, Canterbury, Warwick Farm and a new racing and training centre,” he said.

What is the involvement of Racing NSW?

Given those ramifications, one would think that the role of Racing NSW would be crucial. But the hands-off approach of those at Druitt Street, especially since the idea of the Brickpit site went belly-up, has been intriguing.

Underlying this there have been suggestions that there has been a falling out between McGauran and Racing NSW chief executive Peter V’landys during the past year.

“I’ve had no conversations with Mr V’landys,” McGauran said. “But Racing NSW has formally had input into the valuation of Rosehill, which was taken into account by the board in setting the figure of $5 billion.

“We have provided Racing NSW with the appropriate documentation at the crucial stages, given that it’s a regulator, and they have had no objection to the proposal coming forward to members in this fashion.”

Who gets the money?

Racing NSW’s role in the whole process has been a source of concern for critics of the proposal, especially when it comes to who will derive the financial benefit for any sale of Rosehill.

From early on in the process, V’landys and former chairman Russell Balding raised with government their concerns over the ATC’s ability to manage the funds, while notes from a Racing NSW board meeting in November 2023 stated it wanted “oversite (sic) of the majority of the proceeds of the sale”.

McGauran is unequivocal that it will be the ATC’s money to manage, and the regulator won’t control the funds of any sale.

“All of it will be retained by the ATC. And we’ve published a summary of one future fund investment operation,” he said.

“There are other models we could consider, but the proceeds are taken as an endowment for the ATC. We will be independently responsible for the $5 billion.”

How will the ATC execute $1.9 billion in projects?

The other challenge is, assuming the money is paid in instalments, how will the ATC execute $1.9 billion in infrastructure works without the money in the bank to start with?

McGauran said that as part of any deal, the government would need to fund those capital infrastructure investments over the first decade, while the remaining $3 billion would then be paid over the remaining five years.

“To be able to put an affordable figure to the government, the length of the repayment period was crucial,” he said.

Peter McGauran and Steve McMahon — *Australian Turf Club chairman Peter McGauran and senior executive Steve McMahon appearing before a NSW Parliamentary inquiry into the proposed sale of Rosehill. (Screenshot: NSW Parliament)*

“If they had to write a cheque for $5 billion up front, then forget it. But spread over 15 years, whereby they can then begin to recover some of their investment from possibly year 10 onwards, was appealing to them.”

Why would the government agree to such terms? McGauran said the potential upside from its point of view could see the government realise the full $20 billion valuation in time.

“The ATC is not a property developer, and we weren’t going to take all the contingent risks of a 40-year development, a 40-year time period,” he said.

“Whereas for governments, they’re well used to and geared up for infrastructure projects stretching over 30, 40 years – airports, toll roads, and so on. They can manage 40-year projects. The private sector cannot.”

Given the ATC has named its only possible buyer, it gives the NSW government enormous bargaining power. However, the chairman believes the ATC holds the whip hand.

He said if the government was to attempt to “claw back or gouge on any super profits, tax, or contribution to the metro, then it may not proceed”.

“When we move into stage three, there will be some non-negotiable aspects of the proposal for the ATC,” he said.

Where will the replacement racecourse be?

Arguably, the biggest unresolved question for members is the likelihood of a replacement for Rosehill. Under any deal, the current site would be slated for closure to training in three years and racing in six years.

After 15 months of speculation over various western Sydney locations, including the ill-fated Brickpit (racing) and Horsley Park (training) locations, the ATC has told members it has two possible sites in mind, one to the east of the current Rosehill site and one at a yet to be disclosed site at Penrith.

“ … it’s not how you would want an issue of such magnitude to be put to members, but it’s the nature of a property deal with the government, where propriety and where probity and integrity has to be guaranteed” – Australian Turf Club chairman Peter McGauran

Of all that has been discussed about Rosehill alternatives over the past 15 months, including a lengthy parliamentary inquiry, the prospect of a simple move next door, presumably on land not suitable for housing development and further away from the metro, had not been widely canvassed.

McGauran said “a number” of sites have been identified but there are “commercial reasons” why members don’t have full details to vote on, including that you wouldn’t conduct negotiations in public.

Could Warwick Farm be a Group 1 track once again?

One thing is for sure, Warwick Farm is firmly back in favour to become a Group 1 standard track, despite both V’landys and Racing NSW chair Saranne Cooke expressing their misgivings during the Rosehill inquiry.

Former AJC chairman David Hall told the inquiry that one-in-100-year flood event studies had been conducted at Warwick Farm and there was no capacity to expand the track.

“It is bound by, on the one side, the river, and, on the other side, by the Hume Highway. It can never be made into a quality Group 1 track to carry a burden that would be placed upon it if Rosehill were sold,” Hall said.

Group 1-winning trainers Gai Waterhouse and John O’Shea also questioned whether Warwick Farm could ever be transformed into a Group 1 standard track.

But the ATC has now made a refurbishment of the neglected western suburban track as a key plank to its pitch to members.

“We have certainly committed to razing Warwick Farm to the ground,” McGauran said.

“Everything goes, including the grandstands. And we have a magnificent new track there with world-class facilities. So that Group 1 racing can return to this western Sydney racecourse.

“It has been the most neglected racecourse by successive ATC committees over 50 years. It will be restored to a glory it had at its commencement in such a picturesque site.”

Given that the former chief executive of Liverpool City Council told the Rosehill inquiry that the ATC had not seen fit to paint the external fence at Warwick Farm over the past decade, it is quite a turn of events.

What about the voting process?

Since announcing the two resolutions last week, the ATC’s voting process has come under fire from opponents, who say it is designed to favour the chairman’s view that both should be passed.

The club itself has admitted it could have been clearer about a legal process that most of the 11,000 members will not be familiar with. That last time the ATC had director elections, in November last year, less than 20 per cent bothered to vote.

McGauran, who has preferred to deal directly with the membership up until now, has been pressing his case through the media. He reiterated his belief that the members have everything they need to make an informed vote.

“I’m confident that members have the information and will make a considered choice, despite some of the bells and whistles surrounding the debate. And I’m hopeful that they’ll see both the financial reality and the vision of an entirely recast and renewed ATC,” he said.

What if the vote doesn’t go the way he wants?

“The decision is final, and I will happily accept the vote of members,” McGauran said, quickly transferring back into campaign mode.

“The government wants this to happen. And the government has expressed an interest in acquiring the site,” he said.

“I don’t believe there’s anything we can’t solve with the government, once empowered by the members. And then the vision of the ATC and Sydney racing will be realised.”