The announcement on Saturday that the North Shore Kart Club was not able to renew its lease to race at Eastern Creek Raceway has surprised many people in our sport and it has raised a number of questions that the Club Committee want to answer for our members.
Why has North Shore Kart Club decided to move away from Eastern Creek Raceway?
It is not so much a decision to move away from Eastern Creek Raceway as not being able to negotiate acceptable terms for a new agreement with the owners of the facility that would give us long term viability as a Club.
This sounds like just more karting politics – is it?
No, it is not. This is about our Club’s financial wellbeing, ensuring a future for our Club and for our members. The rental terms that were offered to us by Eastern Creek Karts would have placed our Club’s survival in jeopardy. It would have been almost impossible for the Club to run a Race Meeting there that did not lose money and it would have most surely spelled the end of the Club.
What were the major sticking points of the negotiations for a new lease?
They fall into three main categories:
- the ongoing financial viability of the Club if we accepted the new financial terms that Eastern Creek Karts were demanding that we pay to hire the Circuit,
- the facilities that Eastern Creek Karts would be providing for our use, with no sign of a facility improvement plan by the owners, and
- the one-sided terms of the lease that they were offering.
The facilities that have been provided under the previous lease have progressively deteriorated or been removed over the years, particularly since construction of the motocross dome was started. Our members who have raced at Eastern Creek over the years know that firsthand. Out of respect for the owners, we won’t go into them in great detail but there aren’t even any suitable toilet facilities, Stewards’ room, Race Secretary office there. We purchased much of the equipment in canteen and used to operate it on Race days, but we have not been allowed to do that since last year.
Eastern Creek Karts were insisting that we pay almost twice as much to hire the track for each race meeting under their proposed lease than we have been paying under the old lease. A rent review is fine, but it shouldn’t double the rent.
What happened to the Lease that North Shore had with the Circuit owners?
The lease that we had for the past 10 years with the Eastern Creek Kart track owners expired on 8 June 2021. The Club has been trying to negotiate the terms of a new lease with the track’s owners since late in 2020.
Those negotiations finally fell apart last Thursday when the Eastern Creek Raceway’s owners refused a request to extend the term of the former lease by a period of 3 months to enable us to continue to try and find the common ground needed to agree on terms for a new lease that would have allowed the Club to continue to use the Eastern Creek Track. All that they could do was demand that KANSW inspect their track this weekend. Simply put, they shut the door on probably their largest single customer of the past decade.
Since the old lease required the Club to provide a large amount of money to Eastern Creek Karts in 2011 for them to resurface the track and that they have received hundreds of thousands of dollars in track rental fees for North Shore Race Meetings since June 2011, as well has probably hundreds of thousands of dollars in private practice fees from our members during that time, we thought a 3-month extension to try and find a solution with them was a reasonable request. Eastern Creek Karts denied that request.
What would staying at Eastern Creek have meant for Race Meeting entry fees?
They would have had to be increased to between $150 and $200 per entry for a Club day. We cannot ask our members to pay that sort of money for a single day race meeting.
Since Eastern Creek Karts decided to also rent the Track to the Wollongong club in 2020, it has become harder and harder to just break even in the cost of running a Race Meeting. The new rent that we would have to pay would have guaranteed that we lost money on every Race Meeting, even though the fees that we pay to Karting Australian NSW for an Organising Permit (and insurance) are the lowest fees in Australia.
In relation to the statement that North Shore Kart Club put out on Saturday, Anna from Eastern Creek Karts has said that “A lot of this Statement is false.” Is it?
No, it is 100% accurate and verifiable. Negotiations effectively ended on Thursday afternoon when the Club received the copy of the email that Anna sent to KANSW (and the Club committee) on behalf of Eastern Creek Karts – see below.
Anna rejected the request to extend the old lease terms for a period of 3 months that could have given more time to try to reach mutually agreeable terms for a new lease.
The President of KANSW wrote to Anna on Thursday as follows:
From: KA NSW President
Sent: Thursday, 24 June 2021 2:40 PM
I thought I should follow up with you briefly after our phone conversations earlier this week and last week in relation to North Shore Kart Club and Eastern Creek Karts.
As previously mentioned KANSW will not be a party to a lease with Eastern Creek Karts. This is a matter for North Shore.
I have also spoken with Karting Australia about the terms of the proposed lease. They have said that they won’t be a party to it either.
They are really confused as to why they would be on a lease for use of a track by an affiliated club. It’s never happened before and it’s not their role in the sport.
They were actually surprised about it because when I brought it up, it was the first that they knew anything about it.
From what I know, I would think that negotiations for renewal of the lease between Eastern Creek and North Shore would take some time to be completed (several months at least.) I think that it would help everything if you could confirm in writing to me that North Shore will be able to continue to organise race meetings at Eastern Creek under the terms that have applied under the lease that has just expired for say the next 3 months. That would give some breathing space for everyone.
If you could let me know by return email if Eastern Creek is prepared to do that, I will let the Club know.
She replied as follows. Comments about the FACTS are highlighted in blue:
Date: Thu, 24 Jun 2021 at 3:32 pm
Subject: RE: Lease
To: KA NSW President
Cc: <secretary@ >; <president@ >, <treasurer@ >
KA who was previously known as Australian Karting Association have always been a part of the agreements. See documents attached to confirm this.
The images that Anna has attached “confirming” as she claims that KA has always been a party to the lease agreement actually confirm that AKA Ltd and prior to that AKA Inc WERE NEVER A PARTY TO THE AGREEMENT.
The images clearly show that Australian Karting Association (NSW) Inc – now known as Karting New South Wales Inc were parties to the lease agreement – Not Karting Australia or AKA Inc. Five lines further into the screenshot of the document dated 8 June 2011, it actually states that Australian Karting Association (NSW) Inc. is a member of AKA Inc.
We do not agree to an extension of the previous lease of 3 months.
The lease is very simple and the terms are very clear should anyone have an issue than rather than ignoring the calls or messages they should talk about it. NSKC have known for more than 6months that there was a cost increase and of the other changes. This was advised when we increased the cost and then returned it to the lower rate. And then at a meeting with Josh and Pam from NSKC in February which Sam failed to attend.
I have sent you evidence of discussions and knowledge of the changes as well.
We need the agreement finalised 5days prior to the race meeting and the track inspection completed by Sunday and the paperwork to us no later than 9am Monday or unfortunately we will be lodging the paper work without the KA inspection and this will leave us no alternative but to cancel practice and race meetings from 1st July 2021 as KA will no longer have a track licence at ECK. This would be an issue for members and it would not be caused by ECK rather by KA/NSKC. The inspection is a matter of urgency and have been requesting this for a long time. I was told it would be done at the last meeting but it was not.
There are many rumours that I would like to abolish but this cant be done without the agreement and the track licence.
I would also like to make the suggestion that better promotion of the club and it’s race meeting may result in better numbers and a better result for the club and KA in general.
I would also appreciate that someone, as I have called many people from KA would return my call!
Anna rejected out of hand, what was an entirely reasonable request for 3 months more time to try to negotiate terms of a new lease that would be acceptable to the Club.
The first call that Anna made to Karting Australia was on Friday 25 June. As this is not an issue that directly involved Karting Australia (as a national governing body) and in the knowledge that it was being handled by North Shore and Karting Australia New South Wales, the call remains unanswered.
Eastern Creek Karts P/L”
Why has the club chosen to stay with KA?
Whilst the split within the sport in NSW has been unfortunate, the general view held by the committee as well as most of our members and others in the sport is that this will be resolved at some time. It is the committee’s view that the national structure and the financial stability of KA along with its delegation by the FIA as the only nationally recognised body for karting in Australia is the best long-term relationship for our Club.
It has been clearly demonstrated that through our affiliation with KANSW and KA, a club is able to offer the lowest cost karting to its members whilst providing access to recognised State and National championships as well as the most comprehensive insurance policy of any similar body in Australia.
Where will the club race now?
We are fortunate to have strong relationships with Newcastle Kart Club and they have agreed to provide a number of race dates for the immediate future if we want to use them.
What about the longer term?
In view of the often strained relationship between the club and Eastern Creek Karts over many years combined with the much higher fees that they have tried to charge the Club from time to time in the last few years, both KANSW and KA thought that this point could be reached at the end of the our lease.
With this in mind they have worked independent of the Club and behind the scenes to explore what other options may exist within and surrounding the Sydney basin if they were ever needed. This work has uncovered a potential long-term relationship that could be formed at another facility. To secure this facility and to allow the club to take advantage of this potential opportunity, KANSW and KA have entered an Agreement with the Track owners that covers KANSW and an affiliated Club’s use of that Race Track and surrounds on a long term basis. An announcement on that will be made shortly.
What does this mean for Club members?
This is the most important thing.
This will give our Club real hope and impetus. The new facility’s owners are rolling out the welcome mat to KANSW, KA and the North Shore Kart Club. They have a plan to further develop their entire facility and our committee is excited by what awaits us. We truly believe that this is a great opportunity for North Shore Kart Club to, in time, retake the mantle of the largest kart club in Australia. We want North Shore Kart Club Race Meetings to become known not just as a great place to race but as a great place to bring the family.
As one of our members, we want you to stay with us as we navigate the next couple of months, and to join with us as we work to make North Shore Kart Club great again and the place where all Sydney karters want to come and race.