Sandys 360 fights for survival
How Sandys 360 losses piled up
Sandys 360s unaudited financial statements up to the end of 2011 are available on public record.
They show combined deficits of $1.4 million for 2009 and 2010, but a surplus of some $121,331 in 2011, with help from a Government grant.
The facility was first built by Sandys Secondary Trustees, who still hold its mortgage.
According to the 2011 financial statements, the most recent that are publicly available: Income to pay this mortgage is to be generated from the operations of the facility, but since its inception [Sandys 360] has been unable to meet its commitment to its trustees by way of rent. Negotiations between Government and HSBC resulted in Government grants to Sandys 360 to assist with payments to the trustees for the outstanding payments and interest due.
In the 2012/13 Budget, Government granted $2 million to the facility. According to one source, most of that grant has been paid in instalments, adding up to roughly $1.5 million.
Government support for the complex goes back to 2007, the year the project broke ground — with a $1 million Government grant. It opened two years later at a reported total cost of $10.1 million.
Its unaudited statements for the calendar year of 2011 also show a one-off payment of $1.61 million described as special Bermuda Government finance to trustee debt reduction.
The facilitys income has consistently fallen short of its expenses.
Rent expenses and debt payments together totalled $1.05 million for 2011, while overall operating expenses were $1.34 million.
Meanwhile, income statements for the calendar year of 2010 show Sandys 360 losing $672,000. Operating expenses were reportedly $1.33 million.
And for 2009, Sandys 360 showed a deficit of $723,063.
The organisation lost $1.05 million in 2008 — the same year as a customs rebate was issued by the Bermuda Government to the tune of $252,000, covering materials for contractors, while it was being built.
Including the rebate for architects and engineering, the contributions from the taxpayer totalled $362,101 in 2008.
Donations have consistently held strong.
Between $60,000 from Willowbank, $275,000 from the Ace Foundation, $41,667 from the Bank of Bermuda Foundation and $30,000 given by Argus Insurance, corporate donations totalled $406,667 in 2008.
In 2009, Sandys 360 reported $386,600 in corporate donations, and in 2010 it got $290,000 in corporate grants, plus $395,000 in public-private donations.
Wages and benefits expenses for Sandys 360 were $94,834 for 2009, $542,181 for 2010, and $121,331 for 2011.
The statements show a steady effort to pay off debts, plus some revenue from membership, programme fees, shop sales and rentals.
The most recent statements showed a surplus overall of $121,331 for the end of 2011.
The Sandys 360 complex includes a 24-hour gym, NBA-style basketball court and 25-metre indoor pool.
Cash-strapped sports complex Sandys 360 is struggling to pay its bills, but according to its management has no intention of closing down.
The Somerset facility opened to fanfare in 2009 but has since had trouble securing donations after falling behind on its audited financial statements.
Managing director Melvyn Bassett yesterday admitted the centre had struggled financially from the time that we opened our doors.
Huge monthly expenses salaries and electricity costs of about $40,000 and $10,000 each compounded the problem.
The facility is also facing pressure from HSBC Bermuda to repay its loans.
However Dr Bassett said the facility has reinvented itself in response to its difficulties; a legal restructuring in January saw Sandys 360 incorporated.
A new board of directors is expected to be appointed officially on July 1.
Following that, Dr Bassett said: A new management and financial structure and governance will be the first order of that new board.
The facility benefited from a $2 million Budget grant last year under the Progressive Labour Party administration.
Sources close to the facility said that agreement was under review by the new Government.
The Ministry of Public Works allocated $2 million to Sandys 360 in the 2013/14 Budget.
Asked if that funding was guaranteed, a spokesman said: As it was previously stated in the Ministry of Public Works Budget brief, although the funding has been allocated for a number of capital projects such as Sandys 360, the Minister has stated that he is doing an extensive review on all capital expenditure to determine how public funds are to be used going forward.
This will include meetings with the parties and stakeholders affected before any final decisions are taken.
Asked if the grant might be pulled, Dr Bassett replied: For political reasons, its not likely they would take it away.
He highlighted Sandys 360s value to the community and its placement on land owned by Government and Sandys Secondary Middle School trustees, as factors that would contribute to its eventual success.
Its not in their best interests to pull the blocks out from under Sandys 360, he said.
I think with HSBC we are safe. They are really putting the screws on us to come up with a sustainability plan.
I dont think they understand that if you go belly-up and there is a foreclosure of Sandys 360 — what happens? Government takes over the Sandys 360 building? It becomes a nasty mess because structurally, Sandys 360 is a unique entity. It sits on Government property and on property owned by the trustees. So its a complicated arrangement.
As long as there is a healthy marriage, everyones happy. But if there were ever a divorce, pardon my saying, it would be one hell of a divorce.
He explained that the sports complexs complicated arrangement with Government-aided Sandys Secondary Middle School made a restructure necessary.
Would-be donors found the connection confusing, he said.
Corporate donors had also been scared off because the centre had fallen behind on its audits as it evolved. Dr Bassett anticipated that the facility would be ready for audit by mid-June.
Asked if the centre was in any danger of closing down, Dr Bassett replied: We hope not.
Every day we go in on a wing and a prayer. When we started, we didnt have any money. We find a dollar here and a dollar there. One of the major challenges we have had is struggling to get our audits. With those, funding will come.
Some strong corporate backing had continued, he added. Financial firm Deloitte & Touche was helping Sandys 360 prepare for auditing, and big hitters like XL Group had recently pledged donations.
A reduction in operating expenses is also anticipated and Sandys 360 will solicit direct sponsorship for its community programmes moving forward rather than companies handing over money blindly, he said.
We just have to get through this challenging period.
Useful website: www.sandys360.bm
Take Our Poll
- What will be the best way to create needed new jobs?
- Attract more international companies
- Grow the population
- Reduce the number of non-Bermudian workers
- Develop new business sectors other than international business and tourism
- Retrain the workforce
- Total Votes: 5529
- Poll Archive