Hong Kong property

Some elite Hong Kong sports clubs need only admit a few new members to cover land fee plan

Home Affairs minister argues full premium could threaten their existence, but critics say cash-rich organisations should broaden their access to the public

PUBLISHED : Wednesday, 21 March, 2018, 1:21pm
UPDATED : Wednesday, 21 March, 2018, 11:18pm

Some elite, cash-rich sports clubs in Hong Kong only need to admit as few as three new members to cover a proposed increase in land premiums in a one-off payment for lease renewal, contrary to what the government told the public, a land expert has claimed.

The findings by former surveying and planning sector lawmaker Edward Yiu Chung-yim released on Wednesday came after officials announced a plan to raise the one-off fee – paid every 15 years when private sports clubs renew the leases for 27 sites that they operate – to one-third of the sites’ market values.

The clubs would also need to expand public access to their facilities if they want to renew the leases. Under the plan, they would need to offer up to 30 per cent of their sporting capacity to eligible outside bodies, and partner with sports groups to organise public programmes covering a minimum of 240 hours a month.

But the new rule would not take effect until 2027 because clubs would need more time to collect enough money, the government said.

Officials added that making the clubs pay the sites’ full values would stifle their operations.

These clubs have for years paid only a nominal amount or nothing at all.

A six-month public consultation on the policy is under way.

Yiu estimated the values of 26 sites – as one lease will not expire until 2056 – based on government rating and valuation figures. He found that the clubs operating these sites would need to stump up between HK$1.8 million (US$229,000) and HK$370 million under the plan.

Only 12 clubs have publicly disclosed their membership entrance fees, the former lawmaker said, and these clubs would need to admit between 2.4 and 98 new members to cover the payment.

“I cannot see why the government would allow these clubs to pay only one-third while citizens will have to subsidise two-thirds,” he said.

I cannot see why the government would allow these clubs to pay only one-third while citizens will have to subsidise two-thirds
former lawmaker Edward Yiu

The Royal Hong Kong Yacht Club, for example, would need to pay an estimated HK$5.5 million for one of its three sites. The club has only made the price of its corporate membership publicly available, which is HK$2.3 million. This means the club needs to admit 2.4 more corporate members to cover the payment.

The Craigengower Cricket Club’s payment is estimated at HK$122 million. The club charges HK$450,000 for an individual membership and HK$800,000 for a corporate one, which means it needs to recruit 98 new individual and corporate members to cover the fee.

The 170-hectare Fanling golf course, which has been at the centre of a public outcry to develop the site for housing, would cost the Hong Kong Golf Club HK$370 million in premiums. The club charges HK$16 million for a corporate membership and needs to admit 23 such members for the payment.

Speaking alongside Yiu, Civic Party lawmaker Tanya Chan, who invited him to estimate the land costs, accused some clubs of focusing on commercial operations rather than contributing to sports.

Chan cited company registry figures in asserting that the Jardine’s Lookout Residents’ Association, for example, made HK$10 million last year from selling food and drink in its club at Jardine’s Lookout.

But it only made HK$5,000 from its swimming pool, HK$186,600 from its tennis court and HK$100 from its basketball court.

Another example she noted was the Filipino Club, which made HK$336,000 in 2016 from catering, compared with HK$120,600 from games.

Chan expressed disappointment that the government did not conduct a comprehensive review of each club’s contribution to local sports, allowing clubs to renew their leases at taxpayers’ expense while operating commercially.

“We do not deny the point of existence of some sports clubs, but we should not make all of society subsidise a few elites,” she said.

Speaking on a radio programme on Wednesday, Secretary for Home Affairs Lau Kong-wah said the clubs might not be able to cope with the cost of full premiums on top of spending on maintenance.

“If you go to the extreme and charge the full market value, it will stifle the use of land, and this is not that suitable,” Lau said. Instead, these clubs could help supplement government sporting venues, which are sorely lacking, he added.

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The minister said opening up the clubs would be a vast improvement for sports lovers in Hong Kong, since some were currently not accessible at all.

Wong Shiu-hung of the Liber Research Community, a local NGO that studies land and development policies, also said on Wednesday the annual reports of some clubs showed they were not facing the financial difficulties that the secretary highlighted.