PHOTO:The president of the Cyprus Community of New South Wales, Spyros Constantinou, stands outside the community premises in Stanmore, Sydney. Photo: Supplied
Sydney.- Once it had been the vibrant focal point of Cypriot and Greek communities in Sydney, but two years ago, the Cyprus Community of New South Wales was facing the prospect of going into voluntary administration and being forced to sell its prime property in Stanmore, Sydney, to pay off debts.
A major rethink, a multi-pronged approach and some hard work has meant the premises will remain in the community and secure its future for years to come.
Community president Spyros Constantinou told Neos Kosmos that the decision to create a company the Cyprus Capital Company to refinance the property with shares being made available to community members and the effort to rezone it from private recreation to mixed-use and residential were crucial actions that have saved the community’s assets.
“The community began as the Cypriot Brotherhood, 91 years ago. For years, Aristidis Coffee in central Sydney was where all Cypriot migrants without family support came for help.
“In 1988, after selling its building in the City, the community bought the current premises from the Australian Licence Club which had 60 poker (pokey) machines. It became the centre for the whole Greek community of Sydney and the venue of big cultural events. Almost all the customers were Greek. The premises had been of the Newtown Jets, a rugby league football club,” said Mr Constantinou who first joined the committee for one year in 1995.
But change was in the air. Up to that time, the Greek and Cypriot communities were centred around the Inner West of Sydney’s Newtown and Marrickville areas, but the younger generation was spreading out to other parts of Sydney.
“Unlike Melbourne, Sydney no longer has suburbs that are specifically Greek,” he said.
He advocated the opening up of the centre to people who were not Greek as a way to ensure its viability.
“We kept selling our culture to ourselves and were not taking in other communities.”
He argued that all cultural events should not be conducted in Greek alone. Since that time, Mr Constantinou said, seven Greek clubs had shut down because they had stayed exclusively Greek and the next generation was not interested or was excluded.
Over the years, the Cyprus community began losing revenue and customers. The expenses grew to the point where the community president of the time had to lend the community $800,000 to keep it afloat. Other directors also lent money to the Community. Operating expenses were $7,000 a week and the debts to the creditors were becoming insurmountable.
The Stanmore Hawks (now the Inner West Hawks) Football Club was also in debt to the tune of $350,000. This too was the responsibility of the community.
By the time community board elections came up in May, 2019, the situation was dire. The club owed in the region of $5.5million to the bank – the president and other private debtors were owed in the region of 1.3 million. With the debts mounting, the bank wanted to call in the debt and the penalty interest on the debt rose from four percent to nine percent.
The community had bought a number of six houses properties on Tuppers Street that were adjacent to the club to square off the block. A sound decision by previous boards, said Mr Constantinou, but they added to the considerable debt burden.
In May 2019, the previous board was looking to go into administration and had signed with with Colliers, a real estate agency with the intent of selling the 9,129 square-metre property with the hope to relocate.
With the elections of 2019, a new group gained a majority on the board that set about averting the crisis. Mr Constantinou was elected to be the new president.
“We had not grasped just how serious the situation was. Everything was stacked against us, said Mr Constantinou on taking up office.
However, some things took place that helped the board in how it should tackle the situation. One of them was the rise of the COVID-19 pandemic. It was a curse for many, but it provided a cushion for the community. The lockdown brought an end to operations which meant that no money was spent on operating losses. Also, critically, the government froze bank loans.
At the same time, part of the community premises were leased for use as a COVID-19 testing centre and as a commercial kitchen that provided a good income in a difficult year.
The six houses that the community had bought had doubled in value to $10 million.
All these factors provided some much-needed breathing space.
A key decision was to create Cyprus Capital LTD that offered shares to the members of the community with a promise of a payout of three percent per annum return with a 30 percent bonus at the end of four years.
“The directors of the company and other friends of the Community did a good job in promoting the company and several hundred members have taken up the offer.”
This has raised over $6million which would have gone to pay off the debts to the bank.
On news of this, Mr Constantinou, said the bank decided that it did not want to be paid out of the loan. It, instead, reduced the loan to $3,4 million with three houses on the portfolio as security.
The bank’s decision was also prompted by the imminent success in the rezoning of the property that will enable the community to develop the property for commercial and residential purposes.
“When I took over the rezoning process, the community had already spent $350,000 on the process with no result,” said Mr Constantinou. “I had experience in the re-zoning process from my real estate business. Sometimes I spent my own money and sometimes I called in favours. I talked to the council almost daily and wrote to the state planning minister as well as other politicians. I pulled all the strings I could to the point where the matter will be hopefully resolved by the end of the month (March).
On the back of this success and money raised from the creation of Cyprus Capital Company and the rezoning, we went to the market seeking expressions of interest – 35 companies expressed an interest in the rezoned property.
“We have sifted through them and we are now down to the four best offers. These include leading national retailers.
“When the elections come up in May, we hope to deliver a new club to the community with additional income. This income will be derived from apartments and commercial premises on the newly developed property.”
“If all this goes through, we will have a property worth twice its original value and an income stream that will exceed $1.5million a year.
“Some of my fellow directors and I have lost some much sleep and experienced so much stress over this. Nothing would make us happier than seeing this through,” Mr Constantinou said.