The Gift

Has it come to the point that the Deaf Community in Adelaide has had to resort to ‘BEGGING’ ? – I do not use this word lightly. But begging is what they seem to have been reduced to. A week or so ago there was an article in an Adelaide Newspaper. The Deaf community are asking for someone or a company to invest in ‘262’. The famous ‘262’ is the heritage listed building on South Terrace that the Deaf community have called home since 1923. As part of this investment whoever buys ‘262’ can develop certain areas of the property but not the old building itself because it is heritage listed. The Deaf community have asked whoever wants to invest to then lease back ‘262’ to them long term so that it can remain as their home. In exchange the investor can make a profit from developing the areas of the property that do not come under the heritage listing.

Now some may call my use of the word BEGGING as extreme. But the fact of the matter is that the Deaf community in Adelaide is on its last legs. The truth of the matter is that unless they can find an investor, and soon, they will lose their spiritual home. This is despite the fact that the building was ‘gifted’ to them. Yes that’s correct, it was given to the Deaf community, just so long as they could find an incorporated body to help them run it. That incorporated body turned out to be the Deaf Sport and Recreation Association of South Australia. Wasn’t that kind of the “HEARING” administrators. (HA)

The HA knowing that the Deaf community loved and cherished ‘262’ decided that they would give it to them. But before you get all weepy eyed at their generosity let’s consider the facts. The first of these facts is that ‘262’ was not for the HA to ‘gift’ away. Let’s just remember that the old Deaf Society of South Australia was set up for Deaf people by Deaf people. How kind of the HA that had been trusted to look after ‘262’ to give it back by way of a ‘gift’. The fact is that they never truly morally owned ‘262’ to start with. What is a fact is that a succession of HA have made a mess of keeping it sustainable over a period of many years. So the reality is that the HA were saying, “We can’t fix the mess we made, here you can have it, fix it yourself.”

Now people may say that I am being ridiculous. But I have asked some questions and it seems that the main drivers in setting up the Deaf Society in Adelaide were Deaf people. There were three it seems – Bostock, Hawkins and Salas – who sought support from Samuel Johnston and Sir John Colton. Through sheer hard work they raised money to set up the first Deaf Society on Wright Street which was debt free. They moved to the current Deaf Society, 262, I think in 1923, with the help of benefactors. At the time ‘262’ was also debt free. So let us make no mistake – The Deaf Society was established through the nous of Deaf people FOR Deaf people and was paid for as the result of the efforts of DEAF people. The upkeep and administration of ‘262’ was trusted to HA who took it to its current state of near total collapse. Thanks for ‘gifting’ it back in such pristine condition. Well done!

Now on the Deaf Can Do website you will see a video message that explains how the HA of the Deaf Society are to ‘Gift’ the building back to the Deaf community. (http://www.youtube.com/watch?v=L0RpvOewln8&feature=youtu.be ) They say all the right things about its importance and the fact it is the Deaf communities spiritual home etc etc etc … But what they are really saying is, “We want to move to Welland. We want to take all the services and money there because it is cheaper for us. You can have the building and be responsible for its upkeep because we don’t want it. We don’t want it because it is a cash hole that is swallowing up our money” What they mean in a nut shell is,  “Here you can have ‘262’ and with it all the headaches of its upkeep.” But of course they are saying it in a much nicer way.

One of the conditions of this ‘wash our hands of it’ gift was that an incorporated organisation must look after the building for the Deaf community. This incorporated organisation turned out to be the Deaf Sport and Recreation Association of South Australia (SRASA). Of course SRASA were not silly.  In the video they explain that before accepting the ‘gift’ they wanted to do their due diligence and make sure accepting the gift was viable. Until they had done that due diligence they were not prepared to accept the ‘gift’. This was a very smart move on their part.

SRASA were to make an announcement after the process of due diligence had been completed. The information we have received is that SRASA received considerable monetary support from the HA to employ a consultant to carry out this due diligence process. The considerable expenditure is alleged to be in the vicinity of $76 000. It seems that the consultant received this $76 000 to tell everyone what they already knew. SRASA lacked the financial capacity to be able to maintain 262. So the decision, it is believed, is for ‘262’ to be sold, parts of it redeveloped, and ask that a would be investor lease the heritage listed building back to SRASA for a long period of time. This is the situation as it is understood. Corrections are welcome and encouraged to clarify any errors.

Now it may have been possible that SRASA could have made ‘262’ viable IF they had been able to develop business opportunities that could build on what they know best. What they know best is all things Deaf. But you see one of the conditions of the ‘gift’ was, allegedly, that the Deaf Administrators (DA) who were to take over the building were not allowed to establish any services in competition to the HA services. This meant they could not apply for grants that the HA might want to apply for, they could not set up businesses such as say interpreter booking service in competition with the HA, they could not rent out the building space to other services that might be competition to the HA and so on. So the income stream to maintain 262 that was most viable and understood by the DA was to be denied them. (In this case Deaf Services)

So how were they to make money? They could significantly redevelop the building so that it was modern office spaces. But they needed considerable capital to do that. The building is in need of significant maintenance already. It has been quoted that it costs around $180 000 ever year in maintenance. This is money that the DA simply does not have. Arguably the condition that the HA want to impose on the DA to accept the ‘gift’ is illegal anyway. It is a restraint of trade. BUT if this was to prove the case the HA could just withdraw their offer of the ‘gift’. They hold all the aces. (And you can bet that they know this!)

In the video it explains that the HA has taken services for the Deaf community away from ‘ 262’ to establish these services at their Welland and Modbury offices. The money for these services was ACTUALLY gifted to the current HA because the previous HA of the Deaf Society had made a mess of the Deaf Society finances and cried out to the current HA for help. This cry for help all happened back in 2007. At the time the current HA insisted that the Deaf Society was still an independent organisation and that they were working in ‘partnership’ to save them.

Some partnership this turned out to be. They changed name of the Deaf Society to Deaf Can Do so that it matched closely to one of the business names that they owned. They have now taken control of all the services money. They have taken the audiology business and the interpreting business. In fact they have taken almost every income stream that was available to the Deaf Society and claimed it as their own. And what did they leave the SA Deaf community? They have left a building that is falling down around their ears and no means to maintain it. They have denied the Deaf community the right to set up services in ‘262’ that are most viable to the Deaf community.  These services would enable income streams that would assist with the maintenance of the building.  Is this really a partnership? Don’t make me laugh; this was a fully fledged takeover. It was a bloodless coupe!

So what is the situation? The Deaf community need to find an investor that will become their benefactor. They will lose control of the very asset that the generations before them worked so hard to establish. They have trusted over a period of many years that the HA would do the right thing by them. Instead of having a debt free spiritual home they are left on a wing, a prayer and a run down building. They have been robbed and pillared of their assets. They have lost control of their services and the funding that went with them. They are, in short, totally disempowered. They have no ‘gift’ just a continuous fight for survival. And what of  the HA? Well they just get richer and richer.

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2 thoughts on “The Gift

  1. Excellent summary Gary. There is more to the story than this. First of all, Townsend House/DCD are having cashflow problems although they are not asset-poor. They can’t just liquidate assets to help with their cash issues.

    Another thing is, DSRSA were reluctant to challenge TH/DCD on their no-competition stance and so they were not willing to try and negotiate to allow the provision of a range of services to be incorporated in the terms of the gifting process. Throughout the negotiations and consultation period, DSRSA maintained their “No Services” stance and when it was explained to them that services were essential to run a community organisation, they said no, we don’t want them, we just want to run a deaf sports and social club, nothing more. Several people explained to DSRSA that actually certain services were essential for the long-term health of the club such as community development and outreach services (which TH/DCD do not provide), and they could have been clever and turned things to their advantage, but no, they didn’t take this opportunity.

    There also was the opportunity to negotiate and take over interpreting services from TH/DCD as apparently the CEO of TH/DCD made this suggestion but DSRSA maintained their stance, and the same goes for Auslan classes.

    A series of meetings were held throughout the winter discussing what to do with the building should it be handed over to the community and several options were identified:

    1. Accept the building as is and generate the funds necessary to run it straight off the mark. The risk are, it is going to be an almost impossible task to achieve this. About $50,000 in income is almost guaranteed immediately but what about the rest of the funds required? Also it takes some time to build up business, maybe 2 years and what if income falls short in the meantime? A high risk option
    2. Lease/rent the building out as it is and all deaf services and provision move out. Risk is, given the shortcomings, who will want to rent it out, and will sufficient funds be generated?
    3. Sell the building as it is and buy a new property with the funds. Problem with this is although 262 has a paper value of $3 million, in reality it is likely to receive anything between $800,000 and $1.5 million due to its heritage listing and a stagnant real estate market
    4. Go into partnership with a developer and build say 50 flats and office space at the rear as well as improving the heritage building and sell the flats on long leases (i.e. 100 years) and split the profit 50/50. Risk is, who will be prepared to invest in this and receive only 50% of profits? Also the estate market is stagnant at the moment.

    There was a 5th option available, that option 1 above be adopted but 262 be subsidised by TH/DCD for 2 years to give DSRSA the chance to develop their business and generate the funds necessary to be able to run it independently. And with this option it was discussed perhaps saying that the no-competition clause be in–place for 2 years. But no this wasn’t even considered.

    What was decided at the end was none of the above, and a combination of options 3 and 4, which to me is the least attractive one.

    So what next? I can see several possibilities and what I estimate are the chances of things happening subsequently:

    1. The plan goes ahead, a suitable backer is found and the Deaf Community retains their home for the time being at least. Chances of this happening – 50%
    2. A backer is not found and the property is placed on the market and stays on the market for years and years (just like another similar property down the road). The Deaf Community continue to use the building but escalating maintenance costs forces everyone out as it becomes no longer safe. Chances of this happening – 80%
    3. A backer is not found but the property is quickly sold for half the market value and the deaf community is forced to move out. TH/DCD refuse to give the proceeds of the sale to the Deaf Community and they are forced to do what other Deaf Communities are doing elsewhere in Australia. Chances of this happening – 85%
    4. As per 3 above but for $3 million and TH/DCD give the money to the Deaf Community who buy a fantastic property which is easily accessible and meets all their needs including a large hall, club rooms, a chapel and sufficient office space. Dream on! Chances of this happening – 20%, if that
    5. An angel steps in and offers to do what is necessary to save the Deaf Community. Chances of this happening – 20%.

    There is much more to the story, perhaps another day?

  2. Thanks for the additional info Paul. Looks like a few are way out of their depth. I hope they will call on the expertise that is at hand.

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