Fellow Club members,
You may have heard talk about the Rockford Skeet Club (RSC) wanting to buy the land that the RSC sits on from the S&T Corporation. Well it is true. The RSC recently made a formal offer to the S&T. Although we have not had a formal response from the S&T the discussions that were held at the annual stockholder’s meeting were not favorable for the sale. Some of the S&T board members felt that the offer was too low even though the offer doubled the original investment of $500.00 per share.
The reason the RSC wants to buy the land is twofold. First, by owning the land the RSC is in total control of its’ own destiny. The RSC won’t have to depend on another entity to make decisions. Along with that, the RSC is in discussions to buy about 10 acres of the overshoot land. As you may or may not know our shot is falling on land that we do not own. We do, however, have an overshoot agreement that does offer some protection. It makes sense that we should own all of the land and not just part of it. You might ask why the S&T doesn’t buy the land. If that were to happen our rent would go up substantially which leads to the second reason as to why the RSC should own the land. Our rent has gone up this year from $7500 to $7800 and will remain at that level for 5 years and then will increase to $8100 per year for another 5 years under the current lease. So far the RSC has paid over $80,000 to the S&T. Currently each member pays an average of $31.00 per year. You might ask why not renegotiate a new lease. Well, we tried this year and were unsuccessful. The rent money that we are spending each year can be used to invest in the RSC for the benefit of the members.
Why was the S&T formed? The S&T was formed in 2004 as a means to finance the purchase of the land that the RSC was renting from another owner. The RSC, at that time, did not have the money and a loan from a bank for a gun club with lead on the land would scare most financial institutions away. Therefore the S&T was formed and shares were sold at an initial offering of $500 per share to any member in good standing with the RSC. Only RSC members could buy shares.
The shares are not transferable and have to be redeemed upon leaving the RSC or upon death. Also, no stockholder could own more than 10 shares. Currently, there are 30 stockholders holding 92 shares. The initial stock sale did not raise enough money to buy the land and as a result, two RSC members/stockholders loaned the S&T the balance of the money. Those loans were paid off over the next few years. Another reason for forming the S&T was to provide a firewall between the RSC and the S&T so that it would be harder to lose the land in the event of a law suit. Also, it was thought that the S&T could buy additional land as it became available.
It is the belief of the RSC Board of Directors (BOD) that this firewall is no longer needed or would be effective in shielding the club from a law suit. In today’s environment people sue anyone connected or remotely connected to an incident. Also the RSC has liability insurance to help protect it against a suit. The S&T requires the RSC to be a named insured on the RSC’s insurance policy which tell us that there is risk to all parties.
The RSC is offering $67,000 for the land which is the original S&T purchase price. The value of the land and the cash on hand equals a per share value of $1,067.22 as reported at the annual stockholder’s meeting on April 28, 2015 by the S&T Board of Directors. As you can see the value of the original stock offering price has more than doubled. That amounts to about an 8% return per year, not too shabby. Over and over the members of the RSC were told that this is not an attempt to make money. We firmly believe that the majority of the stockholders share this view.
There were thirteen shares redeemed in the last few months at a per share price of $1009.85. Why would anyone be entitled to much more than the redeemed shares? The S&T BOD stated at the annual meeting that they are not going to release the thirteen redeemed shares to the membership for purchase. Why, since they do have a list of members that want to buy those thirteen shares.
It has been a rough few years but we have moved from a club that was virtually broke to a club with money in the bank. Which leads to one very important point, the RSC has the cash to buy the land at the offered price. No loans, dues increase or rounds increase will be required. There have been contrary rumors and they are totally unfounded.
How does the S&T benefit the club and the answer is very little if anything. They don’t pay the real estate taxes, they don’t pay for liability insurance, and they don’t reinvest in the club or make any improvements. RSC pays for all of this. Protection from laws suits? Well, maybe, but that is questionable. Frankly, we simply don’t need the S&T anymore as it has outlived its usefulness.
Most stockholders bought shares to protect the RSC and not to make money. In fact, some members plan to donate some or all of the proceeds that they receive from the sale of their stock to the RSC.
The Rockford Skeet Club Board of Directors believes that by owning the land, the RSC will have complete control of its destiny, will save thousands of dollars in rental fees, and is in the best interest of the club and its members now and in the future.
Hopefully this makes the RSC BOD position clear. If you have any questions, please contact any RSC BOD member.
Best Regards,
Board of Directors
Rockford Skeet Club