7 Mistakes Clubs Make Before Starting a Redevelopment

The most expensive mistakes in club redevelopments do not happen on the construction site. They happen in the boardroom, months or years before a builder is appointed.

The numbers are real. There are over 1,400 registered clubs in NSW, holding 6.7 million memberships. Collectively, these clubs spend approximately $920 million per year on capital works, supporting an estimated 6,400 jobs across the state (ClubsNSW/Urbis, 2022). Hospitality venue construction typically costs between $3,500 and $7,000 per square metre (BSG Commercial, 2025), and the delivery statistics are grim: 98% of Australian construction projects face delays, with average durations running 37% beyond original projections (Buildern, 2026). Only 50% of construction projects finish on time (ECU, 2024).

For clubs, a blown budget or an 18-month delay means reduced member amenity, board pressure, and in worst cases, financial distress. After advising clubs on redevelopment projects across NSW, these are the seven pre-construction mistakes we see most often, and every one of them is avoidable.

1. Hiring an Architect Before Understanding the Budget

This is the single most common mistake. A board commissions an architect to design their dream venue, falls in love with the concept, presents it to members — and then discovers it costs twice what the club can afford.

The problem is not the architect. It is the sequence. Architects design to a brief, and if that brief is unconstrained by financial reality, the resulting concept will be aspirational rather than deliverable. The board then faces a painful choice: scale back a design that members have already seen and emotionally invested in, or push ahead with a project the club cannot fund. Neither option is good.

This pattern is especially dangerous right now. Building material costs have risen 47% compared to pre-pandemic levels (MBA/ABS, 2026). A concept that might have been feasible in 2019 can easily blow out by millions at today's rates. Boards that skip the numbers-first step are working off outdated assumptions without realising it.

The fix: Commission an independent feasibility study before engaging an architect. This study should establish your realistic construction budget based on current market rates, model your funding capacity (debt, equity, grants, and operational cash flow), identify staging constraints that will affect scope, and test whether the project is financially viable under conservative revenue assumptions. Only then should you brief an architect, and that brief should include a hard budget ceiling, not a wish list. The feasibility study is what keeps the entire project honest from day one.

2. Not Planning for Staged Construction

Clubs cannot simply close their doors during a two-year build. Gaming, dining, and entertainment must continue operating throughout construction. Members expect access. Staff need workplaces. Revenue needs to flow.

But staging adds real cost and complexity, typically 15-25% above the base construction cost. That premium comes from multiple sources: temporary structures and relocations for gaming areas, kitchens, or bars; duplicated services (mechanical, electrical, hydraulic) that must run in both old and new sections simultaneously; additional preliminaries for the builder to manage a live operational environment; lost efficiency from constrained site access, restricted working hours, and noise limitations; and compliance costs for maintaining fire egress, accessibility, and BCA requirements through each construction phase. Boards that do not plan for staging from the outset end up with a design that looks great on paper but cannot be built without shutting the club down, or a staging plan that is retrofitted at enormous cost.

The fix: Include staging as a core requirement from the earliest feasibility stage, not something the builder figures out later. Your architect and project team need to design around your operational needs from day one. That means mapping your revenue by area (gaming floor zones, function rooms, dining, bars), identifying which areas generate the most income and must be protected longest, and sequencing construction phases to minimise revenue disruption. The staging plan should be tested financially. Model the revenue impact of each phase and confirm the club can sustain operations through the full construction period.

3. Underestimating the Impact on Revenue

Construction disruption reduces foot traffic, limits gaming floor capacity, restricts parking, creates noise, and affects food and beverage revenue. Many clubs fail to model this impact with any rigour, and they end up with cash flow pressure during the build. That is the worst possible time to be under financial stress.

The impact compounds. Reduced amenity drives members to competing venues. Some of those members do not come back. Meanwhile, the club is carrying construction debt, making loan repayments, and potentially funding cost overruns, all while trading below normal levels.

We have seen clubs assume a 10-15% revenue dip during construction and experience 30-40% in their worst-affected trading periods. The difference between those numbers is the difference between a manageable project and a financial crisis.

The fix: Model revenue impact alongside construction costs with the same level of detail. Build a month-by-month cash flow forecast that overlays construction expenditure against projected reduced trading revenue for each stage. Include a financial buffer. We typically recommend modelling a 20-30% revenue reduction in areas directly affected by construction, and a 10-15% reduction in adjacent areas due to noise, access changes, and general disruption. Plan your staging sequence to protect your highest-revenue areas for as long as possible, and have a contingency plan if revenue drops further than expected. This is not pessimism. It is governance.

4. Accepting the Lowest Tender

Club boards often feel pressure to demonstrate fiscal responsibility by accepting the cheapest builder. This is understandable. Directors have fiduciary duties, and choosing a more expensive tender requires confidence and clear reasoning.

But in club construction, the lowest bid frequently leads to the most expensive outcome, through variations, delays, disputes, and quality compromises. Projects over $200 million regularly exceed budgets by 30% or more (ECU, 2024). That pattern holds at smaller scales too. The builder who bids low to win the job will make their margin back through variations. It is not a question of if, but how aggressively.

The risk is worse right now because the construction industry is under severe strain. In 2024 alone, 3,217 Australian construction companies collapsed, roughly eight per day (Scott Kuru, 2025). A club that selects a builder primarily on price, without properly assessing financial stability, is exposed to the very real risk of their builder going under mid-project. The consequences: months of delay, legal costs, re-tendering, and often a large cost increase to complete with a new contractor. Disputes alone absorb an average of 2.6% of total project costs in Australian construction (Allens, 2022). On a $20 million club project, that is over $500,000 in dispute-related costs.

The fix: Evaluate tenders on capability, methodology, relevant experience, financial stability, and risk allocation, not just price. Request and review audited financial statements. Check the builder's current workload and pipeline. Assess their track record on similar projects (hospitality and live-environment experience is non-negotiable for club work). A structured tender evaluation report that scores each tenderer across weighted criteria gives the board confidence to approve the right appointment, not just the cheapest one. Document the rationale clearly. This protects directors and demonstrates proper governance.

5. Relying on the Builder for Independent Advice

Builders are not independent advisors. Their project managers work for the construction company, not the club. Relying on the builder for cost advice, program assessment, or quality verification creates a fundamental conflict of interest.

This is not a criticism of builders. It is a structural reality. A builder's project manager is incentivised to manage the builder's risk, protect the builder's margin, and present the builder's position. When a variation is submitted, the builder's team will argue for it. When a delay occurs, the builder's team will explain why it is not their fault. When quality is questioned, the builder's team will assert it meets the specification.

None of this is necessarily wrong. But it is one-sided. A club board that relies solely on the builder's reporting is hearing one perspective on every issue and making governance decisions based on incomplete information.

Organisations with structured project management oversight achieve 60-62% improvement in on-time and on-budget delivery compared to those without it (PM Solutions, 2022). That is not marginal. It is the difference between a project that delivers and one that drifts.

The fix: Engage an independent client-side advisor who reports directly to the board. This person (or firm) should have no commercial relationship with the builder, architect, or any other party on the project. Their job is to review every recommendation, every variation claim, every program update, and every quality issue from the club's perspective alone. They should attend site meetings, review payment claims before they are certified, and give the board an unfiltered view of project performance. The cost of independent oversight is typically 1-3% of construction value, a fraction of the cost of a single disputed variation or unmanaged delay.

6. Inadequate Member Communication

Redevelopments affect every member. Noise, dust, disruption, reduced amenity, changed parking, relocated bars, and altered access patterns all create frustration. Without proactive communication, that frustration becomes political pressure on the board. And board instability mid-project is one of the fastest ways to derail a redevelopment.

Clubs are democratic organisations. Directors face election. Members vote. A poorly communicated redevelopment can become an election issue, leading to board turnover, strategy reversals, and project scope changes that add cost and delay. We have seen projects stall for six months or more because a new board wanted to "review" decisions made by the previous board. Those decisions were sound. They were just poorly communicated.

The fix: Develop a member communication plan before construction starts and maintain it throughout the project. This plan should include regular updates (monthly at minimum) through multiple channels: noticeboard, email, website, and social media. Be specific about what is happening, when, and why. Acknowledge disruption honestly rather than minimising it. Share progress visually with site photos and milestone updates. When a new section opens, make it an event. Most importantly, give members a channel to raise concerns and respond to those concerns promptly. A well-informed membership is a supportive membership. A membership that feels ignored becomes hostile.

7. No Independent Board Reporting During Construction

Construction moves fast. Decisions are made daily on site. Without structured, independent progress reports, the board only discovers problems after they have become expensive. By the time a cost blowout or program delay surfaces in a builder's monthly report, the window to intervene has usually closed.

Monthly builder reports are written from the builder's perspective. They are not independent governance tools. They will report what the builder wants the client to know, framed the way the builder wants it framed. Critical information is often buried, softened, or omitted entirely. A program that has slipped three weeks might be reported as "tracking to revised programme." A cost risk might not appear until it becomes a formal variation claim.

The fix: Require independent monthly reports covering cost, program, quality, and risk. These reports should be written by someone whose only job is to protect the club's interests. Not the builder, not the architect, not the QS (who often has a pre-existing relationship with one of the other consultants). The report should include a clear cost-to-complete forecast (not just costs to date), an honest program assessment against the original contract completion date, a risk register with live mitigation actions, and a plain-language summary that any director can understand regardless of their construction background. This is how boards govern construction projects. Without it, they are flying blind.

The common thread

Every one of these mistakes, seen repeatedly in club redevelopments across NSW, stems from the same root cause: the absence of independent advice at the board level.

Architects design to a brief. Builders construct for profit. Quantity surveyors manage risk conservatively. None of these perspectives are wrong, but none are solely focused on the club's best interests.

An independent client-side advisor fills this gap. They bring construction expertise without commercial conflict. They translate technical complexity into board-level governance. And the data backs it up: organisations with structured project oversight deliver 60-62% more projects on time and on budget than those without it.

If your club is considering a redevelopment, the time to engage independent advice is now, before the first architect is appointed, not after the first variation arrives.

Frequently asked questions

How early should a club engage an independent advisor?

Before you engage an architect. The earliest decisions, budget setting, feasibility analysis, site strategy, and staging approach, have the greatest impact on project outcomes. By the time you are evaluating tenders, the major parameters are already locked in. An independent advisor adds the most value when they can shape those parameters, not just react to them.

What does independent project advisory cost?

Typically 1-3% of the total construction value, depending on the scope of services and project complexity. For a $15 million club redevelopment, that is $150,000-$450,000. That sounds like a lot until you compare it to a single major variation ($200,000-$500,000+), a three-month program delay (lost revenue plus extended preliminaries), or a builder insolvency mid-project. Independent oversight pays for itself many times over on any project of meaningful scale.

Can the club's architect or QS provide the same function?

No. The architect designed the building, so they have a professional and reputational interest in defending the design. The QS is often appointed by the architect or has longstanding relationships with the builder. Neither is truly independent. A client-side advisor has one client: the club. No split loyalties, no commercial relationships with the project team, and no reason to tell the board anything other than the truth.

What should the board look for when selecting an advisor?

Direct experience with club and hospitality redevelopments (not just residential or commercial construction). A track record of advising asset owners, not builders or consultants. The ability to communicate complex construction issues in plain language that non-technical directors can act on. And complete independence: no referral arrangements, no panel agreements, and no commercial relationships with any builder, architect, or consultant they might be asked to oversee.

Is this relevant for smaller projects under $5 million?

Yes, though the scope of advisory services should be scaled accordingly. Smaller projects carry proportionally higher risk because the club's financial buffer is thinner. A $500,000 overrun on a $5 million project is 10% — enough to cause genuine financial stress. The principles are the same regardless of project size: independent feasibility, proper staging, rigorous tender evaluation, and structured board reporting. The delivery model just needs to be right-sized to the project.

UpScale Project Management provides independent advisory for club redevelopments across NSW. Book a free consultation to discuss your club's project.