Serious cashflow issues and a significant downturn in trade have forced the Illawarra Yacht Club to seek a merger to stay afloat.
Members last month voted to accept an amalgamation deal with the Oak Flats Bowling Club, which has in turn promised to pump $2.5 million into renovating the cash-strapped yacht club's Northcliffe Drive building.
The proposal still needs final approval from the NSW Office of Liquor and Gaming before it goes ahead.
Planned renovations, outlined in a memorandum of understanding signed off by both clubs in December, include replacing rescue boat motors, new clubhouse furniture and upgrades to outdoor areas and gaming operations, as well as a $1 million spend to expand the yacht club's brasserie.
Oak Flats Bowling Club treasurer John Noble said directors knew they had a challenge ahead of them but felt they could turn the yacht club's fortunes around "reasonably quickly" provided the money was spent wisely.
He named the brasserie renovations, which would offer diners sweeping views of the lake, as the highlight of the proposal.
"The yacht club has the potential to have one of the best views in the Illawarra for diners," he said.
Mr Noble confirmed none of the yacht club's existing traditions, amenities or its sailing, fishing, golf, dart and indoor bowls "sub-clubs" would be lost under the amalgamation.
"We're actually keen to enhance the water activities - it's ideally situated to be a strong yachting club," he said.
However, the agreement does set out plans to sub-lease part of the club's downstairs area to generate income for the club.
All current employees will be offered similar jobs and their entitlements honoured by the bowling club, the document says.
The yacht club called for potential amalgamation partners in June last year after suffering a series of financial setbacks, including forking out $300,000 for a new members' rewards computer system.
Club president Robert Willetts wrote in the 2012 annual report that the club's final cash position for the year had fallen by 90 per cent compared to 2003, and 53 per cent compared to the previous financial year.
"Basically without some means of cash injections, the business will find extreme difficulty in being able to continue to operate," he warned.
Club general manager Maureen Bogolin described the financial result, which included a 38 per cent fall in bar trade, as "horrendous".