The former Clutha Riding for Disabled (RDA) owes about $60,000 in loans, rates and wages, but all the debts will be cleared with a single council cheque.
In exchange, the council will own the 3.7ha north Balclutha site which includes the Litchfield Park riding arena, but will lease the facility and grounds back to the RDA group at a peppercorn rent.
The group has recently changed its name to the Litchfield Park Therapeutic Riding Clutha branch RDA and taken on some new members to rejuvenate the organisation.
The financial helping hand came after council staff closely investigated the deal.
Although it has provided a financial rescue package, the council still believes the group may struggle financially in the future as it relies heavily on grants to survive.
Councillors agreed the move was a win-win situation as the group would either survive and prosper or, if it did not, the council had secured prime land at a very low cost, right across the road from a planned new council subdivision overlooking the town.
The deal, endorsed at a full council meeting on Thursday involves the group using the $60,000 to clear its debts.
The council will sign a tenancy agreement with the group, charging it a peppercorn rental so it can continue offering its services to the wider community.
A council representative will also sit on the group's committee.
