Stadium cash plan

9:26am Wednesday 21st May 2008

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COUNCIL members will tonight be asked to agree a recommendation to take over repayments for York City's £2 million Football Foundation loan.

The plan is on the agenda at a City of York Council meeting this evening in which a report on delivering a community stadium by deputy chief executive Simon Wiles will be discussed.

Also included in the report is a suggestion to sell both Bootham Crescent and Huntington Stadium to fund the building of a new stadium in one of "two feasible sites".

Furthermore, Wiles will recommend £1 million of the sale value of Huntington Stadium is used to relocate the athletics club, currently based there, to another site with suitable viewing facilities.

His report has also called on between £300,000 and £350,000 to be committed by the council towards programme management and planning and development officer time from an external funding drive and central government coffers.

The Minstermen currently pay £138,000 a year in repayments to the loan, which was taken to regain ownership of the football stadium from previous owner Douglas Craig and his fellow Bootham Crescent Holdings directors Barry Swallow and Colin Webb.

Under the conditions of the loan, the £2 million would revert to a grant from the charitable body during the building of a new stadium. Wiles will therefore recommend the council consider repaying the loan, subject to legal considerations, as a way of "improving the football club's short-term revenue position".

In the report, he said: "In order for the council to make a commitment to the new stadium and to relieve some of the current pressure on York City, the council could consider repaying the £2 million loan to the Football Foundation and securing this against Bootham Crescent.

"This would be attractive because the current loan is at 6.9 per cent interest and the council can borrow at around 4.6 to 4.8 per cent currently. In addition, the council could allow York City to roll up the interest in the period prior to the move to the new stadium, thus relieving the club of a cost of £138,000 per year.

"The drawbacks to this option are that the council could only realistically recover its loan through the successful completion of the whole project and thus the council is in a real financial way tied in to its success."

Wiles' report adds that, because of the current state of the property market, only a combined value of £9 million can be assumed from the sales of both Bootham Crescent and Huntington Stadium.

He predicts the cost of building a 6,000-capacity stadium - the minimum required under Football League regulations - along with fees, inflation in building costs over a three-to-four year period and the provision of a more sustainable and aesthetic design would be £7.5 million before the additional seven-figure sum required to relocate the athletics club.

Commercial opportunities including executive boxes and fitness facilities would also be overseen by a professional management company, with the excess of income earned over expenditure incurred shared between the football club and York City Knights.

In a statement that will encourage supporters of both clubs, Wiles underlined the commitment he feels the council should give to the project.

He said: "It's clear that without input from third parties such as the council and local businesses it is unlikely that the professional sports and clubs in the city have the financial or operational capacity to bring about the delivery of the vision of a new community stadium for York.

"It is a corporate priority to have a new stadium because professional football is important to the city and we want to support it. Given the financial problems of funding a new stadium, the complexities involved, the planning issues and the current ongoing revenue losses of York City it has become clear that, unless the council takes a more proactive role, a new community stadium will not come to fruition."