Agenda item - Community Stadium

This report provides an update on progress made following the meeting of the Staffing and Urgency Committee on the 21 May 2008, when the issue of the ‘Community Stadium’ was discussed, and seeks approval for a proposed loan to the York City Football Club.

Note: The above report has not been made publicly available because it contains exempt information, as set out under Item 2 above. A redacted version of the report, excluding the exempt information, was published with this agenda on Tuesday, 8 July.

RECOMMENDED:That the Council make a loan of £2.1 million to York City Football Club (YCFC), to replace the existing loan of £2.1 million made by the Football Foundation, subject to the conditions set out in paragraphs 9 and 10 of the report and including the following conditions:

a) Further financial investigation into YCFC, Bootham Crescent Holdings and JM Packaging that clarifies the ownership structure, number and value of calls on a capital receipt from the sale of Bootham Crescent and the financial position of the parties involved, and confirms that such a loan and interest could be repaid in full from the value of Bootham Crescent.

b) The Council loan to be subject to a charge on the Bootham Crescent ground, such charge taking precedent over all other calls on the asset.

c) Written confirmation to be obtained that the Football Foundation guarantees that YCFC would receive a £2 million Football Stadia Improvement Fund (FSIF) grant, to be applied to the development of a new community stadium.

d) A legal agreement to be obtained from YCFC that they will work in partnership with City of York Council (and potentially other partners) to deliver a community stadium (including agreements on the use and allocation for access to the facility by groups and the community) by contributing equity from both the FSIF grant and the sale of Bootham Crescent.

e) The interest payable from the loan to be set at a commercial rate (currently 6.25%), reflecting the likely return the Council would achieve if invested on the money markets.

a) The interest to be payable with the balance of the loan at the end of the period projected in June 2012. During this period the interest would be compounded.

b) Confirmation that the final terms of the loan meet the legal requirements set out in paragraph 19 of the report.

REASON: To enable YCFC to pay off their loan and to progress the community stadium project, whilst ensuring that Council taxpayers money is safeguarded.

RESOLVED: That an update report on the progress towards a community stadium be brought to the Executive meeting on 9 September.

REASON: So that the Executive can be satisfied that progress is being made with the project before the matter is considered at full Council.

Members considered a report which provided an update on progress made following the meeting of the Staffing and Urgency Committee on 21 May 2008, when the matter of the ‘Community Stadium’ was discussed, and sought approval for a proposed loan to the York City Football Club (YCFC), to enable it to repay its £2.1m loan from the Football Foundation (FF).

The objective of a new community stadium had been identified as a short term imperative in the Council’s 2007-2011 Corporate Strategy. It would be delivered as a partnership between the Council, YCFC and York Knights Rugby League Club. With reference to Resolution (v) of the Staffing and Urgency Committee, a report had been commissioned from Deloitte commenting on YCFC’s annual financial projections up to June 2012, outlining key issues and risks associated with the project and illustrating how other local authorities had been involved in new stadium development in the UK over the past ten years. Deloitte’s key findings were summarised in paragraph 4.

Members considered the following options, as outlined in the report:

Option 1 – proceed with the loan to YCFC, which would be repaid on the sale of Bootham Crescent when the new stadium was provided by 2012. Repayment would be dependent upon the success of the stadium project.

Option 2 – service YCFC’s existing FF loan, with the advance of interest to be repaid on the sale of Bootham Crescent. This could negatively affect future partnership working, given the expectation that the Council would take on the loan, and the Council would be unable to secure first charge on the Bootham ground.

Option 3 – do not provide a loan to YCFC. This could jeopardise the community stadium project if it caused the club to go out of business and the Council was unable to provide the additional support required for the project.

Having noted the comments of the Shadow Executive on this item, it was

RECOMMENDED:That the Council make a loan of £2.1 million to York City Football Club (YCFC), to replace the existing loan of £2.1 million made by the Football Foundation, subject to the conditions set out in paragraphs 9 and 10 of the report and including the following conditions:¹