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Council and York City in community stadium rent rise deadlock
YORK’S community stadium project has been hit by a rent deadlock between council bosses and the city’s football club.
York City FC has said City of York Council has proposed raising the annual rent the Minstermen would pay at the new £19 million Monks Cross stadium, to be shared with York City Knights, which the club has not agreed to.
It comes as a council report warned of a risk over the scheme’s affordability if the two clubs refuse rent deals to provide a “realistic income”.
It said this could lead to firms bidding to design, build and operate the stadium – due for completion at the start of 2016 after a series of delays – pulling out or the council having to pay more towards its running costs.
In a business case for the project produced last year, seen by The Press, City’s proposed annual rent was £125,000. Commercial confidentiality rules mean the precise increase sought by the council, which is providing £4 million towards the scheme, has not been confirmed.
City are contributing £350,000 to the project, with developers The Oakgate Group providing £13.75 million after securing approval for a neighbouring shopping complex.
Stadium project manager Tim Atkins said rent levels for City and the Knights were “under final discussion” and their arrangements would “provide security for the clubs, the council and operators” while equally sharing any risks. He said the project had no funding gap and two bidders have been invited to produce final detailed plans for the stadium.
Sophie Hicks, City’s communications and community director, said: “As City of York Council states, rental agreement for the community stadium has yet to be reached with York City Football Club, and this important issue is still under discussion.
“The proposed rental figure for the football club has increased since the business plan was presented in May 2012. Clearly, as custodians of York City Football Club, the board cannot commit to any arrangement which does not benefit the club for the long-term.
“Discussions are ongoing and I am sure a compromise will be reached.”
The “corporate risk” council report said rent levels currently being discussed were affordable for the clubs and allowed stadium bidders to meet targets, but would not cover running costs. Mr Atkins said: “The bidders are comfortable with this, as it has always been the case.
“The stadium offers the bidders a number of commercial opportunities they can develop in order to make it commercially viable for them.”
The council said the risk identified in the report remained “live” until agreements with the clubs were finalised and became legally binding.
Conservative group leader Coun Ian Gillies said the comments in the report justified his "long-held criticism regarding the continued lack of a professional business plan" for the stadium project.
"The ability of the football and rugby clubs to fund a commercial rent should have been established at an early stage, and the fact affordability targets are only now being mentioned gives cause for concern that the council's Labour administration are now looking for a withdrawal strategy," he said.
Coun Sonja Crisp, cabinet member for leisure, culture and tourism, said: "The project is well on track and nothing Coun Gillies can say now or in the future to try and derail it will stop it progressing.
"There is an element of risk in any major project, but I'm pleased to see officers continue to use their expertise to identify and manage effectively any possible risks to this development so that we can move it forward with confidence. We're at an exciting part of the procurement process for the community stadium and, with each step the project takes, it makes Conservative opposition all the more pointless".
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