Community stadium costs revealed (From York Press)

York community stadium costs revealed

12:00pm Tuesday 29th May 2012 in News Exclusive By Mark Stead , Political Reporter

CRUCIAL details about York’s £19 million community stadium project, which were kept secret by council chiefs, can today be revealed by The Press.

Information about the funding and expected benefits had been controversially hidden by council officials, despite calls for it to be made public.

This newspaper has now obtained a copy of City of York Council’s business case for the project, which also sets out the expected boosts for York City FC and York City Knights.

The £90 milllion plans by developer Oakgate for a 6,000-seat stadium and Marks & Spencer and John Lewis superstores at Monks Cross were approved by the council earlier this month.

Many of the financial aspects surrounding the stadium project were redacted in the report to the meeting, meaning they could not be seen by the public.

Coun Ian Gillies, leader of the council’s Conservative opposition, said too many figures were based on “presumptions”, but the council said the case was “robust”.

The report shows that:

• Estimated income from the new stadium is £335,000, with operating costs expected to be £321,000, leaving a £14,000 surplus. An £83,000 surplus is expected in the first year from the whole scheme, including community facilities such as York St John University’s Institute of Sport and a base for York Teaching Hospital NHS Foundation Trust

• City would pay annual rent of £125,000 and the Knights £25,000, while stadium naming rights could bring in £50,000 a year and 3G pitch rental £28,000 a year. A further £52,000 a year is forecast from the hospital trust having “exclusive” use of the hospitality facilities on weekdays as a “training, development, conference and teaching centre”, allowing the sports clubs to use them in evenings and at weekends

• City’s Bootham Crescent home, which would be sold, has been independently valued at £4.5 million on the open market, with a net value of about £3.5 million once demolition and other matters are taken into account. The figures are based on the site becoming housing

• About £800,000 from Bootham Crescent’s sale would go towards the stadium scheme, after payments to various parties due money from the sale proceeds

• City’s overall annual income should rise by £278,000

• The Knights’ annual income is estimated to rise by £50,000.

The business case says Greenwich Leisure Limited (GLL), the operator of the existing Huntington Stadium and other Monks Cross leisure facilities on the council’s behalf, is making “considerable losses” of about £300,000 a year.

When the report was written in February GLL had said at least £3 million would have to be invested in Huntington Stadium, Waterworld and Courtney’s gym if they were to remain competitive and of good quality in the future.

The firm said it would probably have to pull out of its contract if the stadium did not go ahead.

Coun Gillies, who previously criticised the business case and the decision to keep much of it confidential, said: “It contains far too many presumptions and forecasts for it to be treated as a serious business plan.” He said he was initially denied access to the information then, when shown it, “gagged” from discussing it with his own group.

He said: “Most of the content, in my opinion, should have been in the public domain, as the council appears to be subsidising the revenue side of the football club, taking the bulk of the future financial risk of the stadium’s running, assuring York City Knights there will be no reduction in income, and not quantifying the risk and future spend of public money.”

Coun Gillies said “professional advice” he had received about Bootham Crescent’s value suggested £4.5 million was “optimistic”.

He said “political and peer pressure” had guided the stadium issue and said he feared severe problems for both clubs in years to come.

Bill Woolley, the council’s director of city and environmental services, said: “We are confident the business case is robust and this view has been supported by an external audit.”

He said the council was now in detailed discussions about taking the project forward.

Mr Woolley said it was important to remember the business case stated the financial model was based on detailed “evidence-based assumptions” and provided “one potential scenario of how the stadium would operate.”