A Reasonable Proposal? (3 Viewers)

[shmmeee]

Curious from some of the conversations I've had on here today, what the wider viewpoint is to a couple of "middle ground" proposals would be.

I too, don't want to see the council give over tens of millions of property to enable Joy to get a return on her investment. I also think pressure should be applied to both sides for a resolution. Finally I think pressure groups/campaigns are pointless without a tangible outcome that's being requested.

So I have two proposals that I feel are not weighted towards either side, but are aimed at the shared goal of getting CCFC playing in Cov again (preferably at The Ricoh).

Here are the proposals and I'd like to know which you'd back as a campaign:

1) The Council to offer/Sisu to accept the £150k rent agreement, for at least the next 3-5 years while our future is sorted out.

2) The Council to split the football section of the Ricoh off, get it independently valued and offer it to Sisu. Sisu to abide by the valuation (or an average of several if independence is in question).

Edit: woohoo the poll worked!

 

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[Nick]

I'd be happy with number two. I don't expect the ground to be given away for nothing the same as I don't expect it to be over charged so with an average of valuations you can't say fairer?

If sisu had some terms that the earnings from gigs, exhibitions etc would benefit the club and go towards fair play then I'd be happy with them having all of it on that condition.

Can people be constructive in their replies rather than just sisu out etc as its a great question.

 

[Tonylinc]

I would be happy with suggestion 2. In fact I suggested this well over a year ago but was shot down.

 

[cochese]

I'd like to see the club benefit from some of the additional revenue from the stadium. But for that to happen i think you would need at least to see some kind of partial ownership to ensure that money that comes from the stadium goes directly to the club.
I just don't think that would be good enough for SISU. But it would surely be better than having to build a new stadium.

 

[skybluefred]

I agree that the team should get the benefit of the money the Ricoh makes. Unfortunately I think
it would be used to give sisu investors a return on their money.

So for me a rental deal at £150,000 but over a longer period than 3 or 5 years. It would be no good funding sisu until they had built a small ground outside of Coventry.

It would also need a review clause to cover for potential Promotions.:laugh:

 

[Astute]

Voted for both/either.

We need to bring our club home. Rental would be prefered. But a decent valuation for the ground and cash up front would be good......as long as the ground stays with the club when sold. I don't like the way they would separate the club and ground if they got it.

 

[dadgad]

I'd only agree to the Ricoh being sold to the club on condition it could never be separated from the club.

 

[Skybluesquirrel]

2) The Council to split the football section of the Ricoh off, get it independently valued and offer it to Sisu. Sisu to abide by the valuation (or an average of several if independence is in question).

Thats your main problem. Independent valuation. Are you offering SISU the freehold or ACL?

The total construction cost for the whole site was over £100 million. Can that be split? Do the records exist? How do you agree which bill is for which section of the development? Once valued, what do you do with the contract for ACL to run the Ricoh?

ACL's lease from the council to manage the site cost £21million. That lease lasts for 50 years. That about £400,000 a year. As an 'independent officer of the court', the Administrator did not fully disclose a value he assigned to the 43 years left on the lease, but that value was contained in the £1.1m/half a million that was offered as part of the CVA due to ACL at the end of admin.

Do you value the Freehold/ACL with or without a sitting tenant? The obvious point is it doesn't currently have one, but once the proposal is accepted, it then would have. I'm guessing management consultants/valuers/lawyers could argue for months on that point. And who would pay the professional/legal fees?

 

[Deleted member 5849]

Construction cost is surely irrelevant to its value now?

 

[Voice_of_Reason]

I'd be happy with number two. I don't expect the ground to be given away for nothing the same as I don't expect it to be over charged so with an average of valuations you can't say fairer?

If sisu had some terms that the earnings from gigs, exhibitions etc would benefit the club and go towards fair play then I'd be happy with them having all of it on that condition.

Agreed Nick -- I can't see any other way out at the moment. SISU will stick to it's plans and stay in Northampton and (eventually maybe) build a new Stadium. SISU will not budge, regardless of NOPM/KCIC efforts (which I support). There has to be middle ground.

Can people be constructive in their replies rather than just sisu out etc as its a great question.

 

[stupot07]

Construction cost is surely irrelevant to its value now?

I would have thought so. The building is worth what's it's worth not what it cost to build.


Sent from my iPhone using Tapatalk - so please excuse and spelling or grammar errors

 

[shmmeee]

Thanks to all who have responded so far.

Just a quick note: several people saying "I don't trust Sisu with the Ricoh" - that's the point of splitting off the bowl and keeping the (more valuable to a hedge fund) development land and casino/exhibition hall business for ACL/CCC.

Would be very interested to hear from the person who said "neither", assuming they're not just being cynical for the sake of it. What is your complaint with each option?

 

[Skybluesquirrel]

Construction cost is surely irrelevant to its value now?

If you build a house the cost of the raw materials and labour is far lower than the end result. The same with shopping centres. Value is added.

Buildings generally appreciate over time. Sound investment, hence all the buy to let landlords. Even council houses increase in value.

 

[shmmeee]

I'd only agree to the Ricoh being sold to the club on condition it could never be separated from the club.

Thats your main problem. Independent valuation. Are you offering SISU the freehold or ACL?

The total construction cost for the whole site was over £100 million. Can that be split? Do the records exist? How do you agree which bill is for which section of the development? Once valued, what do you do with the contract for ACL to run the Ricoh?

ACL's lease from the council to manage the site cost £21million. That lease lasts for 50 years. That about £400,000 a year. As an 'independent officer of the court', the Administrator did not fully disclose a value he assigned to the 43 years left on the lease, but that value was contained in the £1.1m/half a million that was offered as part of the CVA due to ACL at the end of admin.

Do you value the Freehold/ACL with or without a sitting tenant? The obvious point is it doesn't currently have one, but once the proposal is accepted, it then would have. I'm guessing management consultants/valuers/lawyers could argue for months on that point. And who would pay the professional/legal fees?

You're right, therin lies the rub with any sale of the Ricoh.

Personally I'd say you value the football bit alone, let ACL run the rest, and you value it at a comparable price to other stadia deals, so somewhere in the region of £4-6m.

I'd also say CCC should get the valuation through a transparent process and make the offer public to Sisu. If Sisu don't want it at that price then fine, but I think fan pressure would come into play. But that's just because I don't see why the buyer should value it, normal practice is the seller puts a price on and if it's too high it doesn't sell.

 

[Astute]

Would be very interested to hear from the person who said "neither", assuming they're not just being cynical for the sake of it. What is your complaint with each option?

They live in Northampton.

 

[Skybluesquirrel]

Genuine question: Does anyone know of any sale of the freehold of any completed and fully functioning commercial building in the Uk that was less than its total construction cost?

 

[Deleted member 5849]

If you build a house the cost of the raw materials and labour is far lower than the end result. The same with shopping centres. Value is added.

Buildings generally appreciate over time. Sound investment, hence all the buy to let landlords. Even council houses increase in value.

Stadiums however, generally depreciate...

 

[Deleted member 5849]

Genuine question: Does anyone know of any sale of the freehold of any completed and fully functioning commercial building in the Uk that was less than its total construction cost?

Highfield Road

 

[Astute]

Genuine question: Does anyone know of any sale of the freehold of any completed and fully functioning commercial building in the Uk that was less than its total construction cost?

There are many. It is mainly in areas where nobody wants to be or owners that have gone under and the properties are then bought by pension funds/ hedge funds.

 

[Deleted member 5849]

Thanks to all who have responded so far.

Just a quick note: several people saying "I don't trust Sisu with the Ricoh" - that's the point of splitting off the bowl and keeping the (more valuable to a hedge fund) development land and casino/exhibition hall business for ACL/CCC.

Would be very interested to hear from the person who said "neither", assuming they're not just being cynical for the sake of it. What is your complaint with each option?

Wouldn;'t it be nice if we focussed on the football club anyway?

The disturbing thing when Haskell (US Property developer) was on the scene was how all the talk about all the great property development opportunities open to him.

Nothing about the club!

If the land opportunities are as great as claimed, ACL will have no trouble getting funding for buildings themselves, or selling at a top price elsewhere. The club, meanwhile, can focus on the reason for its existence.

 

[sky blue john]

O2 Arena !!!

 

[Skybluesquirrel]

You're right, therin lies the rub with any sale of the Ricoh.

Personally I'd say you value the football bit alone, let ACL run the rest, and you value it at a comparable price to other stadia deals, so somewhere in the region of £4-6m.

I'd also say CCC should get the valuation through a transparent process and make the offer public to Sisu. If Sisu don't want it at that price then fine, but I think fan pressure would come into play. But that's just because I don't see why the buyer should value it, normal practice is the seller puts a price on and if it's too high it doesn't sell.

The whole point of getting the Ricoh is getting access to all the other revenue. The stadium on its own only gives limited revenue on certain days of the year.

Doncaster cost £20 odd million and is nowhere near the standard of the Ricoh. Brightons Amex is similar to the Ricoh. Cost for the stadium alone was in the region of £90 million. The Etihad was around £150 by the time it was converted for football.

 

[Skybluesquirrel]

Highfield Road

Cost of construction? Sale price?

 

[Deleted member 5849]

The Etihad was around £150 by the time it was converted for football.

However for Man City to move there they paid £20mil for the conversion cost, occupied it rent free until crowds exceeded the capacity at Maine Road, upon which they gave a proportion of that income as rent.

In the interests of FFP manipulation, they then renegotiated that deal to pay around £4mil a year rent, but get the naming rights to the stadium, which allowed for a £350mil 10 year deal to be concluded. Net profit to the club of £31mil per year on that deal.

 

[Deleted member 5849]

Cost of construction? Sale price?

The East Stand alone cost £4.3mil.

McGinnity told me personally (get me!) that the option to buy HR back was £6mil, which they were then going to sell straight back to the builders for £8mil. Trying to find the actual records of that transaction however, to back the man up!

 

[Skybluesquirrel]

However for Man City to move there they paid £20mil for the conversion cost, occupied it rent free until crowds exceeded the capacity at Maine Road, upon which they gave a proportion of that income as rent.

In the interests of FFP manipulation, they then renegotiated that deal to pay around £4mil a year rent, but get the naming rights to the stadium, which allowed for a £350mil 10 year deal to be concluded. Net profit to the club of £31mil per year on that deal.

We need a judicial review into the state subsidising commercial ventures up in Manchester then... Oh!

The sale of naming rights is a little contentious in this case, considering they were sold to the airline ran by the family that owned the club. Not sure Platini was too impressed!

Good example tho!

 

[Cheshire Sky Blue]

SISU state that they will build their new stadium for 12,000 seats is about £20 -25 million. Therefore the value of the RICOH has to be more than that. On the basis that if they don't get the RICOH that is what they will have to invest. So the RICOH is worth at least £20 million.

 

[Skybluesquirrel]

The East Stand alone cost £4.3mil.

McGinnity told me personally (get me!) that the option to buy HR back was £6mil, which they were then going to sell straight back to the builders for £8mil. Trying to find the actual records of that transaction however, to back the man up!

The football trust and M&B funded the majority of the costs to build the east stand

 

[Deleted member 5849]

The football trust and M&B funded the majority of the costs to build the east stand

Your question wasn't who paid for what.

 

[Badger]

I chose both, but if sold with very clear clauses that the stadium and a certain amount of parking space must remain with CCFC.

I think the only way SISU go is if they own the RICOH and can then sell on as one entity. I don't know the value of such a property and don't really care but surely if they both get valuation both will be miles apart but it gives a starting point for discussions somewhere in the middle.

 

[chiefdave]

I don't think splitting the Ricoh would be as easy as people think.

For me the best options is for SISU to take the following steps:
1) buy Higgs share of ACL, I believe the formula was for around £10m but a much lower offer was accepted
2) purchase CCC share of ACL
3) make a deal with the council to pay off the loan in return for the lease being converted to a rolling lease with peppercorn rent

You could possibly do all that for less than the cost of a cheap stadium in Warwickshire.

SISU get access to all Ricoh revenues, can develop etc. CCC maintain the security of owning the stadium and could put in trigger clauses that the lease is terminated if SISU attempt something dodgy - obviously written in a slightly more substantial legal term than something dodgy!

That way if, as SISU claim, it is the revenue they need they get it but by leaving the freehold with CCC it prevents SISU, or any future owners, from loading debt against the freehold.

 

[Skybluesquirrel]

Your question wasn't who paid for what.

So you would consider those loans/grants/investments to contribute to the value of HR when considering the construction of the East stand?

Do you consider the sale of the land to Tesco should be treated in exactly the same way when calculating a value for the Ricoh - all £59.5 million worth?

 

[Deleted member 5849]

So you would consider those loans/grants/investments to contribute to the value of HR when considering the construction of the East stand?

I would consider the cost of Highfield Road when sold to be less than the cost of building Highfield Road, yes.

 

[Skybluesquirrel]

I would consider the cost of Highfield Road when sold to be less than the cost of building Highfield Road, yes.

You missed out the second question.

 

[Deleted member 5849]

I answered the question you originally asked.

Highfield Road cost less to buy complete than it cost to build.

Equally, the cost of building the Ricoh or otherwise is totally irrelevant to its value... now.

Its value is its value, and any emotive talk of being built by taxpayers, charities, etc. is totally irrelevant to a 'fair' value, which is whatever it is.