This might be of interest:
CONTRACTS were signed for the building of the pounds 113 million Ricoh Arena in October 2003.
The land and buildings are owned by a Coventry City Council wholly-owned subsidiary company, Coventry North Regeneration.
It leases them to Arena Coventry Ltd, which runs the whole complex. ACL is a joint venture between the council and the Alan Edward Higgs charity and will split any eventual profits.
City development director John McGuigan said the long-term prospects for the company were good, adding: "It's not the council's intention to be investing any more money in Arena Coventry Ltd."
Alan Edward Higgs charity took over Coventry City Football Club's original share in the venture.
The cost stacked up as follows:
£59million from sale of land to Tesco.
£10million one-off investment and
£21million council loan (since repaid) and pounds 2million to speed up the arena's completion, of which it got about pounds 400,000 back from contractors Laing O'Rourke.
£10million from Coventry City Football Club.
£4.8million from Advantage West Midlands.
£4.7million from European grants.
£5million from land sales.
Another interesting quote from Paul Fletcher too in this paragraph:
By the time Fletcher joined the project the deal for the land - originally set up by Richardson - had been struck. The club had planned to buy 72 acres of land at the old gas works at Foleshill which would cost pounds 20m to buy and decontaminate. They then agreed to sell half of the land to Tesco for pounds 62.5m, leaving a profit of around pounds 40m to build the stadium. But the club didn't have the funds to complete the deal so a joint venture between the club and the council with both owning 50 per of the equity was agreed. However, Fletcher revealed:
"Mysteriously, once the purchase of the land and sale to Tesco had been completed, Coventry City Council informed the football club that they were unable to share with them the profit from the sale of the land due to 'state aid' implications and instead offered them 50 per cent share in the company that would operate the Ricoh Arena but the council would own all the equity in the property."
Fletcher revealed the "state aid fiasco" took 12 months to sort out and cost pounds 1m in lawyers' fees. As compensation, the council offered the club 50 per cent of operating profit from the Ricoh. But the club's massive financial problems came to a head following relegation from the Premier League and under the chairmanship of Mike McGinnity, City were so desperate to stave off administration that they sold their shares to the Higgs Charitable Trust for a "snip" of around pounds 4m at a time Fletcher says theArena had been valued at pounds 37m, therefore making their share worth around pounds 18.5m. He concludes by urging the council and Higgs Charity to sell their shares back to the club a"fair and equitable price". insisting football stadiums should be owned by clubs not local authorities and charitable trusts - which is exactly what current Sky Blues owners SISU are trying to negotiate at this moment in time in order to prevent the club from going out of business.
The whole Ricoh project seemed to fall apart over a relatively small amount of money. By the time it all collapsed and CCC came into the picture a lot of the funds were already in place, such as the money from Tesco. Seem to recall from the council funding document at the conclusion of the project the actual amount they put into the build was relatively small.
How different might things be now if instead of taking over the project they had loaded the club the money in a similar fashion to the loan they have given to ACL?
Can't remember why things went so off budget, was it just that the money had been used to cover a lack of funds generally in day to day operations or was it the decontamination. Have a vague memory that cost a lot more than was first expected but can't recall if that was the clubs responsibility.
I think the Ricoh was a decent idea poorly executed. There seemed to be little contingency for anything going wrong or even us no longer being a premier league team. We then found ourselves in a position where we had little choice other than to agree to whatever deal was offered, no matter how bad it was.
