COVENTRY City’s owners have accused the council of an ‘ongoing campaign to block the club’s development at every turn’ following our exclusive story that a council leaked email had proposed scuppering any move to Cov rugby’s Butts stadium.
It came as the council’s new leader George Duggins insisted he will not put up ‘roadblocks’ to Coventry rugby football club’s desire to acquire the Butts Park Arena’s head lease for redevelopment, and potentially a groundshare with the Sky Blues.
But, in an interview with the Coventry Observer, Coun Duggins also spoke of potential planning difficulties, and why he continues to insist any kind of ‘relationship’ with the football club’s owners Sisu would depend on it dropping all legal action against the council.
Some fans and commenters last week questioned such an apparent ‘trade off’, arguing anyone should have a right to legally challenge a public body’ decision, including the council’s sale of Coventry City’s Ricoh Arena home to rugby club London Wasps in 2014, the subject of a second Judicial Review application.
Sisu has responded with a statement today, which states…
“The owners of Coventry City FC were extremely disappointed but unsurprised to read the recent press report concerning the Council’s on-going campaign to block the development of the Club at every turn. To use its position as a freeholder to try and block a move to Butts Park Arena is a direct assault on the private ownership of the football club in any form.”
It also states:
“The fans and people of Coventry should question the motives of any elected Council seeking to prevent public review of its past decisions by blocking the future development of the Club.”
Many Sky Blues’ fans – responding to the leaked email we published last week – expressed anger that the council might seek to kill off exploratory talks over whether a Butts groundshare could make the two clubs more viable – and concern the council may instead be motivated to protect its Ricoh/Wasps project.
Coun Duggins’ interview follows our revelations exposed by the highly sensitive council email – leaked to us – and sent in January to Coventry Rugby Football Club chairman Jon Sharp.
It was sent as a response to Mr Sharp’s approaches to the council concerning his ambition to acquire a head lease and then redevelop the Butts Park Arena – where the council owns the freehold.
The he leaked council email proposed agreement only on the basis that no professional football or associated training should take place there for the rest of the 125-year lease – which would have scuppered any prospect of the Sky Blues moving to the Butts.
Council property management officer Nigel Clews, responding to our story last week, told BBC Coventry and Warwickshire the email, which mentioned him by name, had been sent as a ‘fishing expedition’ to try to flush out whether Mr Sharp’s intentions were to groundshare with the Sky Blues at an expanded Butts – as this newspaper had exclusively revealed last November.
The council email, reproduced in full on the Coventry Observer website, stated it was seeking the restrictions as “the council naturally wants to protect its position as well as the rugby club”.
Mr Clews claimed the ‘fishing expedition’ email achieved its aim because, in April, Mr Sharp had admitted to the council the groundshare plan, when Mr Sharp submitted proposals for an expanded initial 16,000-capacity stadium, said Mr Clew. Mr Sharp has told us it could rise to up to 25,000 if the Sky Blues won promotions.
Mr Clews’ claim that the leaked email had such hidden ulterior motives behind it raised questions as to whether such conduct was proper. The council’s codes of conduct require integrity, honesty, objectivity and transparency.
Mr Clews said he was now awaiting further information on Mr Sharp’s intentions of acquiring the head lease owned by former rugby club Chris Millerchip, and having the terms of the rugby club-owned sub-lease varied. The lease current includes protections built into it that only rugby can be played there, and it has a peppercorn rent.
Coun Duggins said decisions on the lease will likely go to his Labour group’s controlling council cabinet if and when the further information is received.
On that matter, he told us: “My own view is to veer towards, ‘Why not?’ and to say that wouldn’t be a problem.
“That’s my own personal view. I don’t believe our colleagues believe there is any mileage in doing otherwise, or in only doing things to be obstructive in these circumstances.
“Any planning application, if one comes in, will then be considered on its own merit (by the planning committee).. it would be looked at in good faith.
“There are huge issues that can flow from an application. Those issues have been well rehearsed in the media.”
Potential hurdles to be overcome have been raised, including by us back in November, including transport, parking and capacity at the Butts.
Coun Duggins added: “It doesn’t mean I’m personally opening up dialogue with the club’s owners.
“They have to end this litigious approach. I don’t move away from that. It isn’t doing the club any good or the council any good. They also have to pay us (legal) costs.”
He repeated this point when we asked if he would be prepared to meet with the football club’s managing director Chris Anderson – to learn more about their stated quest for crucial commercial revenues from a stadium, which they say is needed to be viable and to invest in players to push for promotions from League One.
Coun Duggins said: “It’s very difficult to have a constructive relationship while we have these Judicial Reviews hanging over us.
“I’ve not had any invitation”, he added.
“I don’t think the issues of the football club are anything to do with the council. It’s their decisions as to how they run the business,” said Coun Duggins.
“The football club has an arrangement with Wasps. It’s through Arena Coventry Limited (Wasps owned Ricoh management firm ACL). They are issues they need to explore with them rather than us.”
We pointed him to claims by Mr Anderson, in an exclusive interview with us last week, that the football club calculated it would return a paltry circa £75,000 from the entire season from Ricoh Arena concourse catering sales and car parking, a large cut of which goes to Wasps; while the club also gets nothing from non-matchday commercial stadium activities.
We also asked Coun Duggins whether he felt significant revenues would ever be handed over by Wasps to the Sky Blues, after Mr Anderson said recent discussions had come to nought; and given Wasps are paying above £2million a year alone on interest payments to service £35million of loans from retail bond holders.
We also stated the city’s two great traditional sporting institutions must surely be regarded by any council leader as great economic, cultural and sporting assets for Coventry.
Coun Duggins said he would like Coventry City to be the next Leicester City, as Premiership champions, and called on the club’s owners to publicly produce their plans for the club.
He added: “My own view is that it’s the club itself who are the people who have to decide what they want to do themselves.
“I don’t believe I’m putting any roadblocks up. It’s for them to decide how to take their decisions forward.”
He denied the council had anything to hide, or be fearful of, from a challenge to the deal to sell the Ricoh to Wasps, given his insistence legal challenges must first be dropped before any ‘relationship’ could be considered.
He added: “You say people have a right to legal challenges. I’m not saying people don’t have the right to challenge. They do.
“But when it becomes a way of dealing with issues like the norm… when people want to work together in partnership, it shouldn’t have to be like that.”
In response to us pointing out the club’s owners were not seeking a partnership, just vital stadium commercial revenues without undue council interference, Coun Duggins repeated his intention was not to put up ‘roadblocks’.
THE SISU STATEMENT ALSO STATES:
(The statement outlines failed talks in 2012 for Coventry City to acquire a stake in the Ricoh, a resulting administration process which cost the club 20 League points, and a ‘smear campaign’ at that time involving council-hired PR firm Weber Shandwick, supporting documents for which were made available on the council’s website during ethics committee proceedings in December). The statement continues..
“The Court actions have exposed the hypocrisy of the Council and were entirely necessary to break the stranglehold that the Council has had over the Club since the ill-fated stadium deal in 2003. SISU are not the first owners to suffer at the hands of the Council.
Contrary to its public statements, the Council was a net beneficiary from the payments made by Tesco for the land. The £21m loaned by the Council for the building of the Ricoh Arena in 2003 was repaid in full by ACL through its loan with Yorkshire Bank. The high cost of the loan to ACL, both in interest and loan repayments, meant ACL was hampered from reducing the extortionate rent that the football club had been forced to pay since 2005. One has to ask, if the loan to ACL paid for the construction and Tesco paid for the development, what did the Council actually invest and why did it end up owning 50% of the stadium in the first place?
In 2003, the Club’s then board of directors admitted that it could not afford legal advice and had no option but to accept the Council’s onerous terms.
The Club started by owning the land and should have benefitted from the overall development deal. Tesco may surely wonder where the money they paid ended up and one thing appears clear, the 50% ownership of the stadium was a windfall to the Council.
The deal in 2003 committed the Club to a lease it could not afford in a stadium it was expected to own and took the rights to F&B and non-match day revenue from the club. Since that time, Compass have made advance cash payments to fund the on-going ACL deficit, and continue to do so, most recently with an £8m received as described in the 2015 accounts.
To be successful, the Club must have a stadium where all the revenue from matches goes towards the success of the football club so the club will benefit from its own success. Even the Council has accepted this as a simple economic truth; so why the Council has repeatedly accepted this principle and blocked its achievement at every stage is a major point of concern.
Why did the Council sell its interests to WASPS, but never offer that deal to the Club? Why would it loan £14,400,000 to ACL when the Council had no capital invested (fully repaid)? And, why was ACL sold to WASPS for £5.6m with the benefit of the 250 years lease for which they paid £1m, promptly revalued to £48,500,000 and used as security to repay the £14,400,000?
It is true that early discussions have commenced to explore the potential of Butts Park as a real possibility. This site would have significant benefits for the fans and keep the Club in the City Centre. It would also bring development to an area which needs it and whilst the owners realise no site or solution will be perfect, the advantages to the future of the football club are obvious.
… Legal action has been and continues to be essential because that action is the only check on this Council’s abuses. The question whether the Council should act the way it has and whether it has gone beyond its legal mandate was always going to test the edges of the law, which it has. The hope is that the Supreme Court will recognise the public importance of this issue and review the Court of Appeal decision (that the council’s January 2013 loan of £14.4million to ACL was not unlawful). The transparency created by the proceedings is its own justification.
Those who run businesses in Coventry are entitled to do so without Government using its commercial power and resources to advance ideological or political aims or simply to destroy businesses they disapprove of. The principles which underpin the court proceedings are relevant to every business in Coventry. SISU can defend itself; others may not be able to do so.
Since the Club was acquired, three leaders have taken over an organisation that has been secretive, undemocratic and heavily influenced by executives whose advice to the Councillors has been less than full or independent. Councillors have been forced to sign confidentiality agreements and decisions, which whilst clearly of public interest, have been made behind closed doors.
A forced sale of the Club to a new owner would have perpetuated all of the same problems suffered by the Club in 2003, and it would have played into the hands of those who have caused the problems. A successful club is good for fans and owners alike and the first half of the 2016 season has demonstrated what the Club can do.
The owners will challenge the past conduct of the Council relating to the sale of ACL to the WASPS and the extension of a long 250-year lease for £1m which was then re-valued the following day for £48,500,000.
There are two separate components of this challenge. The first is to call the Council to account on what is an obvious abuse. The second is to shed light on the motives and expose the damage to the Club. The owners are very likely to refer the matter to the European Commission to request investigation.
The owners will pursue the future ownership of a stadium where the Club has the security and revenue potential to justify significant investment.
…If the decision made behind closed doors to sell to WASPS and extend the lease to 250 years for much less than the independent company Strutt and Parker valued the extended lease was lawful, then the Council should have no qualms about justifying it before a court. It should certainly not be seeking to prevent that review by exercising its commercial power to restrict future development.
The fans and people of Coventry should question the motives of any elected Council seeking to prevent public review of its past decisions by blocking the future development of the Club.
There may be differences of opinion as to whether SISU are “good” owners, but it is important to remember the motives of the fan base and the owners are completely aligned. The owners want a future for a Coventry City FC which is sustainable, profitable and ultimately, successful.