October 1st, 2016

‘Hell freezes over’ before council sells Ricoh to Sky Blues

Updated: 4:39 pm, May 07, 2015

THIS Coventry City Council document we reveal today raises further questions over whether council leader Ann Lucas misled the public over the sale of the Ricoh Arena company to rugby club Wasps.

The handwritten notes from a meeting of leading Labour councillors, on the document dated August 13, 2012, appear to show one – under the name “Anne” – was so hostile to Coventry City FC’s owners Sisu they suggested a deal should only be done “when hell freezes over”.

Asked about claims on the Coventry Observer website last week that she had misled the public over the council’s Ricoh deal with Wasps last October, Coun Lucas told BBC Coventry and Warwickshire’s Shane O’Connor the council had “always hoped it would be the Sky Blues” buying into the Ricoh Arena and “her door was always open” to them.

The document was submitted as evidence to the High Court last year by Coventry City Football Club’s parent company Sisu in a judicial review into Sisu’s claims the council’s £14million taxpayer loan to Arena Coventry Limited (ACL) in January, 2013 had been unlawful.

It appears to contain handwritten notes about what was stated at the meeting by leading Labour councillors. One of the notes clearly states: “Anne – deal with Sisu when hell freezes over.”

Ann Lucas was a cabinet member at the time, before she became council leader in a leadership coup in May, 2013.

The Sky Blues have also alleged council finance officer Chris West had told them in later private talks that hell would freeze over before they did a Ricoh deal.

Sisu’s barrister Rhodri Thompson QC had told the judicial review the document appeared to contain typed material from “presentation slides” with handwritten notes from a Labour group meeting.

He continued: “You’ll see that there is a note attributed to Anne, who we anticipate is possibly the current leader of the council, but it may be some other councillor, it says: “Deal with Sisu when hell freezes over.”

There was no other councillor in cabinet named Ann.

Invited today to give a full explanation for the documents and notes, neither Coun Lucas or Mr West, or the council, denied it was Ann Lucas who had said: “Deal with Sisu when hell freezes over.” Nor did the council deny the handwritten notes had been written by Mr West.

The printed material on the document presents potential options to councillors for the future of ACL, at a time when the football club was withholding monthly payments on its £1.3million rent at the Ricoh, which many accepted was extortionate.

It came amid talks which later collapsed over the council and football club jointly owning the Ricoh management company.

A heads of terms agreement in principle had been signed between Sisu and ACL’s joint owners the Alan Edward Higgs Charity for its half-share in ACL. The council had the power to block any deal for the charity’s shares.

The talks collapsed, ACL began legal proceedings for rent non-payment and the council bailed out the Ricoh by purchasing its loan to Yorkshire Bank for £14million in what Sisu maintained was a failed attempt to remove them as CCFC owners.

Mr Justice Leggatt, in a separate court hearing, ruled a deal between the charity and Sisu had “fallen away” because neither side had ultimately wanted one, and because it was thought by the charity that the Labour council would veto it.

Council senior executives Mr West and Martin Reeves, who had also been ACL directors, were the main council officers and advisors to councillors throughout the CCFC/Ricoh dispute, making numerous presentations to them.

It emerged yesterday that Sisu’s appeal against the judicial review verdict, which had thrown out their claims, had been rejected by the High Court.

But Sisu still has the option to appeal orally. In December, Sisu also initiated separate but related court action which is believed to be ongoing. Its stated purpose is partly to examine the terms of the £14million council taxpayer loan to ACL under the Wasps deal.

London Wasps Holdings Limited, whose last reported accounts show losses of £3.2million, now owns 100 per cent of ACL, following the deal reported to be £5.5million for the shares, plus taking on the loan. The courts had heard similar figures were discussed in 2012 in talks with Sisu, which had offered to write off the loan.

The Coventry Observer today sought a full explanation for the document and handwritten notes on it from the council, Coun Lucas, and Mr West.

We received the following statement from a council “spokesperson”: “The handwritten note is a matter of public record and was widely reported during the judicial review hearing. We have nothing further to add.”

The council has also today responded to our revelations yesterday which disproved Coun Lucas’s false public claim that the football club had only been interested in the Ricoh Arena freehold.

We revealed a leaked letter from Sisu’s Joy Seppala to Coun Lucas, dated November 2013, days after they met for talks over a stadium sale. It made clear Sisu was also prepared to discuss a long leasehold purchase. ACL lease from the council as the Ricoh’s freehold owners was later extended to a reported 250 years under the Wasps deal.

In December 2013, in a public meeting reported in the press, then CCFC chief executive Tim Fisher had also stated the club would be prepared to consider a freehold or long lease.

Last week, we questioned whether Coun Lucas had misled city voters, taxpayers and Sky Blues fans with false claims that ACL was “very profitable” in 2013/4 without the Sky Blues playing there, and her claims the day after councillors agreed the Wasps deal on October 7 that it was “washing its face” .

Last week she admitted to us it was not washing its face after all. It came after ACL’s newly published accounts for the year up to May 31, 2014, revealed losses of £400,000.

Critics yesterday called for more openness and investigation over the entire deal. Leading Labour councillors have always maintained they would only make loans underwritten by city taxpayers to viable and sustainable businesses – amid unprecedented cuts to council jobs and services.

We received the following council statement: “On the overwhelming majority of occasions SISU had insisted that they were only interested in the freehold of the Ricoh Arena.

“In practice, at no stage did SISU make any offer to the council for the freehold of the Arena, or for its shares in ACL with or without a long lease.

The quote from Ms Seppala’s letter is interesting: ‘In any scenario we need a freehold or clean restriction-free long lease.’ This can only be interpreted as meaning a lease of the Ricoh Arena direct to SISU/CCFC from the city council, and implies that in some way ACL can just be ignored.

“In practice at this point ACL held a lease with 40 years to run, and of course 50 per cent of ACL was owned by the Higgs Charity. There was simply no possibility of a ‘clean restriction free long lease’.

“The council has now sold its shares in ACL as a going concern to Wasps for a good price, based on a valuation of the business that far exceeds that estimated by SISU in the JR hearing. The debt to the council remains secured and payable, and all payments are up to date.

“ACL made a trading loss in 2013/14, but this came on the back of several years of healthy profit, including in the very challenging 2012/13 during which CCFC went on an illegal rent strike.

“Few companies make profits every year. ACL has a positive net profit to date and positive shareholder funds. The position going forward, with both CCFC and Wasps playing at the Arena looks good. Wasps are clearly confident that they can make the new arrangements work very profitably.”

Andrew Russell, professor of politics at Manchester University and a Sky Blues fan, yesterday questioned whether, with false claims exposed, anybody could now trust the “secretive” council’s claims that the taxpayer-supported Wasps deal will ultimately benefit Coventry’s economy.

Many Coventry City fans angry over the sale of their loss-making club’s stadium to former High Wycombe-based Wasps have argued at least the same deal should have first been pro-actively offered to the club.

The council had kept the Wasps deal a closely guarded secret and had not even notified Coventry Rugby Club, which at the time complained about being kept in the dark.

The council’s code of conduct obliges the council and councillors to be open and transparent with the public.

This Coventry council document with handwritten notes reveals animosity towards Sky Blues’ owners Sisu over Ricoh Arena talks and the words: “Anne – deal with Sisu when hell freezes over”

Ann Lucas. 21.013.005.cov.nc1

Council leader Ann Lucas on the steps of Council House.21.013.005.cov.nc1

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