Cost of Building

[Irate Ian]

Have not seen for myself yet, but someone has mentioned the reporting of building cost of stadium/development to have risen to £54 million, which I think is a massive increase [a near doubling ?] on original projected/estimated figures.

May have been in April Blues News - must get myself a copy. Before I do, can anyone who already has a copy, supply details across this forum.

 

[Sherif H]

Ian...using very simple high level numbers, the current costs for a stadium are at the £1600 per seat level, which would mean that for the stadium alone, SUFC will be looking at approximately £35.2m. Take into account the construction of the training facility, hosuing and the retail units, in addition to caveats attached to the planning permission, then you will see how this figure is achieved. Let us not forget, this is a high quality development, and the Club will also likely be paying big money for the services of a World-reknowned sports architecture practice such as HOK.

 

[shrimper4life]

A project like this always rises in costs from the initial estimated figures. i've never seen a stadium which has actually cost less than its projected figures.

 

[EastStandBlue]

£1600 per seat... Let's say each ticket sells at an average of £18. So, to Break even purely on Ticket Prices, Each seat has to be sold 89 times... So roughly 2 1/2 seasons. Not bad, is it...

 

[steveo]

Each seat has to be sold 89 times... So roughly 2 1/2 seasons. Not bad, is it...

Probably not that simple, you need to cover your runing costs for that period which includes players and wages etc

 

[Sherif H]

Probably not that simple, you need to cover your runing costs for that period which includes players and wages etc

That also assumes a 22,000 sell-out for each game. Also, yes, you would need to cover the running costs for the club and stadium, but also add in the revenue generated from lease of the retail units and sale/lease of the residential space.

 

[EastStandBlue]

Obviously running costs need to be considered, and there won't be a 22,000 sell out every game, far from it. It's just a £35.2m Build cost at £1600 per seat seems a little daunting, and it's really not that expensive.

 

[Andyhsufc]

A project like this always rises in costs from the initial estimated figures. i've never seen a stadium which has actually cost less than its projected figures.

Arsenal had a fixed price contract which was a good idea as although you pay a bit more for this, any extra costs have to be covered by the builders. Shame Wembley didn't do that!

 

[Up the Shrimpers]

Have not seen for myseff yet, but someone has mentioned the reporting of building cost of stadium/development to have risen to £54 million, which I think is a massive increase [a near doubling ?] on original projected/estimated figures.

May have been in April Blues News - must get myself a copy. Before I do, can anyone who already has a copy, supply details across this forum.

I seem to remember the original estimate was £25m as per my thread quite a while ago.

http://www.shrimperzone.com/vb/showthread.php?t=19183

 

[Sherif H]

Arsenal had a fixed price contract which was a good idea as although you pay a bit more for this, any extra costs have to be covered by the builders. Shame Wembley didn't do that!

That is just the problem...Wembley was a design and build contract which was a fixed price contract...that is what was so scandalous about the amount of money wasted. Was attributable to vast amounts of changes/additions throughout the contract period.

 

[Andyhsufc]

That is just the problem...Wembley was a design and build contract which was a fixed price contract...that is what was so scandalous about the amount of money wasted. Was attributable to vast amounts of changes/additions throughout the contract period.

So the only reason the price went up so much was because the FA made changes during the building of the stadium for which they are responsible for?

 

[Irate Ian]

Being Long Term Members of a Club

Ian...using very simple high level numbers, the current costs for a stadium are at the £1600 per seat level, which would mean that for the stadium alone, SUFC will be looking at approximately £35.2m. Take into account the construction of the training facility, hosuing and the retail units, in addition to caveats attached to the planning permission, then you will see how this figure is achieved. Let us not forget, this is a high quality development, and the Club will also likely be paying big money for the services of a World-reknowned sports architecture practice such as HOK.

Thinking alloud here, as a mere exercise: taking your figures as a guide and in the knowledge that Col U want £520 a season for 08/09, if say a 1, 2, 3, 4 5, 6, 7, 8, 9, 10, 15 year fixed & discounted price season cards were to be offered now and in advance, useable at RH or Fossetts, would that not generate a massive injection of cash to fund [a] partly the building {say £1600 of} and remainder towards players contracts and wages during the development process and into the future years beyond ?

That would require one mother of a Trust in both the management and their support of the exisiting supporters, [a two way street] - which maybe is what being a member of a club is all about ?

This would also have the beneficial effect of bringing on board even greater numbers of supporters/seasons now so that current members/supporters are recognised as the foundation lifeblood.

We have all [or many] have contributed by simply turning up and by putting our bums on RH seats to help keep the club afloat during difficult times and it takes more than mere money to commit to do that, as will be the case at Fossetts when and if the going gets tough.

One size would not suit all but everyone's pocket could be acommodated, it could be likened to giving the club an interest free loan in return for a fixed deal on pricing.

Imagine lets say at a lower estimate of say 4,000 x an average £250 = £1M or 6,000 x £250 = £1.5M.

If the average were £1,000 then the figures jump to £4M/£6M.

Many hands make light work.

Maybe this is all jibberish and is a non-starter or runner ?

 

[jrwshrimper]

Thinking alloud here, as a mere exercise: taking your figures as a guide and in the knowledge that Col U want £520 a season for 08/09, if say a 1, 2, 3, 4 5, 6, 7, 8, 9, 10, 15 year fixed & discounted price season cards were to be offered now and in advance, useable at RH or Fossetts, would that not generate a massive injection of cash to fund [a] partly the building {say £1600 of} and remainder towards players contracts and wages during the development process and into the future years beyond ?

That would require one mother of a Trust in both the management and their support of the exisiting supporters, [a two way street] - which maybe is what being a member of a club is all about ?

This would also have the beneficial effect of bringing on board even greater numbers of supporters/seasons now so that current members/supporters are recognised as the foundation lifeblood.

We have all [or many] have contributed by simply turning up and by putting our bums on RH seats to help keep the club afloat during difficult times and it takes more than mere money to commit to do that, as will be the case at Fossetts when and if the going gets tough.

One size would not suit all but everyone's pocket could be acommodated, it could be likened to giving the club an interest free loan in return for a fixed deal on pricing.

Imagine lets say at a lower estimate of say 4,000 x an average £250 = £1M or 6,000 x £250 = £1.5M.

If the average were £1,000 then the figures jump to £4M/£6M.

Many hands make light work.

Maybe this is all jibberish and is a non-starter or runner ?

are you talking about buying season cards for say the next 5 years, if so im with you that surely would give the club a big cash injection but they would have to sell alot to make a big difference. Also if the club were successful which we hope to be the club would want to up the price of season cards but would not be able to as people would of bought for the next few years at a certain price. so it has it downfall

 

[sufcintheprem]

Without wanting to jump the gun too much, we're likely to make a decent amount of money from the playoffs. Two huge teams and a potential showdown at Wembley which , with the teams involved, may even sell out.

That would certainly help cover a decent chunk of stadium cost.

 

[Sherif H]

Without wanting to jump the gun too much, we're likely to make a decent amount of money from the playoffs. Two huge teams and a potential showdown at Wembley which , with the teams involved, may even sell out.

That would certainly help cover a decent chunk of stadium cost.

With respect I don't think that will even touch the sides. I think the Roots Hall development is likely to cover a large chunk of the costs of FF.

 

[londonblue]

Without wanting to jump the gun too much, we're likely to make a decent amount of money from the playoffs. Two huge teams and a potential showdown at Wembley which , with the teams involved, may even sell out.

That would certainly help cover a decent chunk of stadium cost.

The stadium will be funded mainly by sale of Roots Hall. The last I heard there were going to be 250 flats built there. At £150,000 a pop that's already £37.5m. Add on the amount Sainsbury's will have to pay for their bit, the 50 or so flats that will be part of FF, and the deposits people will pay to reserve their shop at FF and hey presto, you have it paid for.

I'm also probably being a bit simplistic here, but that is more likely to cover the costs than three matches in the play offs!

 

[TJC]

My concern is that somewhere along the line money has to be borrowed to finance the build (i.e. Build flats/supermarket on Roots Hall) to get the cash for the next stage. With money being hard to come by at the moment with the credit crunch, is there any concern that the funds might be hard to come by in the first instance?

 

[Sherif H]

My concern is that somewhere along the line money has to be borrowed to finance the build (i.e. Build flats/supermarket on Roots Hall) to get the cash for the next stage. With money being hard to come by at the moment with the credit crunch, is there any concern that the funds might be hard to come by in the first instance?

If it is a sound investment and the business plan strongly backs this up, the Bank will usually play ball.
Do remember however that it may not necessarily be the Bank lending the Club money...where construction projects are concerned, there are a multitude of ways to create funding. It could for instance, be a partnership arrangement, or lease and leaseback etc...

 

[Andyhsufc]

The stadium will be funded mainly by sale of Roots Hall. The last I heard there were going to be 250 flats built there. At £150,000 a pop that's already £37.5m. Add on the amount Sainsbury's will have to pay for their bit, the 50 or so flats that will be part of FF, and the deposits people will pay to reserve their shop at FF and hey presto, you have it paid for.

I'm also probably being a bit simplistic here, but that is more likely to cover the costs than three matches in the play offs!

I think that is very simplistic as the 37.5m is revenue and once you factor in building and others fees, you are probs looking at 20-25m profit. The sainsburys bit wont be more than a couple of million and the sort of profit you are going to make on 50 flats is around 7-9m so I still feel the club will be saddled with a lot of debt

 

[Irate Ian]

Yes, either 1, 2 or 3, 4 or 5 years or more fixed rate deals, just like your mortgage.

Effectively we give the club an interest free loan in return for a fixed/discounted price so that the price of your season card is pegged for the whole period.

Our gamble is that we can pay our loans off quicker say over 2.5 years saving on interest, which would give us 2.5 years free home football to enable us to take in more away games or save for the next 5 year fixed deal !

Provided the season cards are transferrable or usable by others, when and if our circumstances change and some guarantees are in built to protect our investment, then there might be quite a number who would take up.

For example, if someone had offered our price: £380 or say £400 fixed for say 3 years to Col U supporters, against the £520 p.a., the lower price over longer period might have been attractive ?

Viz £1200 over 3 years = minimum saving of £360, as unlikely their current prices would substantially reduce, even if they were to suffer double relegation.