Irate Ian
Members
- Joined
- Dec 1, 2004
- Messages
- 2,070
Q1. Who [names of all consortia members] or what corporation [and names of their shareholders] are the beneficial owners of the land on which the Fossetts development is proposed.
A1. The immediate parent company of Southend United Football Club Ltd is South Eastern Leisure (UK) Ltd, of which I, via my corporate ownership, am a 100% share holder. There are no “consortia members”. It took Delancey and myself a while to come to terms for me to acquire their 50% interest in the parent company and I am in no hurry to re-enter into a joint venture! The beneficial owners of the Fossetts Farm development are me and my immediate family.
Q2. In consideration for the release of restrictive covenant of use of land at Roots Hall now or previously, what if any long term security of tenure are SUFC to be granted at the proposed new stadia and by what vehicle or deed.
A2. I do not know what you mean by “release of restrictive covenant of use of land at Roots Hall”. The restrictive covenants recited in the title are not enforceable and in any event as a quid pro quo the entire proposal is structured on the development of the New Stadium. The Club will not be moving from Roots Hall until the new stadiums is complete and fit for football.
Q3. What terms of lease and anticipated rent is to be payable [and to whom] by SUFC at Fossetts. Also what termly rent reviews are proposed.
A3. The Club currently benefits from a short term lease at Roots Hall and which has been renewed at least twice. The rent was de-capped to represent 10% of the initial investment at the time i.e. £4m – to prevent an almost certain administration – providing for an annual rent of £400,000. As you will know the Club has not paid one penny in rent in respect of Roots Hall and in very recent years I have written off some £2.8m in rent arrears so as to improve the Club’s balance sheet. Furthermore it is not my intention to charge the Club any rent while it remains here at Roots Hall.
Under the terms of the new stadium a lease in precisely the same format will exist for the benefit of the Club at the new stadium but for a longer term to ensure the security of tenure that you allude to. There will be a Stadium Operating Company which will collect all the rental income from the stadium development and redistribute this, including for the benefit of the Club. This will underpin its gate receipts and, we anticipate, give the Club an edge over its competitors. As to whether any rent will be paid or accrued will largely depend on the Club’s success - but in any event it is intended that there will be quarterly reviews, as indeed is the case at present.
Q3a Does Ron feel that because of his possible need to maximise profits from the development, that he has any possible conflict of interest with the needs of SUFC to remain solvent during its use and occupation of the stadium.
A3a. I do not feel there is a need to maximise profits from the development. If this were the objective then I would not be building a 22,000 seater stadium of such high specification. Colchester Stadium cost £14m, some £30, less than that estimated to complete what will be an iconic building for SUFC to thrive and succeed.
Even now there are supporters who suggest we could compete in the Championship from a stadium of 15,000 seats. If I were to take that “advice” I could save a minimum of £14m in construction costs. Similarly there is no need to include a hotel at a further cost of £10m. Therefore if I was seeking to maximise property profits (if such a thing still exists!) there would have been many opportunities to do so.
Q3b If the immediate landlord sells the freehold, will any provision for SUFC being protrected against eviction be envisaged.
A3b. If the freehold of the stadium were to be sold at some future date SUFC would be protected by the terms of its lease. I would never leave it in a position to risk “eviction”. I regard that comment/question as a strange observation when the entire purpose of this exercise is to bring success to the Club so that it can maximise its potential and compete in the upper echelons of the Championship. It is certainly not designed to see the Club fail.
Q3c In the event of SUFC Ltd entering any form of Insolvency, will the football team trading under the name of Southend United be given first refusal to continue use and occupation under identical terms as SUFC Ltd under the proposed Lease or Trust Deed so that perpetual occupation by any re-incarnation of Southend United only be first assured ?
A3c. As I say above, the purpose of this structure is to underpin the Club’s financial security. However I am not a prophet; I cannot predict what the ultimate future may hold save I am creating a framework to secure the Club’s future and tenure. In reality very few clubs go out of business and if there were future financial problems for the Club I would suggest the Club and its new home – which we are in the throes of creating – will be a very attractive investment to any would-be buyer.
Q4. Who will be [a] the immediate and the residual landlord.
A4. The immediate landlord would be the Stadium Operating Company. I have not yet thought of a name for that entity (SOC is halfway there!) but I will be represented on the Board along with others who have Southend United Football Club’s interests at heart. By “residual landlord” you may mean ultimate and, of course, here again this would fall under the umbrella of beneficial ownership as in 1 above.
Q5. Will there be a right of forfeiture of lease for faliure to pay rent on a timely basis or other covenants.
A5. All institutional leases have the right of forfeiture, as does the lease the Club holds at present. As I say above, over the past nine years the Club has paid no rent at Roots Hall and there has been no question as to its right to occupy. The lease structure will be the same (again as I say above) at the new stadium and there will be no restrictive covenants to undermine the Club’s interests.
Q6. Will SUFC have sole use of the stadium and capability to derive benefit of income from other permitted uses.
A6. SUFC will not have sole use of the stadium as the west stand will be occupied by a number of parties including a hotel and other ancillary uses such as offices, all of which will provide an income to the benefit of the stadium operating company which can then flow, as directed by that Board, to the benefit of the Football Club as appropriate. Additionally under the current approval there is also the right to hold concerts on limited occasions throughout the year. If I were able to include – subject to the Council’s approval – an arena as part of the stadium structure (encompassing the west stand seating and facilities) this would have enormous synergy providing still further income for the operating company and Football Club. I am currently undertaking a feasibility study in this connection. If this proves viable and consent is forthcoming then this phase of construction would be integrated within the programme.
Q7. What other uses are envisaged.
A7. See 6 above
Q8. Does RM envisage SUFC being capable of meeting payment of rent based upon the projected operating costs of SUFC at the new stadium.
A8. The answer is yes, but as I say in 3 above whether the rent is paid or written off will be a matter for the stadium operating company and will be determined entirely by the success of the Club. Which, of course, is pivotal to this entire exercise.
A1. The immediate parent company of Southend United Football Club Ltd is South Eastern Leisure (UK) Ltd, of which I, via my corporate ownership, am a 100% share holder. There are no “consortia members”. It took Delancey and myself a while to come to terms for me to acquire their 50% interest in the parent company and I am in no hurry to re-enter into a joint venture! The beneficial owners of the Fossetts Farm development are me and my immediate family.
Q2. In consideration for the release of restrictive covenant of use of land at Roots Hall now or previously, what if any long term security of tenure are SUFC to be granted at the proposed new stadia and by what vehicle or deed.
A2. I do not know what you mean by “release of restrictive covenant of use of land at Roots Hall”. The restrictive covenants recited in the title are not enforceable and in any event as a quid pro quo the entire proposal is structured on the development of the New Stadium. The Club will not be moving from Roots Hall until the new stadiums is complete and fit for football.
Q3. What terms of lease and anticipated rent is to be payable [and to whom] by SUFC at Fossetts. Also what termly rent reviews are proposed.
A3. The Club currently benefits from a short term lease at Roots Hall and which has been renewed at least twice. The rent was de-capped to represent 10% of the initial investment at the time i.e. £4m – to prevent an almost certain administration – providing for an annual rent of £400,000. As you will know the Club has not paid one penny in rent in respect of Roots Hall and in very recent years I have written off some £2.8m in rent arrears so as to improve the Club’s balance sheet. Furthermore it is not my intention to charge the Club any rent while it remains here at Roots Hall.
Under the terms of the new stadium a lease in precisely the same format will exist for the benefit of the Club at the new stadium but for a longer term to ensure the security of tenure that you allude to. There will be a Stadium Operating Company which will collect all the rental income from the stadium development and redistribute this, including for the benefit of the Club. This will underpin its gate receipts and, we anticipate, give the Club an edge over its competitors. As to whether any rent will be paid or accrued will largely depend on the Club’s success - but in any event it is intended that there will be quarterly reviews, as indeed is the case at present.
Q3a Does Ron feel that because of his possible need to maximise profits from the development, that he has any possible conflict of interest with the needs of SUFC to remain solvent during its use and occupation of the stadium.
A3a. I do not feel there is a need to maximise profits from the development. If this were the objective then I would not be building a 22,000 seater stadium of such high specification. Colchester Stadium cost £14m, some £30, less than that estimated to complete what will be an iconic building for SUFC to thrive and succeed.
Even now there are supporters who suggest we could compete in the Championship from a stadium of 15,000 seats. If I were to take that “advice” I could save a minimum of £14m in construction costs. Similarly there is no need to include a hotel at a further cost of £10m. Therefore if I was seeking to maximise property profits (if such a thing still exists!) there would have been many opportunities to do so.
Q3b If the immediate landlord sells the freehold, will any provision for SUFC being protrected against eviction be envisaged.
A3b. If the freehold of the stadium were to be sold at some future date SUFC would be protected by the terms of its lease. I would never leave it in a position to risk “eviction”. I regard that comment/question as a strange observation when the entire purpose of this exercise is to bring success to the Club so that it can maximise its potential and compete in the upper echelons of the Championship. It is certainly not designed to see the Club fail.
Q3c In the event of SUFC Ltd entering any form of Insolvency, will the football team trading under the name of Southend United be given first refusal to continue use and occupation under identical terms as SUFC Ltd under the proposed Lease or Trust Deed so that perpetual occupation by any re-incarnation of Southend United only be first assured ?
A3c. As I say above, the purpose of this structure is to underpin the Club’s financial security. However I am not a prophet; I cannot predict what the ultimate future may hold save I am creating a framework to secure the Club’s future and tenure. In reality very few clubs go out of business and if there were future financial problems for the Club I would suggest the Club and its new home – which we are in the throes of creating – will be a very attractive investment to any would-be buyer.
Q4. Who will be [a] the immediate and the residual landlord.
A4. The immediate landlord would be the Stadium Operating Company. I have not yet thought of a name for that entity (SOC is halfway there!) but I will be represented on the Board along with others who have Southend United Football Club’s interests at heart. By “residual landlord” you may mean ultimate and, of course, here again this would fall under the umbrella of beneficial ownership as in 1 above.
Q5. Will there be a right of forfeiture of lease for faliure to pay rent on a timely basis or other covenants.
A5. All institutional leases have the right of forfeiture, as does the lease the Club holds at present. As I say above, over the past nine years the Club has paid no rent at Roots Hall and there has been no question as to its right to occupy. The lease structure will be the same (again as I say above) at the new stadium and there will be no restrictive covenants to undermine the Club’s interests.
Q6. Will SUFC have sole use of the stadium and capability to derive benefit of income from other permitted uses.
A6. SUFC will not have sole use of the stadium as the west stand will be occupied by a number of parties including a hotel and other ancillary uses such as offices, all of which will provide an income to the benefit of the stadium operating company which can then flow, as directed by that Board, to the benefit of the Football Club as appropriate. Additionally under the current approval there is also the right to hold concerts on limited occasions throughout the year. If I were able to include – subject to the Council’s approval – an arena as part of the stadium structure (encompassing the west stand seating and facilities) this would have enormous synergy providing still further income for the operating company and Football Club. I am currently undertaking a feasibility study in this connection. If this proves viable and consent is forthcoming then this phase of construction would be integrated within the programme.
Q7. What other uses are envisaged.
A7. See 6 above
Q8. Does RM envisage SUFC being capable of meeting payment of rent based upon the projected operating costs of SUFC at the new stadium.
A8. The answer is yes, but as I say in 3 above whether the rent is paid or written off will be a matter for the stadium operating company and will be determined entirely by the success of the Club. Which, of course, is pivotal to this entire exercise.
Go next to Page 4 of this thread
for Replies to Questions 9 - 15 inc
for Replies to Questions 9 - 15 inc
Last edited:
