{meta} Decision - 11.00: City of Salford Community Stadium Ltd

Decision details

Decision Maker: Cabinet

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: Yes

Decision:

Salford City Council - Record of Decision (CABINET)

 

I, Paul Dennett, City Mayor, in consultation with the Cabinet and in exercise of the powers contained within the City Council constitution do hereby:

  1. Approve the council’s provision of financial resources in the form of a repayable interest-bearing loan of up to £0.660m to City of Salford Community Stadium Ltd (CoSCoS). This is to be on a 50:50 basis with Peel Holdings for the financial period to 31 March 2020, the sum being the council’s 50% share.
  2. Delegate to the Strategic Director for Place the completion of all the necessary legal and ancillary documentation identified as necessary to give effect to 1 above.

The reasons are

The stadium, managed by CoSCoS Ltd, continues to be the catalyst for regeneration and development of the surrounding land.  The stadium provides employment for 235 people across catering and operations.  The sale of several large sites continues to develop the city councils long terms plans to regenerate the area which bring jobs and economic benefits to the city.

Whilst CoSCoS is Ltd is trading well there will continue to be a requirement for further working capital funding until such time as all of the development land is sold, allowing the repayment of existing development and working capital loans. The advance of £0.660m for 2019/20 is necessary to continue to secure the council’s investment. 

In addition to ongoing principal repayments, CoSCoS has repaid £1.183m generated from the sale of land. It is anticipated that the overall level of debt owed by CoSCoS to the council will reduce by £0.535m by the end of 2019/20.

The investment will generate interest payments in excess of the costs of borrowing incurred by the council. This interest is set aside in a reserve which mitigates the risk of sale values falling short of the amount required to repay the debt.  The resulting balance of risk is reducing on an annual basis.

Options considered and rejected were

Not providing the loan facility.

Assessment of risk

Without funding provided by the shareholders, CoSCoS would be unable to continue trading, the consequences of which would include a default on the existing development and working capital loans.

The source of funding is

Borrowing.

Legal advice obtained

Legal advice originally secured in 2017/18 confirmed:

  • The appropriateness of the facility agreement as a mechanism for funding
  • The requirement for State Aid compliance

This position is unchanged.

Financial advice obtained

Chris Hesketh, Head of Financial Management, tel. no. 0161 793 2668

Procurement advice obtained

Not applicable

The following documents have been used to assist the decision process

Report to Cabinet 28 January 2020, City of Salford Community Stadium Ltd


Contact Officer:                              Tel No

Chris Hesketh, Head of Financial Management, tel. no. 0161 793 2668

 

*           This document records a key decision, but the matter was not             included in the Council's Forward Plan and it has been dealt with             under the emergency procedure.

*           This decision is urgent and is not subject to call-in, in accordance with     the Decision Making Procedure Rules

*           The appropriate scrutiny committee to call-in the decision is the             Overview and Scrutiny Board.

 

 

Signed:  Paul Dennett                                                        Dated: 10 February 2020.                                                      

City Mayor

 

FOR DEMOCRATIC SERVICES USE ONLY

 

*           This decision was published on 10 February 2020                                             .

*           This decision will come in force at 4.00 p.m. on 17 February 2020                                        unless it is called-in in accordance with the Decision Making Process Rules.

 

Publication date: 10/02/2020

Date of decision: 28/01/2020

Decided at meeting: 28/01/2020 - Cabinet

Effective from: 18/02/2020

Accompanying Documents: