Agenda and decisions

Salford City Council - Record of Decision

I Paul Dennett, City Mayor, 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 £0.120m to City of Salford Community Stadium Ltd (CoSCoS). This is to be on a 50:50 basis with Peel Holdings, the sum being the council’s 50% share. It should be noted that interest payments receivable from COSCOS on an annual basis exceed this level of loan.

2.            Delegate to the Monitoring Officer the completion of all the necessary legal and ancillary documentation identified as necessary to give effect to 1 above.

The Reasons are that:

CoSCoS Ltd is a development vehicle for development land surrounding the A.J Bell Stadium. The land is now actively being developed and there are interested parties on 2 sites with further development opportunities being explored.

Developments in the pipeline, including retail and leisure options, will bring further jobs and economic benefits to the city. CoSCoS Ltd has been involved in legal proceedings to ensure that it is able to agree plans to sell parcels of land free of legal encumbrances for best value.

Whilst CoSCos is broadly at a break even position on a trading basis, there will continue to be a requirement for further working capital funding until such time as the development land is sold, allowing the repayment of existing development and working capital loans.

Approval was given to a loan of £0.670m for 2018/19. The Company has experienced additional unbudgeted costs linked to legal proceedings which if left uncontested would have impacted on the future development of the Company’s land.  The costs associated with the compulsory purchase are non-recurring and as such form the basis for the additional loan facility.

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 will include a default on the existing development and working capital loans.

The source of funding is borrowing.

Legal Advice obtained.

Legal advice secured in 2017/18 confirmed:

·         The appropriateness of the facility agreement as a mechanism for funding

·         The requirement for State Aid compliance

·         The power of the City Mayor to personally exercise this executive function and to make the decision

·         The necessity for the action taken to protect the investment of the Council and the Company.

This position is unchanged.

Financial Advice obtained.

Chris Hesketh, Head of Financial Management x2668

Procurement Advice obtained.

Not applicable

Contact Officer:        Chris Hesketh                      Tel No x2668

FOR DEMOCRATIC SERVICES USE ONLY

*           This decision was published on 22 May 2019.                                             .

*           This decision will come in force at 4.00 p.m. on 30 May 2019                                    unless it is called-in in accordance with the  ...  view the full decision text for item 3.