LETTER: Big responsibility for Leamington FC shareholders as Gallows Hill meeting edges closer - The Leamington Observer

LETTER: Big responsibility for Leamington FC shareholders as Gallows Hill meeting edges closer

Leamington Editorial 22nd May, 2017   0

FOOTBALL: Former Leamington FC chairman David Hucker has sent the following letter to The Observer regarding the club’s potential move to Gallows Hill. 

SHAREHOLDERS of Leamington Football Club carry a big responsibility for the future of the club when they meet at the end of this month to decide on entering into a formal agreement with Warwick District Council over a move to Gallows Hill.

This is the second such meeting, the first being held in December 2014, and if approving the signing of the agreement, shareholders will, in effect, hand future decisions to the board which will be empowered to sell the current ground and enter into contracts for a new one.

Whilst the agreement is described as not binding, momentum will build for a move and it will be difficult to revisit the key elements of the deal. Given the board’s enthusiasm for abandoning the current ground, I just can’t see them walking away. So, if the vote is in favour, the die will be cast.

The resolution is black and white, allowing no flexibility for shareholders who want to support the proposal, but have reservations over the terms negotiated with Warwick District Council.

There is still lack of clarity around the board’s vision for the club and how this new stadium helps deliver its business and community objectives. The report refers to a business plan dated April 4 2017, but shareholders haven’t been shown this so are, effectively, voting blind.

The current ground would be sold to the council for £450,000 much less than the figure of £600,000 given by the board as the valuation for sports use at the last meeting. Future building costs and timescales are uncertain, so it doesn’t make sense to fix the sale price now, as land values will only increase.

At the outset, the board clearly stated that one of its requirements for a move was a site of eight acres, comprising six for community use and two for car parking. The site area of the proposed stadium, including car parking, is 2.8 hectares, or 6.9 acres, so what has been compromised?

Any initial sub-leasing premiums generated from lettings within the stadium (there are two gymnasia shown on the plans) go towards the development costs and are not retained by the club as a hedge against future running costs. So, the club takes nothing apart from some fixtures and fittings to the new stadium and there are no means to generate working capital ahead of the move.

The peppercorn rent applies as long as the club retains its “not for profit” status but, legally, it is a company limited by shares that can declare a dividend to shareholders. Does this imply a change in legal status, or can the condition be satisfied by renewing the resolution not to pay a dividend every five years?

The council will have a say in who uses the stadium through a formal agreement, but it is the club which will be responsible for the day-to-day running, bearing any financial losses.

Understandably, the proposal has generated much enthusiasm, but shareholders must vote with their heads, not with their hearts. The council needs the club more than the other way round, as it has nowhere else to go to meet its requirement for traveller sites, Shareholders should vote against the resolution and ask the board to go back to the negotiating table and get a better deal.

David Hucker.

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