Appendix 1 Regeneration Committee 19 June 2014 Item 8: Stadium-led Regeneration Gareth Bacon AM (Chairman): Stadium-led regeneration obviously is very pertinent at the moment, West Ham United, the deal had just been announced and they will be going into the Olympic Park. Other clubs are looking to move or develop new grounds very soon, Tottenham Hotspur, Queens Park Rangers among them, as well as Brentford. Other clubs have done so in recent memory, Arsenal, Manchester City and of course the Wembley Stadium redevelopment, so it is quite a pertinent thing for us to be looking into. Can I welcome our guests that have come today to discuss this with us, we are very pleased to have all of you. Pete in particular coming all the way down from Manchester, it is very much appreciated. I think everybody who is here is going to add quite a lot to the discussion, so thank you very much all of you for attending. What I would like to do is kick things off, if we can move down the table starting from this end with Gabriel, to introduce yourselves, the organisation that you represent and then we will start the discussion after that. Gabriel Ahlfeldt (Associate Professor of Urban Economics and Land Development, London School of Economics): I am Gabriel Ahlfeldt, Associate Professor of Urban Economics and Land Development at the London School of Economics. Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): Thank you, Chairman, I am Pete Bradshaw, I am Head of Infrastructure and Corporate Social Responsibility at Manchester City Football Club. Michelle Moore (Moore Development Consultancy): I am Michelle Moore, I am a sports and development consultant, specialising in sport as well as diversity and education. Ken Friar OBE (Director, Arsenal Football Club): I am Ken Friar, an Executive Director of Arsenal Football Club. Sarah Ebanja (Chair, Newlon Group, and independent consultant): I am Sarah Ebanja. From 2001 to 2006 I was Deputy Chief Executive of the London Borough of Islington and I led from the public sector side on the Arsenal Stadium regeneration. I am currently Chair of Newlon Housing Group, which developed 1,500 affordable homes in the Arsenal Regeneration Area. Gareth Bacon AM (Chairman): Thank you. We are awaiting the arrival of Antony Spencer, who is from Stadium Capital Holdings. Hopefully he will be coming along shortly to join us.
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The first question I would like to put to all witnesses is how you believe the Stadium Development Scheme is going to act as a catalyst for regeneration. Some of the Members here have direct experience of this, others have an academic interest in it, I think. Gabriel Ahlfeldt (Associate Professor of Urban Economics and Land Development, London School of Economics): Yes, I can just give you an academic overview of the research that has been done in that direction. You are speaking about neighbourhood regeneration, I think it is an important distinction, because if you look into broader impacts on the economy of a city as a whole then what you usually see in the literature is kind of disappointing. There are typically these ex ante-assessments which mechanically produce relatively strong job and economic impacts. That is because they are assuming there are some multiplier effects, you invest £1 you get £1.80 out of that. We fail empirically to detect these effects at the level of a city or a region. This does not have to mean that there are no effects, but simply that the statistical tools that we have available are not precise enough to get to these relatively small impacts. Once you move to the neighbourhood you see a slightly different pattern. That research is mainly constrained by the data availability. With the data that we have we see an impact usually in the range of two to three, four, maximum five kilometres. Why do you expect that impact to say it is usually positive? I guess there are a couple of reasons. First of all it is a major investment, usually the largest investment in a neighbourhood, so that signals some kind of commitment, people trust that there will be some commitment to the area, there will be improvements in the public realm usually, sometimes transport. Ideally some kind of architectural structure that illuminates the neighbourhood. This is one of the few instances where you can put some structure into a neighbourhood and where you can attract very large numbers of people coming into the neighbourhood. These guys are likely to spend money in the neighbourhood, they go to bars and restaurants. Even if you, as a resident, do not value the stadium in its function as hosting a sports team there regularly, you may value the amenities that that stadium brings directly to the neighbourhood. That is the very good reason. Gareth Bacon AM (Chairman): Mr Bradshaw, your experience at Manchester City. Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): The experience of Manchester City is two-fold really, one is that we are an edge of the city centre stadium really. We are not amongst a retail commercial estate. The danger, I suppose, when we looked at what we were doing and what we wanted to achieve over a ten-year period was that we could simply be a stadium that comes and goes for 24 days a year, people get in their cars, disappear and it has very little positive impact on the community, does everything negative in terms of disruption, litter, noise and so on. That is easy, you can build a fence around yourself and pretend that world out there does not exist and you do not really care about the neighbours, but historically the club did not behave like that and did not want to behave like that.
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It was really important that we thought about what we did. That 24 days a year really was not a sustainable piece of work for us and we had to look at how we best used our resources, our name, the whole image of football, to do something which is very different. What we then looked at was particularly our work in outreach into the community, which when we moved to the stadium was engaging with about 300,000 individuals a year and is now at half a million young people. Rather than just doing football on the streets and the usual stuff, we investigated and tried to understand what the social issues were, what the trends were, what the problems and considerations were amongst local people of all ages and tried to make sure that we listened and did things that were relevant and important to local people, so the outreach work was particularly important. To run along with that to make the stadium itself successful, as a piece of concrete basically, we decided that everything we did should be about sustainable procurement, and about local procurement. If we were spending X amount of money a year in services, in new opportunities and so on, and in building work, a minimum of 85% of that would be spent within the M60 corridor, and most of that within east Manchester if possible. We also set ourselves high targets of local employment, which was 70% as a minimum and we are achieving year-on-year about 72-74%. That includes apprenticeships, training schemes, new trainer schemes, working with schools and colleges to make sure that we are looking at the future of what our skills needs are going to be so that actually we are working with the future generations to get the very best young people, both in our club and with our partners. They can be the best groundsmen, the best aboriculturalists, the best hotel keepers, housekeepers, receptionists and managers as well as hopefully the best footballers. In the last 12 to 18 months we have spent the best part of £200 million in new infrastructure. The importance of that is that 85% of that has been spent in east Manchester. We have created 68 apprenticeships with long-term jobs attached to them. Out of those apprenticeships we recognise that one of the big challenges is a literacy problem in Manchester with around 17% of 19-year-olds having a reading age of less than a seven-year-old. Therefore, it is difficult for some people to access apprenticeships. What we have done is we have worked to make sure that those people could read and write and that they could get on the apprenticeships. Then we work with them and their families in their neighbourhoods and the social housing landlords to make sure that there are real opportunities, they have a bank account and there are places for people to stay and train and live and so on. I think the infrastructure work we do is not just about steel and concrete and mortar and so on. It is actually about the people that we work with, the people we interact with and how football, the stadium, sport, and all the concerts and things we do as well, has to make a very real difference in a place that traditionally was not a commercial heartland. Gareth Bacon AM (Chairman): To pick up on just one point, which is going back to the steel and concrete example, you talked about £200 million of infrastructure spending in east Manchester, what was that spent on? Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): It is a current piece of work. We are building a new training ground and academy adjacent to the
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stadium. Forty years ago I started work in sport and leisure as an apprentice with Manchester Council and we dreamt and talked about in 1974, the whole street to stadium idea and I’ve been talking about it for the last 40 years, and lots of other people have as well. Rather than go on to a greenfield site out of Manchester we worked with the club owners and the chairman to look at how we could regenerate east Manchester and take a brownfield site, which basically was Ciba-Geigy chemical works in east Manchester that had closed down some years ago. We bought that and we turned 80 acres into our new training ground, which is literally across the road from the stadium. On one end of the site we have built the new sixth-form college, a new swimming pool and leisure centre, rugby pitches and football pitches for the community and that attaches to our academy. Our academy attaches to our first team training ground and our first team training ground attaches to the stadium, so it really is this line of sight of street to stadium. That is what we are spending the money on right now, on top of the stadium expansion project and we still have a long-term aim of another 250 acres to develop in terms of commercial leisure opportunity. That is what is making a big impact on the community. It includes a wildlife corridor and all the things that people in east Manchester wanted to see move from chimneys and factories and smoke and grime, to something very positive that brings in new investment. Gareth Bacon AM (Chairman): Thank you. Michelle Moore (Moore Development Consultancy): I think it is just important to remember, just as Pete was saying about the physical environment, that actually the social regeneration aspects around all of this is just as critical because it provides a kind of springboard. When we look at football, for example, and the journey that it has been on, in the 1980s it had a really, really bad reputation with hooliganism, the bond between supporters and fans and the clubs was very shaken, and that was down to that whole kind of social deprivation that existed at that time. What the Premier League did and others did was introduce lots of social inclusion, youth programmes and Kickz programmes, looking at crime prevention and Playing for Success, education programmes attached to football clubs. This was really pivotal because the football clubs were turning to the community for some kind of resolution in a way, and you had the charitable arms of lots of different football clubs and charitable foundations started to spring up. I think that is really important to consider when we are talking about the stadium in terms of catalysts for regeneration, because regeneration has to happen when there is a bond between the community and that stadium and that football club. Often what you will see is when the research is done with fans and supporters it is around the social relations of the football club. It is not to do with the commercial or the economic valuation of that club. That is important because that provides a springboard for real transformation to happen and that really supports the economic regeneration that comes along as a part of that. If we are to believe the rhetoric that football clubs are at the heart of their community then the community has to feel that as well. They have to really be a part of that bond and understand what that means, because they take civic pride in their football club and what that brand is about, so that is really important to consider. Alongside that obviously what regeneration brings in terms of the health education and community safety and all of the aspects that go
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with it if a football club is working in a true partnership with their local authority and other partners. Gareth Bacon AM (Chairman): Ken, tell us about Arsenal. Ken Friar OBE (Director, Arsenal Football Club): We decided to move stadium in the beginning of 2000. Our previous stadium had a capacity of 65,000 and that got reduced to 38,000 when we the all-seater stadia regulations came in. We had no alternative other than to consider moving somewhere or dying on our feet, because we just could not compete with our peers within the game. Fortunately for us, Antony Spencer found a site and that site was within literally 400-500 yards from where we were before. We started in 2000 with Islington Council. At that time Sarah here was the lead for the Council and we embarked on a programme of building a new stadium. That involved buying up more than 60 acres of land within the borough. It was clearly a big challenge for a small football club. Since that time we have been able to achieve what we set out to do. Michelle’s points I think are very valid with the community programme. We have a very large community programme, we spend more than £1 million a year on that programme. That started in 1985, so it is not something we have just started. It is now in its 29th year and is very successful. All in all we employ now on a match day approaching 3,000 people, so we are not a big company, but a relatively good-sized employer. We do have big community programmes running. We have a new sports hall being built, which will be ready at the end of this year. All in all I think that our commitment to the community would be two-fold really. One, we have stayed there. We moved to Islington in 1913 and we did not want to move from Islington, however we did seriously consider it, because the challenges that we faced in getting planning consent to build a new stadium were quite immense and we were almost on the verge of relocating outside the borough. Fortunately we are where we are; it is successful. We have a 60,000 average capacity. We have decided that we would try to live within our means, we do not have benefactors, we do not have anybody outside putting money in other than ordinary commercial activities and all in all it works very well. Gareth Bacon AM (Chairman): It is a very nice stadium as well, nice big seats. Sarah Ebanja (Chair, Newlon Group, and independent consultant): As I mentioned earlier, my role is with Islington Council. I went as a Deputy Chief Executive and there was nothing on the job description at the time that mentioned Arsenal or a new football stadium in the borough. I took on the role because at that time, and as Ken has mentioned, Arsenal was seeking to put in a planning application to get a new stadium. What was very important for the Council was that if it was going to give serious consideration to Arsenal for a planning application that we as a Council needed to be very, very clear what the public benefits were, what the overall net positive public benefits were that would come from approving a larger stadium within very close proximity of the previous stadium. That consideration was within the
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context, as Ken has already mentioned, that Arsenal were already part of the Islington community and were a brand that was known to them, something very important within Islington. From the Council’s perspective one of the first things that we did was to see if there had been any studies done or any research done to show the regenerative benefits of stadia. Particularly we wanted UK-based evidence, there was not any UK-based evidence other than some research done at John Moores University in Liverpool. Most of the evidence came from the United States and the evidence that was in the UK was predominantly related to the new Millennium Stadium in Cardiff. The impetus for that really was to promote Wales and act as an attractor for Wales as a capital city and it was obviously a national stadium, not a club-based stadium. What came up from that evidence was that to secure the social and economic regenerative benefits in particular, as opposed to the physical regenerative benefits, it needed to be worked at and it needed to be worked at by all the key stakeholders. They would not just naturally flow, you needed to work on it if you really wanted to ensure that it benefited existing residents and communities and that it was good to attract new residents and communities into the area. From the Council’s perspective, the Council were very mindful that what Arsenal desired was to have a brand new world-class stadium for their ambitions. In that context as well as a club- based stadium they wanted it to be located in an area that when people came they had a pleasant experience anyway. From our perspective what we needed to do was minimise the disbenefits of a further 22,000 people coming to the stadium, albeit up until I think it was probably the late 1980s, early 1990s, the stadium had been much bigger taking 70,000 people and there had not necessarily been the same transport infrastructure because the Victoria line had not been done. From a Council’s perspective, we wanted to bring back into use brownfield land that had been empty for 20 or 30 years. In essence it was an area of opportunity that we had sought investors and developers for that we could not achieve. At that time our focus was on new homes in the borough. The scheme has generated over 3,000 new homes and nearly 1,500 of those are affordable homes in the borough. The other aspect was to create new commercial/business space. It is only 14 years ago we are talking about, in those days we did not specifically cite that we wanted X thousands of jobs, but what we did cite was that we needed to replace the business space that was being lost through the new stadium’s relocation, so we sought to have 35,000 square metres of business space, and depending on the nature of businesses that you have in that space that could range from 3,000 jobs down to 1,000 jobs. It depends how you use that particular space. That was very important for us. The other key thing that was very important was in terms of accessibility to the area and on match days it not being totally clogged up with 60,000 people coming into the area and causing disruption to everything else that went on, so again looking at how do we mitigate those aspects. From the overall perspective from the Council in terms of public benefits that were secured, relative to the amount of investment overall for the scheme it was the biggest section 106 agreement that had been negotiated. The other aspect I think that is really important in terms
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of the club-based stadium is that a club is building for it to be its home. It is not building to then sell the developments or the properties off for other people to come and occupy. What that means is that they actually have a stake in the neighbourhood as well. That is very important and I think that has more of an impact on maybe a national stadium, where you have different people using it all the time. In terms of has the Council achieved the socio-economic outcomes that they anticipated at the time, everything was delivered that was anticipated at the time and what we intentionally did not do as the local authority was state that a certain percentage of jobs had to go to local people, a certain amount of business had to go to local people. What we did do with Arsenal and with the local Chamber of Commerce and colleges, we worked very closely with the local community so that they could build up their potential to win opportunities that came from the new stadium. I think before the stadium actually opened there was a lot of procurement involving local businesses so that they could apply for opportunities within that, and from the employment side working with colleges and schools so that people could be trained for the opportunities that would arise within the scheme. Gareth Bacon AM (Chairman): Antony, welcome. I apologise we had to start slightly before your arrival. The question that was put to the other guests was how sports stadia can be used as a catalyst for regeneration in particular areas. Would you like to offer your take on that? Antony Spencer (Managing Director, Stadium Capital Holdings): I would actually like to say I am an Arsenal football supporter and I am also a property developer specialising in regeneration. I think it is important to go back slightly to the past so that you understand how this came about. I was actually working with a gentleman who is no longer with us called John Sienkiewicz and he was at the Government Office for London. In fact I was working on a scheme in Greenwich, which was the Greenwich Hotel, next door to the station with which you were involved. When I was with John he was talking to me about Wembley Stadium and about what could be done around Wembley Stadium. We started talking about this and I came up with the idea, in my opinion at the time, that potentially it was sexy to live around a football stadium, and that you could actually build a community around it. I came up with an idea which I shared with John. At the time I went to the Football Association (FA) and there was no traction at all, they were not interested. They were focussed just directly on stadia. We took that idea and then John said to me, “Well what football club do you support?” and I said, “Arsenal”. At that point he let on to me that Arsenal potentially were looking at building a football stadium in Finsbury Park. He was not interested at all. As a committed Arsenal supporter I also did not want Arsenal to go outside Islington and so the hunt was on to potentially find them a site. From that point of view I then found the site, but I found the site by looking for a brownfield site and located it very, very close to the football club. I shared this with John, this is before we actually went to Arsenal. John Sienkiewicz said to me, “There is no way I am going to let you take 750,000 square feet, the largest industrial development space in Islington and turn it into a
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football stadium that is only going to be used for 28 days a year, you are going to have to do better than that”. We looked at another site that was nearby, which was Lough Road. I have the original document, because essentially this was what was there before. This was deprivation, there were three waste transfer stations, there was also another site that had not been developed for many, many years, which was called Lough Road. The deal that essentially was cut was nothing to do with the football stadium, it was actually the jobs, because as he made clear to me they would not support putting a football stadium there, it was the regeneration. This document here says, “It’s more than a world-class stadium; how Arsenal’s new stadium will be the catalyst for regeneration in Islington”. At the end of the day the original scheme that we came up with was actually delivered. It is over two miles in length. In fact, the club when I went to them initially were interested in delivering a football stadium very, very similar to the position that the FA were in, but in the end they embraced the vision, they understood that the only way that we were going to get that football club, get the planning permission and get the partnership with everybody was to embrace the regeneration. Gareth Bacon AM (Chairman): Thank you. Murad Qureshi AM: I think we are hearing a lot of the model around Arsenal and we will come back to it. Can I just come back to Manchester and what has been happening at the City of Manchester Stadium? You have elaborated to some extent, can you just extend what you said earlier about the futures of development work we can expect? Some of us have actually been up to the City of Manchester Stadium with a previous Committee and it would be useful to have an update on what has happened since then. Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): Sure. What year was it? Murad Qureshi AM: It would be the time of Dee Doocey OBE (former Assembly Member), my memory is failing. Gareth Bacon AM (Chairman): Four years ago. Before 2012. It was a few years back. Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): As I said earlier, we have bought 80 acres, a brownfield site, a chemical works, and that is due for completion this October, so we will move from three sites on to one site in October. Also the community facilities are local at that point in time as well, as I alluded to earlier. What we have basically is an industrial area of the city really, that certainly in my lifetime, about 20 or 30 years ago, was known as the workshop in Manchester. It was coalmines, power stations, chemical works and steel industry, and so on. At the end of the 1970s and early 1980s it literally died a death. So from a point where 1,000 people were employed in heavy industry in east Manchester, within a space of just a few years it was gone. With that came housing deterioration and a lack of investment; and the east side of the city suffered compared to other parts of the city and it needed a big regenerative boost. I was part of the Olympic and Commonwealth Games bids, which is how I ended up at City. The Commonwealth Games was obviously run by the city and the focus on how it would regenerate east Manchester. The
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stadium, along with a couple of other facilities, all had to have an afterlife because there was nothing built that did not have a future plan for it. That is where it all started and it has taken ten years to get to where we are today, it has not been a slow process. The next phase will probably be a five-year process. We have the stadium, we have just started the expansion of the stadium to move from 48,000 seats to 60,000 seats. As I said, we are doing the training ground and the community work and the academy and so on. What is left on the site then is another 250 acres of available land. About 140 acres of that has already been remediated and is ready for building on. The other bit is a little bit more challenging but we will get that addressed in time. The plan for that is that we have to try to do something that actually changes the whole face of the area, because along with what we have done there, has been a massive housing regeneration programme. There are people moving into east Manchester and wanting to move there for the first time in generations. We worked to build a high school in east Manchester, that is not only full but is actually incredibly successful. It is the first time the neighbourhood has ever had a sixth-form college. The next phase has to be how do we do something that actually attracts people 356 days a year into east Manchester to create the footfall, to create the viability of spend and continuous spend, and make it a day-in, day-out destination venue in its own right. It is a mile from the city centre, so we cannot compete with the city centre, we have to do something different. The work that is going on at the moment is to look at what that next phase is, probably from the end of this year onwards really, to look at how east Manchester becomes this visitor destination of excellence. Ideally something that does not exist in the UK, but certainly something that would not exist in the region. It is high-level visitor destination work that we are looking at, at the moment; from hotels to attractions to entertainment and so on and so on. The area that we are talking about building on is the failed regional casino bid that Gordon Brown (former Prime Minister of the UK) crushed a few years ago. That in a way, arguably, could have been a blessing, because we can look at that from a very different perspective now and actually think about the opportunity and generation of very real jobs that has longevity behind it. That is what we are looking at. I think what is important is that the football club has grown and changed significantly in that ten years and I think that is a fairly obvious thing to say. We now have two other football clubs, one in New York and one in Melbourne. The relationship we are creating with both Melbourne and New York is really important to us. We are also working in Manchester with the two universities in the city. We are also working with La Trobe University in Melbourne and State University in New York, to make sure that actually what we learn and work at and develop, is more than just about playing the game X number of days here. It is about how we regenerate cities, how we do something very different, how we share that learning and development and we do that with Abu Dhabi and other places too. Murad Qureshi AM: Pete, thanks for the update. It was interesting, one of the meetings we had on that trip was with the Chief Executive of Manchester City Council. The question I was going to ask, and Len can confirm this, was that he saw this as an important way of getting
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major investment from the Middle East as well. I was clearly left with that impression before I got the train back from Manchester. Has much of that investment materialised and has that been the catalyst for that investment into Manchester City Council? Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): Yes, £200 million right now has all come from the owners in Abu Dhabi because there is no public money involved in it. It is all Abu Dhabi money that is making that happen. It is all well thought out, it all has to be viable, it all has to be where there is no money being thrown in without thinking about what happens to it and how we sustain this. That is really important to us as well. It is not just simply free money in a blank cheque, it all has to be well thought out; but all of that is coming from Abu Dhabi. The new sixth-form college and the new swimming pool and leisure centre, the new retail district centre is being paid for from that money as well. All that has been enabling, including the infrastructure of roads and open space to make the area more attractive. That has been brought in from the Middle East. Murad Qureshi AM: That has confirmed what I picked up at that time. There is, dare I say, an alternative model as well in Manchester. If you go to Old Trafford that has essentially been -- Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): It is actually Old Trafford not Manchester. Murad Qureshi AM: The interesting thing there is that the assistance, or lack of assistance, beyond the normal responsibilities the local authority has with what happens around Old Trafford, and that is it is an old industrial estate, it is on the canals, it got bombed in World War II. That has happened incrementally and seems to have got to regular tenants of 75,000 people week in, week out. It is a more viable, dare I say, model for clubs than Manchester City. Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): There is no investment in local infrastructure there, no investment in their local community, no support to local schools and colleges and leisure provision and so on, so relatively little outreach. £500,000 outreach from Manchester City and less than £100,000 outreach from Manchester United. They are very good at what they do. I am not here to talk about them actually, but they are incredibly good at what they do. What they do over there they do. What we do over here is just different and ours is based on a club that grew out of a community. We were a crime diversion project in 1880 to keep young men out of trouble at the time. We have stayed true to that. Manchester United is a different model, successful I’ll give you, very successful, but it is different. Gareth Bacon AM (Chairman): The extra infrastructure spending that you talked about and the various things that are being funded by Abu Dhabi, when the stadium was built for the Commonwealth Games there was always the intention that Manchester City would occupy afterwards. That was going to be the legacy occupier. The reason I am asking these questions is it is a direct parallel with the Olympic Stadium in Stratford. Was there an expectation where Manchester City took up occupation of that stadium, or in the negotiation process prior to the Commonwealth Games, that some of this work would be done? Because of course the Abu
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Dhabi takeover of Manchester City took place after the Commonwealth Games. So this is something that the club and the club’s owners have decided to do subsequent to taking ownership. They weren’t expected to do it, is that right? Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): Correct. Basically, there was a renegotiation of all of the lease agreements and the financing agreements to make all of this happen, because it would have been unviable not to have done that. The original 20 year agreement for income sharing, all those sorts of things, actually made it very difficult to invest, because everything you invest in would have had to have been shared. That was renegotiated four years ago and gave the Council a greater income, but gave the club the ability to actually invest in property development basically. Gareth Bacon AM (Chairman): The club are doing it because they want to, essentially, rather than because they have to? Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): Absolutely. James Cleverly AM: With the impact of the Olympic Stadium on London, one of the arguments was that it was the massive injection into the area that made the difference; rather than all the sporting infrastructure and that kind of stuff. Is there an argument to say that actually, if you took the stadium redevelopment out of the equation and just put the money that was being invested into the local area, you would actually get a better outcome? I am playing devil’s advocate to an extent, but one of the points that Antony made in his idea was that there was a potential uplift, a reflected glory in being located near a football stadium. If you fundamentally disagree with that, then is there an argument to say that actually that money, less the stadium, could provide a better outcome? Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): In my view, no because there is nothing sexy there. You have to do something that actually creates local pride and interest. We can go on building housing estates, industrial estates and sheds for B&Q and so on until the cows come home, but they are not very sexy, they are not interesting; it is the same as the place next door. Using an events venue or a big attraction of some type, and it does not have to be a stadium, actually creates an incredible amount of interest in an area; it gives it some uniqueness, a sense of place that people can build on to. I think that is what makes the difference. To just build more of the same and keep doing that is zombie-like, isn’t it? You just do not give anybody anything different and you take away local pride and local opportunity. I think what stadia are doing, and other venues, you have probably got the same going on in Greenwich to an extent, is that it gives people that something about sense of place and pride and, “That’s where I live, I want to make it the best place, I want to be part of that”, rather than just another series of sheds and blocks of houses. Michelle Moore (Moore Development Consultancy): Realistically, whether or not that money would have gone to that community, it might not have ever gone to that. For example, we are talking about the Olympic Games and the legacy piece here, and actually what is left in terms of the impact on children and young people, for example, is huge. There has been
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research done by a the London Organising Committee for the Games (LOCOG) in all the six host boroughs. The biggest thing that came out was their sense of community, their sense of belonging, their identity, their pride in their community, and they are proud to be Londoners. That is really powerful, because for those young people they are able to latch onto that. For young people in the host boroughs it was particularly huge for them, and transformational in lots of ways, in terms of unlocking their potential as well. Being involved in opening ceremonies, closing ceremonies, all of those things. One-off lifetime opportunities that make the real difference to the lives of young people. For me, I think the legacy that lasts is how you inspire many different groups within that community. There are loads of different stakeholders, from the residents to the local businesses, to the people that spectated more. We did create a nation of more sports spectators. I think that is really powerful and I think that you cannot get that by just regenerating an area with the physical environment and everything that goes with the infrastructure. That has to come with that sense of pride and belonging to something; and that is really powerful when you have the biggest sporting extravaganza in the world on your doorstep, so we cannot not overlook that. The difficulty obviously is when we are evaluating the impact of that, because it is a marathon, it is not a sprint. Legacy is one of those things that you all have to look at over a longer term period. I think that side of it, which is often seen as a softer, woollier side, is actually just as powerful. James Cleverly AM: From an academic point of view is there anything that you could add to that? Gabriel Ahlfeldt (Associate Professor of Urban Economics and Land Development, London School of Economics): This is an incredibly difficult question. I seriously do not have an answer, I do not know. The problem is that even if you really want to get to a proper causal effect that a stadium, and all the adjacent developments and impact, have on a neighbourhood, just estimating that causal impact is ecometricly quite a challenge. You have to think about the counter factuals of what would have happened to this neighbourhood without that stage. You have to think about what would have been the trend and where do you get that from. House prices for instance increase, the economy changes and there is some change in the neighbourhood. How can you separate all these things that are unrelated to the stadium from the effect of the stadium? Now you are adding another layer to that question. Obviously, the stadium has various functions. I mean an access, a kind of visual amenity, there is always the social enhancement policy surrounding it, but then it also comes with some disamenities. It is not just too pleasant to live in a street which is overly congested on the game day, even if you just have 28 game days a year. Most of the things that I have heard here, which form part of stadium impact more generally, seem to have an independent impact on the neighbourhood. If you think about visual enhancements, if you think about green space as public space, if you think about new policies that try to engage with the youth; I think there is some evidence that all these policies individually tend to impact on a neighbourhood. There is some research that tells you what the
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negative effects of congestion are. We are able in the case of Arsenal to separate at least the congestion effect from some other effects. Can I really tell you bottom line whether the extra benefits associated to this kind of thing that the whole is more than the sum of its parts, I do believe that there is some truth in it when it comes to a stadium. However, do I know whether these extra stadium benefits overcompensate for the negative effect of the stadium? I cannot tell you. I think it extremely challenging to answer this question carefully. You would need similar developments, some with and some without a stadium. Then you need a very good database, a very good empirical design, and if you all had that you might be able to answer the question. Otherwise, from an academic’s point of view it is rather speculative, so I do not want to give you an answer to that question. James Cleverly AM: You have kind of started the next question, which was about how we quantify and measure and predict those economic impacts. Sarah Ebanja (Chair, Newlon Group, and independent consultant): Picking up on the last point that you made as well, James. Part of the issue is what is the original attractor, or the motive for someone choosing to invest in a particular area, because investing in infrastructure is a huge amount of money, as you know. Also, there is the point that Michelle mentioned, would that money have gone into a structure that is there, were it not for the Olympic Games. With the Arsenal one in particular it was very much a private sector-led regeneration initiative. Arsenal wanted a new stadium. The Council wanted loads of things going on there and the Council did not have the investment to do it, so there needed to be people willing to invest in the area, particularly when Arsenal came along. The way that the planning permissions were all dealt with is that they had to provide a comprehensive regeneration scheme, which required them to make significant investment in infrastructure that would not have otherwise have happened. As I mentioned earlier, the Council had been waiting 20 or 30 years in that area, but it was very much driven from the private sector perspective. In terms of measuring the impact I think it is quite difficult in terms of the causal relationship. I think what we know is that anecdotally, and as you can see yourself, some people want to be around that space - obviously there are people who do not like football at all - but it is an attractor and it is viewed as sexy. People wanted to move there. We have seen it in terms of wearing my Newlon Housing Association hat, we have shared ownership homes in that area. It is a high price area anyway, Islington, relative to some of the other areas where stadium have been developed. To make the homes affordable we, as a Housing Association, have had to change our approach to ensure that people in the area could buy in. We let them buy a smaller share first of all, if it is shared ownership, and charge a much lower rate of interest on the equity that the Housing Association owns. In terms of when we advertise the homes there, which are currently being sold, I think we had something like 20 times the amount of interest for the properties that were there; which was greater than in other areas that we have had. In terms of over all the homes, I went back and had a look at a report that I wrote in 2006 for the Council that set out all the section 106 benefits that were expected from the planning application, whether they had been achieved, whether they were in progress to be achieved, or whether there had been variations coming through; and because it was in terms of implementation, the planning permission was awarded, I think, in 2002. I think it is still going
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through some aspect of permissions relating to it, to ascertain what has been delivered and what has not been delivered. Virtually all the section 106 aspects have been delivered. There were changes through the process relating to some aspects of that. In terms of how the Council at the time sought to develop the area, it was very much about what would it feel like. In 2000 we were thinking about what did we want this place to feel like in 2007 when it was completed, what would it be like on a match day, what would it be like on a non-match day, would people be walking around the area and if they were, what were they doing. At the time the expectation in 2000 was that there would be a tram system coming into central London and that there would be a spur of that tram system from Camden that was going up toward Finsbury Park. At the same time as the Arsenal regeneration scheme was in play King’s Cross was in play as well, so the whole idea at that time, the thinking was that people would come and spend a day in Islington. They could get to King’s Cross, get on a tram that would take them up towards Finsbury Park, or get off at Arsenal Tube Station. This is on a non- match day, because there would be other activities going on and there would be commercial space there. Wander down Holloway Road, which was being refurbished as well, towards the Angel Islington, because the idea was as well would be to a comprehensive approach in Islington that that evening economy and that daytime economy would spread all the way along from the Angel Islington through to Highbury Corner and up to the Nags Head. That was the vision and it was also based on particularly engaging young people, 13 and 14-year-olds at the time. One of our fears, because youth facilities were reducing, was you might get young kids hanging around with nothing to do, so how could you build in things for them to make them have a stake in the whole design of the stadium, and how the place gets used. If you go down there now compared to when the club was at Highbury, there is a lot more people movement around that area, there are a lot more homes in that area and those things have been achieved. From the accommodation side, a lot of the properties were bought by local people and people elsewhere, so in terms of the community a lot of the properties are rented in some areas of the scheme. With hindsight the preference would probably be to have more home owners living in those properties, but I think that is the nature of when you are developing flat dwellings. That is why it is quite important in them having a major social landlord there, because people that live in social homes are living there in essence for life, rather than moving around. There are a greater number of jobs than we had originally anticipated in terms of a high level of concentration. Antony Spencer (Managing Director, Stadium Capital Holdings): James, I think the question you asked is a really, really important question and it actually goes to the heart of really what today is about. I do not know what the other questions are but this one is really, really key. I would like to answer it in two ways. In fact, the very question you are asking I am having to demonstrate right now in connection with Queens Park Rangers (QPR) and Old Oak Common. To a certain extent one of the things is looking at regeneration, how does it work and what actually happens. When you go back in the past and you look at Notting Hill and you look at areas that have changed, you look at Shoreditch and you say, “Well what is it that created it? What is it that happened?” I think the answer to your first question is yes regeneration can happen in another way without a stadium. For example, I came up with an idea to move Chelsea Football Club to Nine Elms, but the American Embassy came and the view was that the
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American Embassy and the football stadium would not be compatible with each other and it was preferred to have the American Embassy there rather than the football club. When you actually look at it, and you asked a question about house prices, in the first instance people say, “Oh you don’t want to live next to a football stadium”. The interesting thing is the evidence is available that actually house prices are soaring around grounds. To a certain extent when you go back to the past and you say, “OK, you have arenas in Rome, you have arenas in Real Madrid that are right in the middle [of the city]”. Actually, coming back to Arsenal, when I was watching Fever Pitch and one of the parties wanted to live next to the football club, and I went there when I was 11 years old, and I had the same impression that you had that you would not want to live around the football club. Then it started to dawn on me that, “Wait a second, the people that were there actually decided to buy”. Chelsea became an area and the area of Chelsea became famous, because of Chelsea and the location and in terms of the house prices that were around it. I think the key is the regeneration would never have happened in Islington. There was not the driver, there was not the push to make it happen, to take all that industrial space, unless it was for a big driver; and it needed millions of pounds of private sector money to make it happen. Originally the same question that you asked in terms of housing, and there was a real reticence at the beginning because they were a football club, they were not a property developer. Ken Friar would say to me, “Who is going to buy the houses? Why do people want to live around a football stadium?” To a certain extent I had to prove to him by going to house builders and actually saying, “Look, this house builder wants to buy this site”; and we started with a site far away from the football stadium in Lough Road to prove the point. I understand what you are saying but what I would say to you is on the basis of what we have done with Arsenal; and the most interesting thing is that the actual flats that are being built right now, are closest to the football stadium and are selling out at premium prices. That is actually happening now. James Cleverly AM: That is interesting. Again, Gabriel, I will keep putting you on the spot as the academic touchstone on this, and I know that I am asking you questions where often there is not empirical evidence. How much of this knock-on benefit do you think is driven just by the rather intangible confidence in an area? If a private sector investor is willing to put a significant number of millions of pounds in a physical project in a physical area, does that do something to the local authority, to regional government, to the local area? Do you think that triggers a kind of, “Well, if they’re spending money there then that must be a sensible place to go”? Gabriel Ahlfeldt (Associate Professor of Urban Economics and Land Development, London School of Economics): I think that is probably fair to say that this is the case. If you think about regeneration you have three options in a place like London. If the house price trends go on like that and if the economy goes on like that you can essentially expect every place in London, that is reasonably central, to be regenerated in a couple of years’ time because we are running out of central housing. One option is just do nothing and wait for regeneration to happen naturally. The other thing is you just go there and say, “OK, let’s focus on some fundamentals that are good for the area and let’s try to isolate the problems the
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neighbourhoods are having and put some public money there and just fix that”. Then the question is where the money comes from. I sympathise with the point that was just made, these kinds of things are expensive, that is where we come from. If you have some anchoring on private investment that is certainly helpful. This is a different question. It is quite clear that if you solve issues in a neighbourhood, if you fix derelict or improve the structure of the composition of the neighbourhood, it is clear that you are going to see regeneration. It does not answer the question whether this is causally related to the fact that there is a stadium there. Of course there is a broad accusation that if you do not have the stadium, do not have the money, you cannot do it and then regeneration does not come. You have to be a bit careful I think about the interpretation of super-high house premium extremely close to the stadia. Partially this is due to sorting. You will have definitely a couple of people who really want to live close to a football stadium, especially close to Arsenal, because they are Arsenal football fans and they are affluent. You get an effect on house prices which does not really tell you something about the average perception of the neighbourhood. This is a common factor. You get this with almost everything. If you build a Tube station then you are going to have some people who really take the Tube every day and they are going to pay a higher premium than the average Londoner. You get an exaggeration of the willingness to pay the house price. I think with buildings very close to the football stadium you get an extreme kind of outcome. It overstates, a little bit, the actual willingness of an average Londoner to pay, but in certain areas there is an impact. Again, you keep asking the question, what would happen if we did the same but without the stadium. An empirical researcher just cannot give you the answer, because unless you put in a lot of money somewhere and we do something like a quasi-experiment, which serves precisely that purpose, we will never know. James Cleverly AM: Just quickly before I allow us to move on, I just want to explore how evenly the benefits are spread and whether there are particular pockets. I think, Michelle, you initially and then perhaps, Pete, I’d like to bring you in. You have a background with regards to diversity inclusion and that kind of stuff. Do you feel from your experience that the benefits that come from a redevelopment like this are shared fairly evenly? Are there certain groups who really feel that they have got a massive upturn at the expense of other groups? What is your experience? Michelle Moore (Moore Development Consultancy): It is not fair and it is unequal in lots of ways. If we just think about the communities in which a lot of the football clubs serve, thinking about some of the top football clubs and where they are situated, for example you have West Ham that is in a very Asian community and we still have 2% of Asians that actually attend football matches. Even when you look really quickly at the statistics, we know that lots and lots of different groups, and lots of our vulnerable groups are not accessing football clubs. At the end of the day, the communities in which they serve are the communities that actually
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often enable those football clubs to exist in a way. If we look at it from another angle, in terms of they are the customers. The reality of it is that football clubs tend to do what football clubs want to do. Football clubs are notorious at not doing things in the way that they should be doing them. I know I am in the room with people who are from football clubs. I have worked in a premiership football club. You only have to look at the fact that we have some of our most vulnerable people in the country who are not able to access and go and enjoy football, in terms of disabled people. Over half of our premiership football clubs do not meet the Disability Discrimination Act (DDA) requirements and do not, therefore, provide the access for disabled people. That to me is not only illegal, it is unfair. Over a fifth of our population are not able to enjoy the game. When you look at vulnerable people, when you look at your community groups, when you look at what the football club is trying to do in terms of proper engagement policies that look at working with the community, it has to be reflective about that community. Often a young Asian woman would not necessarily go into a football ground to watch a football match, because she would not look around and see people that looked like her. It would not necessarily be a safe space. I am quite hard, I am from South London, but I find it quite intimidating. The fact is those football clubs are not reflective even in the business side of that football club. You go into the football club, you will see black, Asian and minority ethnic people in positions of retail, as stewards, as security, but you will not actually see them in any large numbers in the structure, in terms of the administration of that football club. You will not see them on the governance board of those football clubs. Until we really look at the leadership that exists within the boards and really think carefully about the diversity within those boards, some of these issues are never really going to be tackled. Those community groups are on the doorstep, if you like, of some of those football clubs. Just in relation to that last question, I worked at Charlton Athletic Football Club when it was not a Premiership football club. When we got into the Premiership, part of my job was to engage with the community and I remember knocking on the doors on the street that were most local to the football club and working with the community. Then, what happened when we got into the Premiership, that was an area of real deprivation and those house prices went up because of the fact that we were a Premiership football club. What it did for those young people was huge in terms of some of the work that we were doing around building that civic pride. Getting back to my earlier point, if we are not able to really think critically about the diversity angle and the governance issue of football clubs, then we are not able to move some of those issues forward. It is a big problem for sport generally. Sport England has looked at this issue and has set targets for the national governing bodies of sport to have 25% of their boards with women on them by 2017. Woefully, we are not going to meet that target. It will not be met. However, we will have to see whether the sanctions around loss of funding to those governing boards will actually take effect and that is one of the things that exists within football clubs. In terms of groups accessing football clubs and football clubs’ understanding of how to access groups, I think it has a long way to go. There is some really good work out there that exists in pockets, but there is also some clumsy work out there. I know of one football club that actually decided, “We are going to look at our pricing structure. We are going to look at affordability
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issues. We are going to give away a whole set of free tickets to this particular community group”. Actually, this community group needed prayer space and they ended up having to pray on concourse. It was all well-meaning in the first instance, but actually clumsily implemented. There are lots of issues on lots of different levels and it is not really going to move on in a real and meaningful way until we really tackle some of the leadership issues that exist within the governance within football. James Cleverly AM: I was just saying, from your point of view, in terms of someone tasked with delivering that positive benefit into the community, how comfortable are you that that has been spread as evenly as possible? What have you done? Is there anything that Michelle [Moore] has said that you feel you can comment on? Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): Sure. First of all, it is the obvious things. You have to work hard at it. If any football club or any organisation thinks you can just build it and they will come, that is wrong because that does not work. I would agree entirely with Michelle in what she has said, really. From my perspective - and this is purely a Manchester City perspective - we do a huge amount of work with the Manchester Bangladeshi women’s group, for example. To have a significant number of Bangladeshi women coming to football matches at Etihad Stadium is probably unusual. We are constantly working at it. Whilst at one time we put lots of effort into assisting that group to come to football matches, they now come under their own steam and we can work with other communities. We stay in touch, but they come now because they want to come. We have a reasonably good, clean bill of health in terms of our disability work and so on and the access to the stadium, but it is hard work. We are relatively representative of Manchester. Not entirely and there is a long way to go, and I would not like to be complacent that we have it all right. We have not. We have a huge amount to do. What is important is that we try to stay aware of what is going on in the community, who our community is, what is important and what the barriers are, and to work at those to try to break them down. We are in the second year of a project called Project F at the football club, which is about involving women in football Not just coming and watching, but actually getting work in football and being on the board and actually making football part of their lives at every single level. That ranges from the development of the redeveloped Manchester City women’s football team, to careers for women at every single level, basically. There is a huge amount going on, but the answer is that it is hard work and you have to work with organisations to make those things happen. Underneath all of this is a point that has been made several times. Football clubs have to be commercially successful. Otherwise, they would not exist. The viability is really important and we have to make sure that we allow football clubs to survive and develop and have the ability to operate commercially and successfully. Otherwise, none of that happens because staying solvent is where all the focus will end up being. The two things have to work hand-in-hand.
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We have to recognise that we are commercial entities at the end of the day, but equally there is a massive responsibility on those entities to do something representative of the community. Murad Qureshi AM: Just on the local economy effect on match day, Pete, you went into some detail about the impact on Manchester. Manchester at the moment monopolises the Premiership title. Would that drop off if that was not the case and what would be the local impact in that situation? Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): Again, it is difficult to say, but I think Manchester would be a very different place than it is now. Local house prices with the current regeneration that is going on around our training ground development, have gone up around about 240%. These are back-to-back Victorian terraced houses that had zero value. You could buy them for £1 six years ago. Now their value has seriously gone up because what they looked on in the past was derelict industrial wasteland, basically, and it had been like that for 30-odd years. It has cost us £80 million to clean that land and to put a training ground on it. The Government, the city council, nobody was putting that money in. The football clubs put that money in and changed the environment and people’s mind-sets changed to make that happen. If the football club was not doing that or had done it in the greenbelt somewhere, or was in a lower division and just not as successful as it is, no, I do not think it would be happening. We would still have the wasteland. We would have the depression. With all due respect, outside the London bubble, it really is hard work out there. It is not the same out there, I can assure you. Murad Qureshi AM: You have confirmed what I tend to experience as a day-tripper to Manchester. Greater Manchester’s monopolisation of the Premiership title is very important to Manchester, period, and it s claim to be the second city of the UK. Can I just go to the next area of questioning? We have kind of touched on it with Michelle’s [Moore] contribution about the level of community group involvement we can expect. I will direct my question to Sarah. Should we be realistic about what we can expect out of clubs, given that actually most of them are big businesses; and the kind of money they spend on social programmes can only buy them half a player during the summer sale of footballers? Sarah Ebanja (Chair, Newlon Group, and independent consultant): I do not think it necessarily should be looked at like that. The clubs are businesses. At Arsenal, I am not sure what your turnover is now, £100 million or a bit more. Whatever the annual turnover is, they are big businesses located in your local area, so they will be spending money not just on players. They will be spending money to run their day-to-day operations, to provide catering, so they will be buying in goods and services. The issue is whether there are local businesses in the area that are able to be suppliers of those goods and services? Are there local residents of the areas who want to work there and who want to be employees? They do have to have their doors open to local people. It is just as incumbent on the local authority, the voluntary sector, and other public sector bodies in the area to ensure that they are doing whatever they can to prepare individuals to be able to take those opportunities. To apply for those opportunities and win the business on
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merit, whether it is winning the job position on merit or winning the procurement opportunities on merit. Whoever was there, whether you had a Westfield in Stratford or Shepherd’s Bush, it was incumbent on the public sector to help people get those opportunities. From the perspective of Islington and Arsenal, they are outward-facing. It is not just about Arsenal and the community programme, the social aspect and all the corporate social responsibility. It is really important for public sector policymakers and those who work in the public sector to recognise that it is not just about corporate social responsibility (CSR). We all work for somebody. Whether we are from the local area or from a neighbouring borough - which might only be a street away in the case of Arsenal with Hackney only a five-minute walk away and similarly with Camden as well - it is really important that opportunities are made for local people. However, I would not expect any business, just as I would not expect any public sector, to take people on just because they are from the local area if they are not able to deliver what is required to deliver the service you are trying to do. The public sector plays a crucial role in ensuring that people can get in front to pitch, as appropriate, and to win those opportunities. Murad Qureshi AM: In the case of Arsenal and Islington, has there been any attempt to subsequently quantify the impact in studies since the move? We are hearing this all anecdotally and verbally. In some ways, we need a cold perspective from - dare I say it - an academic. We are hearing similar things from other parts of London and we just need to know if it has actually materialised from a third source. Sarah Ebanja (Chair, Newlon Group, and independent consultant): Islington Council has not done any studies in terms of formal studies, as far as I am aware, to evaluate the particular aspects. Obviously, it is quite easy to say whether or not section 106 obligations have been achieved. It is quite easy to see what the impact has been on the local area. There were businesses there before. They have moved out. They have been relocated and new people have come in and are running business, or whether it is people who are already operating in the area that are trading. However, I do not think they have done a formal evaluation of that. Murad Qureshi AM: I will just give one example. It does not really come in the social programmes that clubs may have, but taking local stewards clearly has some benefits. I started life as a steward at Lord’s Cricket Ground, would you believe. People move on. That is not necessarily taken up as a social benefit. It is a commercial, hard-line decision. Sarah Ebanja (Chair, Newlon Group, and independent consultant): It is a job. Murad Qureshi AM: Yes, exactly. Sarah Ebanja (Chair, Newlon Group, and independent consultant): Yes, it is a job as well. I know at the time that Emirates was opening, we - the Council - did a lot of work with the potential providers who might provide the hospitality and the stewardship services because I think you buy those in. There were two or three big companies that vied for that and the company that finally was appointed was building up its workforce to deliver at Wembley and then Wembley was delayed. They were people from all over the north London area. It is finding out who is operating there because, obviously, like any business, they will be bringing in other
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companies as well to deliver the services. The local colleges were similarly working with those companies as well. Len Duvall AM: In terms of my questions, some of these have been answered in various bits. However, how do we explore if there are some gaps? If I can just say some general points first, it is quite interesting in terms of contrasting, albeit in a different context. In Manchester, we have a catalyst of the Commonwealth Games, public subsidy, a Council with vision and strong issues, and a key location a mile away from the city centre, as you said, of brownfield sites. It would be a tragedy if it was not used post-games. What is striking is the coming together and the consensus, both public and private. Contrasting Arsenal, Arsenal wants to move. Islington must have thought, “Wow, was it a great opportunity? Wow, what a lot of work here, to be honest”, before it realised that potentially some of the vision and some of that stuff, or did it come together fairly quickly? Antony Spencer (Managing Director, Stadium Capital Holdings): It is an interesting discussion because it started with John Sienkiewicz at the Government Office for London. Len Duvall AM: Yes, I knew John. Antony Spencer (Managing Director, Stadium Capital Holdings): When I went to Arsenal, at the time, they were looking at something else, which was Finsbury Park, so I went to them in 1998. To a certain extent, Islington Council thought my scheme was too grandiose, so exactly what you were saying. For one year, the scheme never went anywhere because they were following another route. You have just hit the nail on the head because it took the Council with vision and it also took the Government. It could not have happened on its own. From the football club’s point of view, they were not property developers. From their point of view, their advisers were also telling them, “The Council is the one who is going to give the planning permission. If the Council is not going to give the planning permission and is not in favour of it, it is not going to happen”. For one year, this scheme just lay in a drawer. Len Duvall AM: This is something you obviously touched on earlier on and I mentioned earlier in a private discussion. I know borough boundaries are important, but actually that relationship between your location and the King’s Cross regeneration - I think you mentioned it, Sarah [Ebanja] - is so crucial. In a sense, albeit there has been other work, we were the first on the fringes of that to show what can happen and the potential of some of that. That was not really implicit in some of the plans, was it, about the linkages there, about that location and about the viability of house prices? That area is bigger, is it not, in some senses? Sarah Ebanja (Chair, Newlon Group, and independent consultant): It was, actually, yes. Also, the other contextual thing is that Islington was traditionally, from a political perspective, a Labour heartland. It was in the late 1990s that the Liberal Democrats took power. Actually, in terms of Arsenal and its whole thinking about the stadium, it straddled two political administrations. That would obviously have impacts on how they proceeded with the Council.
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When I went to Islington, I had been working in the Government Office for London as their lead for regeneration in London from the regional government perspective, so I was responsible overall for the big programmes like the Housing Action Trust, the Single Regeneration Budgets (SRBs) and things like that. On the aspect of Arsenal, when Arsenal approached the Council, what you actually had in north London - if you imagine this is King’s Cross and Tottenham and Seven Sisters is up here - is a whole swathe of SRB regeneration programmes going on. You had King’s Cross going on. You had at that time the tri-borough Finsbury Park SRB going on, which is midway through Seven Sisters Road. If you carried on along Seven Sisters Road, you had the bridge and the New Deal for Communities regeneration going on. Actually, what you had was an arc of regeneration that was public sector funded, but then this gap in between. Therefore, the Arsenal Stadium regeneration scheme touched on the King’s Cross area, which runs up to Holloway Road, because it straddled across to Caledonian Road, and it also touched on the Finsbury Park one because that was part of it. That was a key part and it was a key part of all the presentations when we were thinking early on about how we needed this to fit in with that overall swathe of regeneration in north London. So it was an important part. From the Council’s perspective, as a vision, if planning permission was awarded by the Council and awarded by the Secretary of the State and the Greater London Authority as well, the Council knew then that it would be securing significant net public sector benefits overall. It also fully recognised that it would only give planning permission if it believed that it was deliverable and it had the finances to do the entire scheme, not just their stadium, and that the programme’s finances could be accommodated within the programme. It was really important we understood that and we had specialist advisers who were able to scrutinise the business plans of Arsenal in that respect. That viability issue was crucial. From memory, for every year that that stadium development could have been delayed, it would create an additional cost of £50 million or £60 million for Arsenal, and they would get to a point when it would not be viable for them to do it. If planning permission was to be awarded, we as a Council then wanted to ensure that our processes did not cause delay in the programme. We had to think about how we can ensure democratic accountability. Yet at the same time recognise that this was considered one of the most complicated and complex regeneration programmes at the time, because of the sheer volume of parties that had to be involved. I think there were about 3,000 legal agreements with different parties. The Council had about 250 of those. We had to ensure that somebody was holding the ring and we had that big picture overall. Len Duvall AM: If we can return to the issues around financial returns, it is quite clear from Arsenal Football Club’s (AFC) perspective what they are. Just take us a little bit further on, Sarah. How did Islington and Arsenal assess the economic impact of the new stadium? Was it separate advisers or did you come to a joint view on what that economic impact would be for the area? How did you do that assessment?
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Sarah Ebanja (Chair, Newlon Group, and independent consultant): If Arsenal did any assessments, we would check them. We would have them double-checked and we would have our own assessments undertaken by third parties to have a look at that. In many respects, in terms of the economic impact, for example, from increased business rates or increased population, we did have to give great thought to the mix of housing. Not just in terms of the increased council tax that would come in, but increased demands on our public services. These were basic public services like social services, education and things on a day-to- day basis. On some of the stuff related to infrastructure, Arsenal had to provide us additional running costs to cover that. For example, where there was additional green space created, they had to provide money to enable that to be maintained for the next 25 years. As a Council, we did ask for a £500,000 contribution to a community pot which the local community would decide how best to utilise. In deciding how best to utilise that, it was important that there was a community body that could run that, so AFC also provided funding for that for four consecutive years, which was about another £200,000 or something like that. For any of the asks that the Council had and required, we had to ensure that what we were not getting was something from Arsenal which was great, fantastic and new, but then had ongoing running costs that we would have to incur ourselves. We would seek to recover those ongoing running costs from Arsenal. In terms of the business space, it was all linked to the rates that it would generate and, obviously, whether it would improve the economic performance of the area. Len Duvall AM: OK. If I could turn to Gabriel and maybe Pete and Michelle because I think you touched on some of those issues in terms of new thinking in the future? I think stadia are cultural anchors. It does not matter whether they are football stadia or other stadia. How do you think local councils and football clubs assess the value of stadia developments to the wider community and how can the local community share the additional value created by such facilities? What is the thinking about that? Where should we be looking for the future? We have some great practice around here and we can point to some bad practice and maybe some anxieties about some things that are going on in other places. I am a Hammers [West Ham United] fan. In that sense, how would we start thinking around some of those issues around that sort of evaluation and participation? Gabriel Ahlfeldt (Associate Professor of Urban Economics and Land Development, London School of Economics): To start with, if you look at the empirical evidence on what kind of impact stadia had in the past, the general rule you should follow is to try to maximise the benefits and minimise the costs. What is the maximum potential benefit that you can deliver to the community, holding all other things constant, given what you can influence as a local authority? I guess it is the architecture, so you want to make sure you have a newly-built stadium with proper architecture that fits and respects the environment, but also tries to illuminate it to some
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extent. It makes a hell of a lot of difference whether you have functional architecture, something that just stands there as a great big box, or something that is somehow in a very positive way. There are different answers to different questions and I am not saying you have to build the Tate Modern everywhere, but that you pay attention to the way you visually design the stadium. That seems to make a difference if you look at the impact of past stadia. On the cost side, the big thing seems to be congestion. Not only in London but also if you look to some examples in Germany and in the US, there are examples where people just had the idea wrong about how people would come to the stadium. Sometimes they just underestimated the number of private cars that were going to be used and then they would park and congest the area. Sometimes it was just a mismatch of the pathways that visitors would take to the stadium, so there were overly congested roads on game days. If you just numerically summarise very briefly the evidence we have, this is probably the single most important point where you can minimise cost by means of good planning. Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): My answer might be slightly strange, actually, because what we have done in the last 12 years or so is learn what the impact was expected to be, and the fact that we have changed the way we work because we all had it wrong, both ourselves and the city council, really. Written into the section 106 agreement for the stadium was a vast range of community access to facilities. It was identified as X number of lounges a week for this and X number of lounges for that and so on. Probably for the first 6 or 12 months or so, a huge amount of effort went in to getting community groups using the best lounge in the stadium. Band practice would happen there rather than the community hall, and they hated it. They stopped using it. Apart from dragging them screaming and kicking and forcing them to use it, it was very difficult. Some things that were not in the agreement went very well. For example, we could play street sports on our concourses because they were under cover. They were safe and well run. It was never in the agreement but was incredibly popular. That is what people asked to do and we did it and we still do that. What happened subsequently was we did renegotiate the section 106 and what was asked for was more support for people to do things in their own streets and in their own neighbours. We increased the Waterfall Fund and the access to it and the outreach work that we undertake. There, for example, we funded the lighting of primary school playgrounds, the development of - it has a new name now - the Community Sports Leaders, and the opportunities for people to play things and do things safely and properly where we live and change the street-scene, basically. We developed a whole play street strategy around kicking balls about on the street, street theatre and a whole range of things. Whilst stadium access is still there and we have kept a degree of it, we did jointly recognise with the Council that it was not working and something else was needed. What was in high demand was the outreach work and opportunities around health and wellbeing, education opportunities, literacy programmes and those types of things, so we did much more of that. We fund more of that, generally speaking. We measure that annually with
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the city to make sure that we can see the impact that is having. Are people, for example, on the literacy programme accessing work? Are they changing their lives? Are they doing things differently? Now it is this health and wellbeing thing that really is taking off and working much better than giving somebody a lounge when actually, even if they can afford to use the lounge, they cannot afford the catering in it anyway. It was a false bit of nonsense and a promise that was a bit too much. What I hope we did in a reasonable amount of time was to recognise that problem and address it. Michelle Moore (Moore Development Consultancy): There was some research done by Supporters Direct back in 2010 and they talked about this culture change that is needed and actually a much more holistic approach to how we look at community development, community outreach and the benefits for the club and the community; and not just being done by the separate charitable trust or the community scheme or the foundation. How does that foundation really work closely with the core business of the football club? How do they cross- fertilise? There are some really good examples on the boards of those charitable trusts where the senior executives from the football club are on those boards. Often, what you will find is a lot of the executives in the business in terms of the football club do not actually understand what the charitable trust is doing. They could be reaching - like some of our amazing community schemes are reaching - thousands and thousands of young people each week. They are involved in huge amounts of crime prevention and wellbeing programmes up and down the country. Actually, the football club does not know about that and the ordinary fan does not know about that. There is a bit of cultural sharing that needs to take place there. Then the reporting of all of that is really important, so the outcomes of that - that are really hard to evaluate but can be evaluated and are evaluated through different ways in terms of attitudinal questionnaires and all sorts of different things - have to be reported back within the core business of that board and that governance. Often they are not because they are not seen as important as the rest of the core business of that club. Also, there is the importance of involving the supporters and the fans in the decision-making processes of the club. If that football club is a true community football club, what it would be doing is what Pete [Bradshaw] talks about. Really good consultation, and they will be looking at how they can involve those supporters and those fans in the running of that club in some way. Then you would build real social capital. You would build a real legacy and loyalty with that community. Football clubs need to ask themselves whether they are just delivering activities to the community or are actually being a community club. Those are things that can find their way into some kind of vision for the future, but I do think there is a business case in terms of social inclusion and diversity. We are well-versed in that, so that is something that those boards need to get their heads around. We need to think really carefully about access. For example, if you are a season ticket-holder at one of our most famous clubs and you happen to be disabled, you can only go to one in three of those matches. That is just not OK. That is just unacceptable. There are lots of things that we can do to try to
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start that cultural change and try to ensure that it is not just the minority we are talking about. We are talking about a handful of clubs that are doing this really good work. We have not even mentioned - and I know it might not be a part of it - the grassroots football clubs that actually could show some of the top clubs a real thing or two about community engagement and involvement. However, the funding for lots of grassroots football clubs is reduced and has significantly been reduced more recently, so that is difficult for them. I just wanted to put in there as well that the power of sport is transformational in lots of ways and we have not actually touched upon that because we have been talking about the business of it and all those bits that go with it. Actually, fundamentally, the power of sport can attract and bring people together in a way that nothing else can. The power and the brand that the football club has are huge. It must leverage that with partners and local authorities to tackle the bigger issues in our communities. Len Duvall AM: Thank you. Murad Qureshi AM: Can I just focus on one area of value in stadium development that is clearly of value to the wider community and that is transport infrastructure? I was just interested. If you look at the World Cup at the moment, you would be forgiven for thinking that all the money has been spent on the stadia. It has not. It has actually been spent on transport infrastructure. The Maracanã is one example. They spent R$1 billion on the stadium but R$2 billion on the local transport infrastructure improvements. It just makes me come back to Arsenal and the section 106 agreement. The agreement there was for £7.6 million. There are still question marks raised about the outputs from that contribution. I just wanted from you, Sarah, an appreciation of how we got there and how we still seem to be in a position where Transport for London (TfL) has taken up only £3 million of the £7.6 million. Sarah Ebanja (Chair, Newlon Group, and independent consultant): First of all, the £7.6 million was made up of three distinct areas. Just going back to the geography of Highbury Stadium, the closest public transport station was Arsenal Station and probably a 10 or 15-minute walk away you had Finsbury Park. They were, typically, the public transport stations that people would use to go to the previous stadium, Highbury. Then, if you roll forward to the planning application for what is now termed Emirates Stadium, the closest stations included Arsenal and Finsbury Park but also Holloway Road Station, which is probably a 5-minute walk away, and also Highbury & Islington Station, which is probably a 10 or 15-minute walk away. We obviously have to go back to about 2000 when the plans were being submitted and the local authority was considering what we wanted. We sought to have improvements done to Holloway Road Underground Station, which is not a very deep station but it was to bring back into use a disused lift shaft. This was at a time when TfL was trying to make as many stations as possible fully accessible with disabled access. We were also mindful of Drayton Park Station, which is now being used as a national overground station and which goes into Moorgate. From the Council’s perspective, we were quite keen to see that station come into use to service Emirates
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Stadium. It is, literally, a three-minute walk away. To do that would require an extension of the platform and also extended services because it has limited services. It does not run after a certain time in the evening, so it was not particularly good for weekday evening, and I do not think the service ran on a Saturday, either. The third area was to do with Finsbury Park. In essence, the £7.6 million was made up of a £5 million contribution towards the Holloway Road Station improvements, £2 million towards the Drayton Park improvements - I think there were two lots there - and also towards the Finsbury Park improvements in terms of cosmetically outside what the layout looks like. The other thing I should mention is that this was all within the context that the Council itself is not in control of public transport. This was within the context that TfL or London Underground was in control of the Underground stations and National Rail, and whoever the operator was at the time was in control of Drayton Park Station. The section 106 agreement specifically said a contribution of up to £5 million towards improvements at Holloway Road Underground Station on the basis that those improvements would commence within a five-year period. With Drayton Park, there was a £2 million contribution if the operator increased the service operations to running later in the evenings and a service on Saturday, and a £500,000 contribution to just improving that station aspect anyway. I have already mentioned the Finsbury Park one. During my first involvement with the Holloway Road Underground Station improvements in my first discussions with TfL, we were talking about improvements costing possibly somewhere between £8 million and £15 million. It was on that basis that the Council asked for a contribution of £5 million towards it. During the subsequent two years in terms of looking at the station improvements for Holloway Road, the cost of that went up, with different options ranging between £45 million and £80 million. It was not in the TfL programme, so I am not sure whether that fell away or whether the requirements on the club changed because the works on that were not going to start within the five-years stipulated in the section 106 agreement. For Drayton Park, the operator said that they had no intention of increasing the services and they had three years to notify the Council of their desire to increase the services, in which case we would go to Arsenal to recover £2 million to contribute towards that. They said that they did not want to increase services. I think you made a contribution to Drayton Park, just for cosmetic improvements -- Ken Friar OBE (Director, Arsenal Football Club): We did; £500,000. Sarah Ebanja (Chair, Newlon Group, and independent consultant): -- and I believe you made a contribution to the Finsbury Park requirements. That was the main issue linked to that. In essence, what that led to, particularly if we go to Holloway Road Station, was that the station is closed an hour before the match starts, reopened after the match starts and shut again immediately at the end of the match.
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Murad Qureshi AM: We have been giving a briefing on this, so I am just going by the figures we have been given. It just seems that of that £7.6 million, only £3 million has been spent. Holloway Road did not go ahead -- Sarah Ebanja (Chair, Newlon Group, and independent consultant): Holloway Road did not go ahead, yes. Murad Qureshi AM: -- and there has been a study on the improvement of Drayton Park Station. Certainly, as someone who goes occasionally to Emirates, it is always stark to see a station like that closed on match days. That would need Network Rail. In hindsight, should we not have had them involved earlier, TfL and Network Rail? Sarah Ebanja (Chair, Newlon Group, and independent consultant): They were involved from the very beginning. Network Rail and TfL were involved from the very start. Murad Qureshi AM: Right from the very start? Sarah Ebanja (Chair, Newlon Group, and independent consultant): As soon as I started they were involved, and I took over from somebody who had been doing the job for about six months, so they had been involved very much early on. My understanding is that actually in the end it was not built in as a priority. From the options that TfL had to do improvements to London stations and they were deciding where they would spend their money, Holloway Road Station was not a priority for being addressed. Murad Qureshi AM: OK. I will accept that. Whilst the Brazilians have been writing about the lack of investment, it seems as though the story in Brazil has not been fully appreciated from here. Sarah Ebanja (Chair, Newlon Group, and independent consultant): Just one thing to add there. The other thing is that this is very much a private sector-led regeneration scheme. Actually, the overall amount of public sector investment that went into infrastructure was a contribution of maybe up to £4 million towards a bridge from the London Development Agency, which was to improve accessibility in the area, but there were no other contributions from the public sector towards this. I mention that within a context. It goes back to what Pete and indeed Antony mentioned. The sheer costs of infrastructure now in developing were high then anyway, but the Council was able to secure contributions from the clubs. Murad Qureshi AM: Yes, it is an awkward thing to get over. It was needed and its dimensions are huge because of the number of fans. Antony Spencer (Managing Director, Stadium Capital Holdings): What I was going to say is that you asked a question about engaging and we engaged with Network Rail and we engaged with TfL right at the beginning. I sat in many, many meetings with TfL. Len [Duvall], as you know, with the issues I had with TfL buses on Greenwich Station, that was a microcosm
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of what we were talking about with this situation at Arsenal. There has to be a will. At the end of the day, we were the private sector. If the public sector did not want to improve Holloway Road Underground Station and just did not want to do it, we could not force it to. We looked at it and said, “You could actually bring forward one shaft. There is a lift shaft that could be converted into a staircase and it would improve Holloway Road Underground Station”, but the issue was it would not be DDA compliant. Because it would not be DDA compliant, they would not deal with it. I think it was £80 million to £100 million that was needed. Ken Friar OBE (Director, Arsenal Football Club): There was no business case for it. Antony Spencer (Managing Director, Stadium Capital Holdings): There was no business case. That is what they were saying. Murad Qureshi AM: OK. Clearly, there are other people who know more about what happened in those negotiations than I do. On just the wider value, it has always struck me that it is becoming part of the model for valuing stadia in the wider community and dare I say the global community. They have come in and bought the name of the Emirate Stadium and Etihad in Manchester. We are probably going to see that with QPR. Do you know at the outset what value they are going to derive? They do not really get involved in the development as such on the ground, but they do derive a benefit at the end. To what extent will it be factored into with something like QPR’s move to Old Oak Common? Sarah Ebanja (Chair, Newlon Group, and independent consultant): They are global grounds. Antony Spencer (Managing Director, Stadium Capital Holdings): Yes, it is a global ground. It is a specialist question. To a certain extent, if you ask Ken [Friar] about originally at Arsenal in terms of the naming rights that were factored in, and in terms of Spurs [Tottenham Hotspur] and what is going on in terms of the economic model that is being done, there is a model that it is being done and the value of that is put into it. It depends how successful the football club is. One of the things you mentioned was you were talking about the benefits. The interesting thing is, what is a football stadium worth without the football club? If the football club is not successful, then the stadium has a second-hand value, or if Arsenal were to move into a different league, as we saw with QPR. The interesting thing is I was working with Brentford Football Club and was instrumental in them actually getting their ground and acquiring their land. When I worked with them, they said to me that they did not have any money. The only way to put that together was to do a financial model that allowed - based very similarly on how we did Arsenal - them to provide other development and to enable the whole thing to happen.
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In terms of your question, the value is put down in the same way that you are selling residential or commercial space. Everything gets valued. It is the viability to calculate social housing, so you actually have your community benefits based on a model. Murad Qureshi AM: As you said, it is in the Tottenham model and it is almost certainly going to be in the QPR model. I just think it would be useful to find out to what extent it is factored in right from the outset, when these proposals are put together and to what extent, in Arsenal’s case, it was a tool. Were the naming rights factored in at the outset? Ken Friar OBE (Director, Arsenal Football Club): Yes, they were. Sarah Ebanja (Chair, Newlon Group, and independent consultant): Not the actual name, but I think the value. Ken Friar OBE (Director, Arsenal Football Club): Not the name, but the value, yes. Murad Qureshi AM: Did you get more than that or less than that? Ken Friar OBE (Director, Arsenal Football Club): It is a difficult question to give you a straightforward answer on because we were a football club with a very small profit at that time and therefore we were committed to finding up to £500 million. You have to remember this was 14 or 15 years ago when money was less or worth less, anyway. We had to find that money, so we entered into long-term deals to get that money but brought forward, so they were not necessarily the best deals that are available, but were the best deals available at that time. We have been criticised for it since. People are saying, “You could have got more”, but we could not have got more. Had we demanded more, we would not be sitting in the stadium we are sitting in today. It was a necessary part of what we were doing. Antony Spencer (Managing Director, Stadium Capital Holdings): There is one other thing about the actual stadium. Everyone believed that there was so much money in the football club and there was so much money in the stadium. In actual fact, in 2003 the stadium stalled. People forget that. It actually stopped. There was not the funding there to deliver the stadium. At that point, that was when the GLA came together with Arsenal to actually understand the fact that they could not deliver the stadium. It was only at that point, Ken, when a solution was found whereby there was help from the GLA, and you were able to do your Emirates deal, that the money was there to enable the stadium to proceed. Len Duvall AM: There has actually been some work done on naming rights in the previous scrutiny report, quite extensively reporting on those issues in relation to the Olympic stadia and buildings. Gareth Bacon AM (Chairman): Can I just pick up a point there? I was not on the GLA then, so I have no idea what the GLA’s involvement was. You said there was help from the GLA to restart the deal. Are you talking about financial help?
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Antony Spencer (Managing Director, Stadium Capital Holdings): It involved a meeting with Ken Livingstone [former Mayor of London]. It was initiated to take all the items that were stalling the stadium and to see whether they could be resolved. Some of them were land issues. One of them related to the Holloway Road Underground Station, at the end of the day, where from the club’s point of view they could not proceed with an uncapped liability. Initially, that was a big, big issue. I believe the GLA actually stepped in at that point to say it would pay for it but in fact did not. Gareth Bacon AM (Chairman): Was the promise of paying for it enough to get the deal going again, even though it was then reneged on and did not actually come to fruition? Antony Spencer (Managing Director, Stadium Capital Holdings): No, it was not that. It was the fact that there was a liability that was capped. As far as the club was concerned, it was £7.6 million. Gareth Bacon AM (Chairman): That goes into the line of questioning I wanted to explore now about how clubs are funded, what role the stadia play in that and what they can actually deliver. Something that Michelle [Moore] was talking about earlier was very much about how clubs are run and what they see their role as being within the community. I was quite struck by some of the things that Pete was talking about that Manchester City have been doing from a value-added perspective, and from a social point of view. We agreed earlier on that a lot of that was because you want to rather than because you have to. Manchester City’s financial resources have changed exponentially since they have had the stadium. They are not necessarily linked, are they? It is because a foreign investor has come in with a considerable investment into the club. Is that right? Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): That is right, yes. The levels of outreach, the work we have done in the community and all those big policy issues were in place long before the present ownership. The other thing is that when we built the stadium, I was the project leader for the build of the stadium. As soon as we completed that, I had a project to do, which was the restructuring of the club’s work in the community. We looked at what we were doing and what was relevant and what we had been doing. Similar to Arsenal, we kicked off nearly 30 years ago as part of the early 1980s a City in the Community programme, but it needed a review. That happened in the original ownership, before Thaksin Shinawatra [former Prime Minister of Thailand and former owner of Manchester City Football Club], before the present ownership. At that point in time, that was probably the point where the club hit its maximum numbers in terms of outreach, the type of work it was doing, the whole cornerstone work around literacy, numeracy, enterprise, engagement, health and wellbeing and so on. So those things were in place anyway. What has happened with the subsequent takeover is that the ownership, the chairman and everybody, has recognised how important that is and that it has to remain a cornerstone of the club. Nothing is going to move the chairman and the board away from that way of thinking. It has to remain a community-focused football club. What is important is that the work we are doing in Manchester has now been lifted and is already happening in New York. So we have a
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City in the Community programme in New York based on what we do in Manchester and outreach into schools and communities. Some of the deprivation in New York is far worse than in Manchester. We are doing the same in Melbourne, in Kuala Lumpur, in Abu Dhabi, Beirut and Sierra Leone. All of those things are happening based on, from our perspective, the Manchester model. That was lifted and taken as a scheme of very real success and is our driver going forward. We will do nothing without the community being at the forefront of it. Gareth Bacon AM (Chairman): Is it fair to say then that a lot of the outreach stuff that Manchester City is doing and that was part of the stadium redevelopment, would have happened anyway, but the change of ownership in recent years has taken it up a notch because you can afford to do more? Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): It has enabled things to happen in a more comfortable way. We have to remember that the operation of the football club is under incredible scrutiny at the moment, with financial fair play and other things as well. We cannot just throw money at the city and the community and think that is the be all and end all. It is a trust in its own right. It has to work under a regulation as a trust, so it is not the case, whatever people think, that we can just throw money at things. That is not the answer. The community scheme - as well as everything else we do - has to be valuable and sustainable and it is, so that is important. It gets its funding from club partners and well-wishers and contributors and so on. There is no public money put into that scheme anymore. It is all done through private donation, which is a big change, but that is a benefit. I do not think the change in ownership has made our community work any different in what we do. It is just part and parcel of where we think it is going. It is outreaching more. It is doing different things. We are able to undertake that work in other places as well as Manchester, so that is the difference, really. Gareth Bacon AM (Chairman): Can you explain to us how the revenue-sharing agreement works between the club and the council? You alluded to the fact that it might have changed a bit in one of your earlier answers. Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): Yes. It was an unbelievably complex arrangement. In fairness, it was not doing a great deal of good to the city council and certainly not to the football club, either. Roughly speaking, what happened was the previous ground at Main Road had a capacity of 32,000. So the agreement that was put in place in 1998 and which came into effect in 2003 was that, for everything above the 32,000 threshold, a 50% share of the income of that seating, 32,000 upwards, would be paid to the Council. When we hit 40,000, there was a premium that was negotiable. It averaged at 57.5%, so, for everything at 40,000 and above, 57.5% was paid to the Council. What also happened - and this 57.5% number keeps appearing - is that the car-parking revenue, concert revenue and events revenue was all shared at 57.5% with the city. There was a to-be-determined agreement on an annual basis that any naming rights would have to have a
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share with the city as well. Subsequently, there were never any naming rights because it was not worthwhile, basically. What happened is that there were a number of years when we did not have any concerts and therefore the Council’s share of the income went down. That gave the Council problems in terms of the Waterfall Fund because there were too many variables and there was not this regular income. It did not know how much it was going to get every year and therefore it could never really plan more than the period it was in, basically. In terms of investing in sport and community facilities and the community chest, it was very difficult. Therefore, the Council was keen to renegotiate, but so were we because naming rights were the big prize, if you like, for us. In 2009 we did renegotiate a deal. Basically, where we are at the moment is that we pay a base rent to the Council for the stadium of £4.3 million. There is a small share then of the rental agreement for every naming rights deal we do, but it is acceptable. Then there is a share of up to a maximum of £200,000 a game for all the European games that take place, so it is a different amount whether it is Europa League or Champions League, but the Council will get a payment out of that. What has happened since 2009 is the Council has been guaranteed a minimum of £4.3 million a year, whereas previously they were lucky to get £1 million. It was bouncing around from £900,000 to £1.2 million, so the Council is doing very well out of it, but it has this guaranteed income. What it has given the club back is this commercial driver to sell its conferences, to do naming rights, to not worry about the concert share all going to the Council. It is viable to do those things now. Until 2009, it almost was not worth it. Gareth Bacon AM (Chairman): You talked earlier as well about the section 106 agreement that had been originally agreed and shoehorning various groups into conference rooms to do things almost kicking and screaming; which made me think that sometimes a desk-based exercise at the beginning of this sort of process is not going to carry on in perpetuity because it does not work. Are you saying then on the back of your experience that actually flexibility in terms of how this relationship progresses in time is a good thing, in terms of driving success going forward? Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): Yes. The original agreement was a 20-year agreement under the section 106 for the share of income and the access to the stadium. There was always built in a five-year review and we have maintained that, actually, because in five years’ time I do not know what the world in east Manchester is going to look like, and neither, really, does the city council to a great extent. The world will have changed. We have built these review periods in that will be jointly agreed and we have set up a joint development board between ourselves and the city to make sure the money generated from the waterfall fund and joint ventures, is used wisely for the benefit of the city and the neighbourhood. We monitor how it is used. We do not have any say in how it is spent, but we watch how it is used. Flexibility and the ability to think about what you are doing are really important. Otherwise, we will just go on forever pretending it is all wonderful, when actually everybody around the corner,
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in the street or down the road is thinking, “We could be on another planet at that stage and if we are not careful they might as well built it somewhere else. It gives us nothing but disruption”. Hopefully - and the litmus test is going to be asking people - what people certainly in east Manchester would say is that they all know somebody who works there. Not just as a steward, a cleaner or a security guard, but in management, marketing or outreach work, really interesting roles. People in the local neighbourhood will say they know somebody who does that now. They take pride in that. That changes that person’s life, but it changes the life of the guys in the street that they live on and so on. We have just planted 2,000 mature trees. We needed three arboriculturalists to look after those. We have taken three young people to train as arboriculturalists. They would never have dreamed of that five years ago, but it bounces around in the local neighbourhood that they are the opportunities that are available. We have written into section 106 - and volunteered by the club - that we will continue to do the level of outreach we do. We will maintain our commitments to local training, local employment and local skills development. You mentioned innovative and visionary thinking from the Council earlier. The one thing that was really important was that, if we try to project back five years, I know the skills we needed. I needed water technicians. I have an underground reservoir because we have rainwater- harvesting on everything. We have our own watercourse. We generate our own energy. We need the technicians and the people to run that. I do not want to be importing them from other parts of the world because Manchester does not have those skills. Working with the Metropolitan University and the Manchester College, we have worked to make sure they have training courses and are thinking about the skills needed for the future. Instead of being told by the colleges what we are getting - and it is not just us it is other industries as well - what we are now able to do is work with local authorities and colleges to say, “These are the skills we need. How do you get people there?” That is what is going on at the moment and what is important. Gareth Bacon AM (Chairman): Thank you very much indeed. I am conscious of time because we are over-running. I want to ask a wrapping-up question, which I would like you all to answer. Bearing in mind the new developments that are going on in London like the Olympic Stadium, Tottenham, QPR, etc, what are the key lessons that we should be applying from previous developments like the Etihad Stadium, Emirates, etc? I will start with you, Antony, if I may, and work backwards. Antony Spencer (Managing Director, Stadium Capital Holdings): OK. Just following on from that last question and this is pertinent to what you were talking about, Manchester City are paying £4.3 million. Arsenal had to build their own stadium. I believe they are paying approximately £14 million in interest - or something like that - per year. The thing I would say to you is that there is an economic model and that economic model is really important as to viability. There is only so much that can be done. There are two models. One is a stadium being built and then given, effectively, and not having to go through all the
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problems you actually have to go through to make it happen, such as the situation with West Ham. They are renting a stadium, so they do not have to go through that. Coming back to your question, one of the key things is leadership, leadership from the Council and leadership from the Greater London Authority, and actually making things happen. It is the people who make things happen, whether it is Network Rail, whether it is TfL. It is the private and public sectors coming together and Government as well. You need to have a vision and you need to have people who you have a partnership with to make it happen. There has to be a driver. Also, there has to be total transparency in terms of the economic model so that everybody understands what exactly everybody wants out of it; and then putting a plan together to actually make it happen. To a certain extent, the public sector is key in terms of compulsory purchase order powers and the regeneration it actually needs, but it also has to have the courage and conviction to follow through. Sometimes to follow through early on these things because they are drivers. One of the big issues with Arsenal was the delay was costing approximately £20 million per annum. If the stadium was not built by a certain time, the costs were rising and yet the revenues were not. Sarah Ebanja (Chair, Newlon Group, and independent consultant): I agree with the points that Antony has made. It is very important at the very beginning that the main parties involved - so whoever is choosing to invest in bringing forth the development from the private sector perspective and the key public sector agencies involved - are very, very clear about what they believe they are trying to achieve; and where the no-nos are for each particular partner. I say that within the context of Islington and Arsenal. We were very clear with Arsenal at the very beginning that nowhere in our terms of reference as a local authority does it say, “Take care of a football club”, whereas actually we have those responsibilities to the communities and the businesses that reside in our locality. What are those benefits that we expect to see and how do we expect to mitigate those? There is clarity from the beginning, as opposed to bringing things out as you are going through the journey that could potentially become showstoppers. What is quite clear from today is that there is a huge amount of effort that goes in from all parties involved, to seek to try to maximise the benefits that are going to be achieved and minimise the disbenefits. However, actually, there needs to be at the same time those studies that look to see whether we are achieving what we expected to achieve and, if we not, how we need to change or vary that. It is recognising from the public sector side. Even though it was incredibly complicated from Islington Council’s perspective, the Council itself held the ring as the public service, so my role was to ensure that I worked closely with all the other public service bodies, understood what their requirements were and made it very clear to Arsenal what their requirements were. They would also be negotiating with those other public sector bodies. It is really important as a public sector that we are very clear on what we expect from any private developers. The more different departments of the public sector that are involved, the more it gets complicated and
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complex, and the more everybody wants to champion their own priorities. It is important that those priorities, from a public sector perspective, are clear to everyone from the outset. Ken Friar OBE (Director, Arsenal Football Club): Sarah is right. It would not happen unless you had someone driving the thing forward, but everybody has to be reasonable in their approach. Sarah was saying about what the public sector wants out of the football club. No one says what the football club wants out of what they are doing. I just feel that with all the negotiations there were - and there were more than 120 businesses that had to be acquired, 60 acres of land and all sorts of ownerships - we needed help in getting that together. Property developers since that time have said they think it is quite a miracle that it has been done in that period of time. Personally, I disagree with that because I have grown up in an industry and in an environment where you can make decisions. I as the managing director could make the decision. If it was too big for me, I would talk to the chairman. We would make the decision. If it was too big for both of us, we would call a board meeting at 10.00am and at 2.00pm we would decide and at 4.00pm we would implement, so things moved on very rapidly. However, the slow machine of local government was something that became quite difficult to deal with, because we were paying out money every single day with nothing coming in and people were saying, “We have an urgency committee. They will meet next September”. That was always the problem. We needed someone like Sarah - and I will say it in front of her - to drive it forward. She was tough but she did get things done. Without that, we would not be in the stadium, I am sure. Michelle Moore (Moore Development Consultancy): It is about how we can take the best football clubs and spread it all around and make better football clubs all around and so that affects the planning and delivery of future stadia. For me, I reiterate what Antony [Spencer] was saying. It is about the right people, it is about the right leadership and it is about those governance boards actually being held to account in a really meaningful way. That is really important. Just echoing Sarah’s point, the research on the social return on investment, and that kind of real need for empirical data and all those things that go with evaluating what has gone on in the past, is really critical; and must inform how we work in the future. We can get better at that and that needs to get better. Those governance boards need to be held to account in a much more rigorous way. Pete Bradshaw (Head of Infrastructure and CSR, Manchester City Football Club): Chairman, an awful lot has been said, really. The thing that is really important is the confidence that we can all have in each other. We are very lucky in Manchester to work with both Sir Howard Bernstein [Chief Executive, Manchester City Council] and Sir Richard Leese [Leader, Manchester City Council] in terms of drivers for the city and having a vision, as you mentioned earlier, for the city. What they have helped us do is steer through the mist, if you like, the red tape and the rules and the regulations that are absolutely vital. I came out of local government to work in football, so I have been on both sides of fence. To steer through some of that mist is really helpful when it is not your world, when you have to make quick decisions and when you
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are spending money and losing more because decisions are not being made. That has been really important and it has been part of the vision of the city to have transformational change. The other thing is that for football as an industry - and going back to Michelle’s [Moore] point, really - we need to share information more openly with each other, and not be frightened of talking about what we do that is both successful and sometimes not successful as a business and as an industry; and some joint working with local authorities. We can learn from each other and move on. We are not in many respects in competition with each other, so there is no reason why we should not do that. Things like today are incredibly refreshing and helpful. Gareth Bacon AM (Chairman): Thank you. Gabriel Ahlfeldt (Associate Professor of Urban Economics and Land Development, London School of Economics): I am an empirical economist. I am obsessed with estimating causal effects. Part of the reason I am so obsessed with estimating causal effects of things is that I think it enables you to do evidence-based policy-making. I am sitting on the Academic Panel of the What Works Centre for Local Economic Growth. We have some money to go and evaluate all kinds of policies to see what works and especially what does not work. We just did an evaluation of the existing research on the stadium and cultural facilities’ impact and I can tell you it is not enough. We need more research. We need more rigorous research. We need more research into the effects of stadium facilities not only on property prices but also school outcomes and the other outcomes. The data is out there. This can be done. It is not enough just to do these external appraisals to answer these questions of what is going to happen if you build a stadium. You need to look at past developments in a very rigorous sort of way and get a clear idea about what the causal effects of all these developments are on the important outcomes that we have discussed here today. Once we have this, then in the future we will be in a position to make better policies. Gareth Bacon AM (Chairman): Thank you very much. I am going to draw it to a close now. I thank the guests very much for their attendance and their contributions today. They were very much appreciated, indeed.
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