City of Community Stadium Limited (A J Bell Stadium) Report to Council from the Deputy City Mayor, David Lancaster and Mark Reeves, Deputy Director of Environment and Community Safety

1. Background

The Stadium was constructed under a joint venture partnership arrangement between Salford City Council and Peel Holdings under the title, the Community Stadium. Both shareholders put together property assets with a value in the region of £12m to facilitate an amenity which was viewed as contributing to the development and regeneration of land which has ‘not been used’ for many years and which adjacent to the Western Gateway Infrastructure Scheme (WGIS), an important infrastructure project to bypass Peel Green and promote better connectivity to the M60 via the A57. WGIS had been under consideration for several years without the scheme progressing and now enables progress with , a major multi- modal development capitalising on the proximity to the , northwest motorway network and the Liverpool – Manchester railway. Port Salford is planned to be a key economic generator providing significant employment.

The Stadium Company owns 17 hectares of development land surrounding the A J Bell Stadium for which consents exist for a variety of purposes. The recent progress with WGIS should enable interested parties to visualise the benefits and opportunities of the adjacent land areas. In the light of the anticipated Port Salford and Stadium land developments, important consideration was also given to community facilities which would complement the expected commercial activities.

The venue now known as the A J Bell Stadium comprises:

 A total of almost 2,000m2 of meeting and hospitality space.  A 700 capacity facility capable of coping with events as diverse as major corporate uses, examinations and private and community meetings.  12 syndicate rooms which can be used as hospitality boxes on match days, overlooking the main pitch.  A commercial gym.  Home to the Club and Aviva Premiership club.  A Foundation charity related to the Salford Red Devils Super League Club.

As well as the main Stadium pitch, there are two other facilities; a 3G all weather floodlit sports surface with high usage from professional and amateur teams from a wide range of sports and an outdoor grass pitch with availability for rugby, football and American football matches.

The joint venture partnership is 50:50 in nature. The joint venture company needed to source funds to construct the stadium. The Council originally borrowed the funds as it was able to borrow at more competitive rates than its partner. The Stadium Company

1 makes regular payments back to the Council as part of the agreement. It is through the capital receipts received through the sale and subsequent development of the land that will repay the Council’s original development and working capital loans. Excitingly, the first area of land has now been sold to Greene King for the development of a pub/restaurant subject to planning and licensing consent. The capital receipt received is well ahead of expectation. Construction work should begin during 2014.

The requirement to financially support the operation of the Stadium by the two partners has significantly reduced during 2014. In addition to the capital receipt received from Greene King, the naming rights to the Stadium were sold to Sale Sharks as part of their commercial agreement. Sale Sharks subsequently brought A J Bell on board as the naming rights partner in late 2013. A J Bell is a based finance and investment company with a burgeoning development in sports related sponsorship and marketing. They provide the ideal partner for both Sale Sharks and the Stadium to move forward in the next stages of their development and the Stadium is proud to be associated with them. Income is regularly coming into the Stadium Company from the naming rights sale.

The significant growth in the non-sporting business and in particular, conferences and events, has helped drive forward the Stadium’s business plan. Taken together with the sale of the development land and the income from the naming rights, the requirement for the Council and Peel Holdings to continue to invest funds into the operation of the Stadium has vastly reduced pushing the Stadium a long way down the road to complete sustainability.

The Stadium is also very much part of the wider and significant leisure offer that the City of Salford provides to its people, businesses and communities and is therefore seen as a valuable asset in that context.

2. Stadium facts and offer

2.1. Sporting

The Stadium has a capacity of just under 11,384 spectators accommodated in 4 stands with the opportunity to increase the capacity to approximately 20,000 in the future should the need arise.

When the Stadium first opened, it was home to the Salford Red Devils, the Rugby League Super League team, now under an exciting and major resurgence under the ownership of Dr Marwan Koukash. Within its first year, the Stadium also recruited Sale Sharks, the Aviva Union team as its second anchor tenant making it the home of top class rugby in the northwest. Sale Sharks also qualified for European competition in 2014. Excitingly and in early 2013, the Stadium reached agreement with Manchester United for its Under 21 Premiership team to play the majority of its home matches at the Stadium, the first season of which was in 2013/14. Approximately 45 first class fixtures are played on the main pitch each year.

2 The Stadium also has two secondary pitches adjacent to the main facility. One is a grass pitch that is now compliant with Rugby League Academy level which the Salford Red Devils Academy team use to play their matches on and the second is a floodlit 3G ‘astroturf’ pitch that is predominantly used for community purposes. Several soccer leagues use the pitch for their competitions. The Salford Red Devils also use the second grass pitch to train on following the move of their training set up from . In 2013, a new gym was constructed in the south stand purposely for the Salford Red Devils to use for training. This was paid for by the Club.

The Stadium is also home to the Manchester Titans, the American Football team and is soon to be the venue for Salford City FC’s training.

The Stadium has also hosted marquee events such as the Rugby League semi final between Wolves and the in July 2012, the women's Euro 2013 qualifying match against the Netherlands in June 2012 – televised live, the Rugby League International between England and France in November 2012, the double header Rugby League World Cup 2013 warm up matches between and Samoa and England versus Italy in October 2013 and the Rugby League World Cup 2013 fixture between Scotland and the USA in November 2013. Forthcoming events include the International Rugby Sevens in September 2014 and the Stadium, Marriot Hotel and Irlam and Cadishead Fit City jointly being used by the full England 2015 World Cup squad in October 2015. In addition, the Stadium has hosted for the past two years, the Rugby League Varsity match between Salford and Manchester Universities and accommodated the Australian Rugby League World Cup 2013 squad for training immediately before the World Cup Final in November 2013. The Stadium will also host the final and tournament of the Junior Rugby Union World Cup in 2016 in conjunction with Broughton Park in Manchester.

The Stadium has attracted as a tenant, Yourgym, a commercial gym located within the Stadium’s west stand; it offers quality gym facilities at very competitive rates and is regularly used by several thousand members.

2.2. Non-sporting

The Stadium business started from scratch and has continued to grow rapidly both in the number and quality of events. It is a significant employer both in the local and regional area. The objectives of the Stadium Company are aimed at growing the non- match day income to the point where the Stadium does not need any further financial support.

The Stadium Operations Team numbers 26 including casual staff. The vast majority of these live in the local area. The Stadium has significant conferencing, banqueting and event facilities located in the main west stand. A range of events can be accommodated ranging from 1 person through to 700 on the second and third floors. In addition, there is the Fans Bar on the ground floor that can accommodate up to 250 people. This makes it one of the premier and largest event venues in the northwest. The Stadium benefits from its unique accessible location and car parking for up to 600 cars.

3 The Stadium’s catering and events contractor is Azure, part of the Elior Group. It employs a core conferencing and banqueting team of 9 on site with a further 200 casuals brought in as events dictate and a business development team of three to drive forward future business. The vast majority of these staff live in Salford and its immediate environs.

Business has grown since the Stadium opened. In its first year there were 171 different events. This rose to 215 in its second year. To illustrate the diverse nature of events that have and can be accommodated at the Stadium, there have been blue chip companies such as Heineken and Sainsbury’s that have held major conferences at the Stadium. The UK Space Agency has held two events at the Stadium showcasing some of the latest space activities taking place in conjunction with NASA. Both events were focussed particularly at school children. In addition, there have been many different conferences, birthday parties, weddings, awards dinners, Christmas events and those held for charity.

There have been many dinners held at the Stadium ranging from the Salford Business Awards 2013 and 2014, the annual Irlam Boxing Academy awards dinner and the Shacklady’s Gym annual dinner. In addition, the Stadium has been used for many training events, exams, meetings of every kind and from every industry sector and community meetings such as the Irlam and Cadishead Community Committee. It has also hosted several weddings including Muslim and it is likely that its first Hindu and Jewish weddings will take place in the near future.

To deliver these events requires a significant supply chain, much of which is locally sourced. Significant six figure expenditure is spent each year with businesses, many of which are SMEs which helps drive forward the local and regional economy.

The Stadium is ambitious and has exciting plans in place to hold concerts and festivals at the Stadium within the next 12 months to further complement and expand its business plan.

3. Community

The Stadium was constructed always with the local community in mind. It provides a valuable local asset and employer for the local area.

The Salford Red Devils Foundation is based at the Stadium. They are the community arm of the Club and undertake significant community based work throughout the City of Salford and the region as a whole. They use the sport of rugby league as a vehicle for delivering important programmes relating to public health and skills and work such as smoking cessation, tackling obesity and bringing people into employment.

The Stadium also has the two secondary pitches at its disposal which it utilises both commercially and for community and charity use. These are used by both the Salford Red Devils and Sale Sharks on match days to hold mini rugby festivals involving local and regional schools and discounted rates are given to charities for their event use. Over the course of a year, approximately 2,000 children are involved in pre-

4 match events at the Stadium, not to mention the many thousands more involved in community events, soccer leagues and charity runs held at the venue.

Examples of charitable events that have taken place at the Stadium include a car boot sale organised by Real Radio and a charity football match organised by the One Goal Foundation in which footballer’s wives played against former professional footballers. An exciting event in 2014 saw the ‘Salford School Run’ take place at the Stadium. For all ages from aged 7 upwards, the children ran a route around the Stadium with , the Salford Red Devils Captain firing the starting gun!

Approximately 400 individual bookings are made each year for the community pitches and this level is rising. Additional facilities are being explored including an additional pitch and floodlighting on all of the pitches.

4. Development Land

The Stadium is surrounded by prime development land which belongs to the Stadium Company. It totals just over 17 hectares and makes it one of the prime development sites in Salford. Values of land have been increasing of late but a better perspective on the land values will be set once the first site is sold.

Port Salford is also under construction further down the A57 which will generate significant employment opportunities and economic growth for the region. As part of this construction, the A57 road immediately adjacent to and feeding the Stadium is being modified under the Western Gateway Infrastructure Scheme. This will realise a new road layout and approach to the Stadium by the summer of 2014, providing much better access for all users of the Stadium.

Significantly, the first tranche of land has just been sold. It comprises 1.3 acres and a capital receipt well ahead of expectation will be received. The purchaser is Greene King who will construct a pub/restaurant on the site subject to the usual planning and licensing consents. This exciting development will complement the facilities at the Stadium and will act as a catalyst for further land sales and development such that, over the next few years, the whole site will be developed out, which will further enhance the business of the stadium and boost the economy of the area.

5. Stadium Financing

The Council has made loans to the stadium totalling £23.75m to 31st March 2014. This comprised an original £22m of development and working capital loans over the three years to 2012/13, and ongoing working capital loans totalling £1.75m in 2012/13 and 2013/14. Peel Holdings has exactly matched the working capital loans with loans of its own. The development loans and the original working capital loan are repayable over a 25 year term, whilst other working capital loans from the Council and Peel Holdings are repayable by 2018. The Council lends to the stadium at a commercial rate of interest (5.16%) but is able to use its size and position to borrow the money for this purpose, on much more favourable terms. Over the past

5 two years, this has brought an extra £440,000 (a conservative estimate) into the Council’s separate revenue account.

The stadium has made its scheduled repayments to the Council fully in accordance with the terms of the loans. The balance of principal outstanding loan as at 31st March 2014 has now reduced to £22.97million. This is typical for a loan arrangement of this kind. Like a home mortgage, the development loan will steadily reduce over time, with more of the principal paid off towards the end of the term and as the development land (currently valued at £25m) is sold.

6. Summary

Future development will bring both major capital receipts for the Stadium Company and the City Council will benefit from additional business rates and council tax payments.

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