City of Salford Community Stadium Limited (A J Bell Stadium) 2015/16 Report to Council from the Deputy City Mayor, David Lancaster and Mark Reeves, Deputy Director of Environment and Community Safety

1. Background

The A J Bell Stadium has been open for business since late 2011and is a significant part of the overall regeneration and development of the 17 hectares of land now known as ‘Salford Gateway’ adjacent to the Ship Canal and A57 Liverpool Road. Alongside the WGIS road scheme and Port Salford, the area, its connectivity and overall development is rapidly moving forward with the first sale of land to Greene King having taken place and more to follow in 2016 and subsequent years.

Future developments could include small food retail, car showrooms, fuel filling stations, major retailers, fast food and a hotel.

The WGIS road will be open in the summer of 2016 including a new bridge across the Manchester Ship Canal providing a vital link to the Trafford Centre and Chill Factore. The bridge deck is now installed. Port Salford is in development and the Culina warehouse almost complete. It will along with other developments at the Stadium site provide several thousand new jobs in the area.

The A J Bell Stadium comprises:

 A total of almost 2,000m2 of meeting and hospitality space.  A 700 capacity suite capable of coping with events as diverse as major corporate uses, exhibitions and private and community meetings.  13 syndicate rooms which can be used as hospitality boxes on match days, overlooking the main pitch.  A commercial gym.  Home to the Club and Sale Sharks Rugby Union 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 a newly floodlit outdoor grass pitch with availability for rugby, football and American football matches.

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 operation of the Stadium has moved according to its financial plan towards sustainability.

1 The Stadium is also very much part of the wider and significant leisure offer that the 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 11,500 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 the ownership of Dr Marwan Koukash. Within its first year, the Stadium also recruited Sale Sharks, the Aviva Premiership Rugby Union team as its second anchor tenant making it the home of top class rugby in the northwest. During the last year, approximately 40 first class fixtures have been held at the Stadium including a football match for AFC Fylde and a rugby league championship match for Swinton Lions. In October 2015, the venue has also hosted the England Rugby Union World Cup 2015 squad for training prior to their world cup match at the Etihad Stadium.

The Stadium is also home to the Manchester Titans, the American Football team, hosted the Rugby League Varsity match between Salford and Manchester Universities and accommodated two top Australian NRL rugby league sides, Brisbane Broncos and North Queensland Cowboys for training as part of the World Club Challenge in early 2016. Looking forward, the Stadium is hosting the final and tournament of the Junior Rugby Union World Cup in 2016 in conjunction with the Manchester City Academy and a third visit of the Rugby Union U17 Finals also held at the Stadium in both 2014 and 2015.

The Stadium has Yourgym as one of its key anchor tenants which is 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 event and conferencing business has continued to perform well 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 that end and in partnership with Elior Azure, the Stadium’s catering partner, a new position of Stadia Sales Director has been recruited coupled with a refocusing of the Stadium’s Sales Manager role on to the local market.

The Stadium Operation’s 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.

2 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. Over the last year the sales team has forged close links with Marketing Manchester to allow for greater access and support for bringing corporate events to the Stadium.

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 the last year there were over 400 different events involving around 35,000 delegates. There have been blue chip companies such as the Cooperative, the Automobile Association and Edward Mellor Auctions that have held major events at the Stadium. In addition, there have been many different conferences, birthday parties, school proms, funeral wakes, weddings, awards dinners, Christmas events and those held for charity. Indeed approximately 75% of the last year’s business has come from within a 10 mile radius of the Stadium demonstrating its local focus and popularity. The first Salford Carnival was held at the Stadium in June 2015.

There have been many dinners held at the Stadium ranging from the Salford Business Awards 2013, 2014, 2015 and soon to be 2016, and the Bill Beaumont sportsman’s dinner. In addition, the Stadium has been used for many training events, exams, meetings of every kind and from every industry sector. It has also hosted several weddings and several filming events involving blue chip sports companies and top flight international sports stars.

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 tangible plans in place to hold concerts at the Stadium in 2017 and new events such as comedy nights, boxing matches and a drive-in cinema 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. It hosts the ‘Friends of A J Bell Stadium’ group which is well attended by local residents, tenants, the two clubs and representatives from fans groups and the Stadium team and its partners. It is through this group that a volunteering strategy will be developed and integrated into the overall operation of the stadium.

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

3 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. Similarly, Sale Sharks utilise the Stadium’s facilities for a variety of school based educational sessions which expands both their and the Stadium’s reach into local communities.

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- 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.

Approximately 400 individual bookings are made each year for the community pitches and this level is rising. These include local sports clubs and individuals / groups just wishing to play sports with friends.

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. The first plot of land (1.3 acres) was been sold to Greene King for the development of a pub/restaurant called the Barley Farm. The new pub has generated approximately 90 jobs.

Port Salford is under construction further down the A57 which will generate 3,000 job 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 has seen a new road layout and approach to the Stadium which will open in the summer of 2016 and will extend over the Manchester Ship Canal to the Trafford Centre complex. The Culina distribution company will see its warehouse open in spring 2016, forming the first tranche of the Port Salford development.

The Stadium has a two year plan to identify end users for the various development sites at the Stadium. Potential users will include budget retailers, fast food outlets, petrol filling stations, car showrooms and large ‘shed’ style retailers. Other uses may also include a hotel.

The breadth of eventual users will provide for an exciting mix of uses at the site and provide for several thousand new jobs in the area.

5. Stadium Financing

4 The Council has made loans to the stadium totalling £24.833m to 31st March 2016. This comprised an original £22m of development and working capital loans in 2012/13, and ongoing working capital loans totalling £2.833m between 2012/13 and 2015/16. 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 2022. 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 four years, this has brought an extra £1,040,000 (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 2016 is £23.2m. 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 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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