The Mail Bag
Everton to borrow additional money to pay stadium over-run costs
Comments (8)
Finally, an answer to an imporant question which should have, but has not, been covered in the ballot document and other statements by the club.
When asked by the Shareholders Assocation about over-run costs, Wyness gave this answer:
2) Many stadium projects end up costing more than originally envisaged.
a) If the stadium at Kirkby goes over-budget, who will pay the extra costs?
b) Would we be expected to contribute towards any over-run?
c) If so, what percentage of the over-run?
KW: It depends what the cost overruns are for. If we were to upgrade parts of the plan or decide on changes then we would pay for those. If it is due to inflation we expect to share such an increase in an equitable way with our partners. There is no doubt that cost overruns may happen and we still have enough flexibility in our ability to secure further debt to cover that eventuality.
So, if you believe the stadium will be brought in on budget, you can possibly believe the figures quoted about Everton's contribution, be that £10M or £50M, or somewhere in between.
However, if you think the stadium is likely to over-run (and which major project doesn't), then the figures quoted so far are nonsense, and our borrowings will be much higher.
This is something that should have been transparent from the start.
"Deal of the Century" anyone?
David Thompson, Posted 02/08/2007 at 09:48:48
Comments
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2 Posted 02/08/2007 at 14:22:14
3 Posted 02/08/2007 at 14:23:59
I keep reading a lot of posts on Toffeeweb saying that, because of possible over-runs, unforeseen events etc. etc., the Kirkby deal may not be as financially attractive as it seems.
But all these arguments apply AT LEAST AS MUCH TO ANY OTHER OPTION!! In face, given that we know on the Kirkby option that at least any over-runs will be shared (we have no idea what the situation would be on other options), this is actually another reason to favour Kirkby.
Of course, since there aren’t any other funded options in existence, David’s argument is both wrong and irrelevant.
4 Posted 02/08/2007 at 14:42:09
How can my argument be wrong and irrelevant?
You are being asked to vote upon a move to new stadium at Kirkby, which, according to the club, will require an input of £50M. How that £50M is acheived depends on the sale of Goodison, and the sale of naming, rights, which, we are told, could raise "up to £40m", leaving the club to borrow £10M. The so-called "deal of the century".
There are plenty of people arguing that the deal is so good, how can it be turned down. It will contribute £10M per year to the team.
I make no reference to any other stadium, and only question what has been presented by the club.
Wyness has now said that figure does not include over-run costs, and that Everton would be liable for all, or some, depending on how they were incurred.
Now, let me ask you this. Do you think this stadium, if it is built, will be brought in on budget?
If your answer is no, then you have no idea how much money the club might have to borrow to finish it. How will that affect the transfer money for the team?
Even Wembley did a "fixed cost" deal - thank God they did as they would have gone £150M over budget and it nearly bankrupted the builder.
Why haven’t Everton done the same, and can you seriously vote yes for a proposal that has an open cheque book?
5 Posted 02/08/2007 at 15:00:19
6 Posted 02/08/2007 at 15:11:38
Implicit in the vote is a consideration of other options. People are basically voting on whether to move ahead with this, or wait around until something else feasible comes along. By saying ’no’ you are stating that you think the other (untested) options are more attractive.
Do you really think that demolishing the Park End and rebuilding it in a summer or building on top of the tunnel entrance in a space that barely holds a stadium are a)possible and b) more likely to come in on budget.
Also, consider the people behind the projects, on the one hand Tesco and their team who complete multiple large property development deals a year and deliver mostly on time and within budget, or a quickly assembled team of local architects who were asked to put together a a mini-model of a new goodison because they were cheap and available.
And as for Wembley, the reason they were able to do a fixed cost deal was that they had the money available to build the stadium and used a competitive bidding process, unlike us to are scrounging around to find anyone with a bit of cash to help us out.
7 Posted 02/08/2007 at 17:29:08
DO you think the stadium will come in on budget?
If not, all of the figures you have been given by the club, such as they are, are wrong, but you’re being asking to vote on it.
I’m asking how anyone can vote in those circumstances. The question on the ballot is "based on the above information, are you in favour of relocating the club to Kirkby?" It’s nothing to do with the Park End, or the tunnel loop.
If the information is incorrect, how can you vote yes?
Of course, if you think it will be on budget, and are then prepared to accept the figures quoted at face value, you can make an "informed" decision.
Fact is, Goodison may nnot be great, but it’s not falling down. This is being presented as the only option, but it’s one that could ruin the club.
8 Posted 03/08/2007 at 00:08:27
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1 Posted 02/08/2007 at 14:22:20