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SALFORD CITY REDS JOHN MERRY
 

Star date: 20th January 2011  Updated: 25th January

THE JOHN MERRY INTERVIEW: Part 3

THE £32.7MILLION PUBLIC FUNDED STADIUM AND THE WILLOWS LEGACY…

John Merry: "There's been no secret….we've been supporting the club for a while…" How much? JM: "Does it matter?" Yeah, come on…

Mention the cuts in Salford and two subjects always brought up are the Council's £20million BBC Philharmonic Orchestra grant and the £22million loan for the new stadium for Salford Reds, which will be almost 50% joint owned with Peel Holdings, one of the richest companies in the UK.

Here we question John Merry on the public funding of Salford Reds…


The John Merry Tapes: Part 3

SALFORD CITY REDS
The Background…

The new stadium for Salford City Reds rugby club has been shrouded in controversy and mystery since its inception, when a PR company was placing supportive letters in the Salford Advertiser about the move. For the Salford Star's history of the stadium see here and here and here.

Everything came to a head last year when Salford City Council jumped into bed with Peel Holdings to form a joint venture company, called The City of Salford Community Stadium Ltd. It was financed with a £22million loan to the company by Salford Council which in turn borrowed the money itself, despite Peel being one of the richest companies in the country.

Salford Council has also given land worth £6.7million towards the project, while the North West Development Agency (NWDA) has given a grant worth £4million for `land remediation'. And there's been hundreds of thousands of pounds of other Council funding for the club.

The project now consists of a `community stadium' with Salford Reds as the sole tenants, surrounded by lots of retail development. And, as the Reds kick off their final season at their current Willows ground in Weaste, the aim is to move into the new stadium in Barton for the 2011-12 season.

Meanwhile, controversy also surrounds the legacy at The Willows. Here, Salford Star editor, Stephen Kingston, questions Salford Council Leader John Merry on the whole mysterious subject…

Again, we've kept editing of the interview to a bare minimum.

"Our objective is to get them into the Super League…and also to make sure that they're viable tenants for the stadium as well, because if that club goes bust…" John Merry

Stephen Kingston (SK): I've asked Paul Walker [Salford Council's Director of Sustainable Regeneration and a board member of The City of Salford Community Stadium Ltd] about all this and he came back with a half arsed answer, so I questioned him some more and he didn't even reply… (*1)
John Merry (JM):
Do I think that the stadium is going to make money? Yes I do…
SK: I didn't ask that, give us a minute… You've given them land worth £6.7m, a £22m loan, and NWDA has given them £4m for land remediation. I can't do maths but that's over £30million quid, yeah?
JM: Right.
SK: The £22million loan is unsupported borrowing, or prudential borrowing, but Salford is now up to its peak of unsupported borrowing – is it £100m?
JM: Something quite high
SK: …which the Government was saying on the telly the other night – `Oh councils can always use their unsupported borrowing to get their way out of the recession…'
JM: Yea
SK: Yet you've got no slack at all
JM: No – that's perfectly true but can I just explain on the unsupported borrowing, right, we're expecting the stadium company to reimburse us for that unsupported borrowing, so they will be paying…

`You're assuming people are going to go and watch them…'

SK: You're assuming people are going to go and watch them…
JM: The site includes the Peel site, and they've got an awful lot of land around it for the possibility of retail and the like. All of that, we think, will make enough income for the stadium to support itself and to provide a return to the city council.
SK:  And if it doesn't? We're going through very dodgy times at the moment
JM: No I'm very confident that it does – we've done this before, remember we did the Quays on the basis
SK: What the Lowry Outlet Mall?
JM: No, not the Lowry Outlet Mall. What I'm talking about is the actual concept of the Quays in the first place was for the Council to buy the land and to re-develop it and make a profit on it, which we did.
SK: Yea but in terms of retail
JM: We've got significant levels of retail interests already involved. Now you can say about Peel all you like but they are actually good at managing retail and actually attracting new retail opportunities. And the whole point of the company is it will pay a good return to the Council on the money advanced to it. So I think we'll make money on the deal.
SK: So you don't think it's a gamble?
JM: No
SK: No?
JM: Well, when you say is it a gamble - only in the sense that it's right for the City Council to be working to provide a facility and to see if we can make a return on it. There's no such thing as a cast iron certainty with any of these deals but I think it's a pretty good bet.
SK: And the company itself?
JM: It's a joint venture company, not Salford Reds, and I'm a member of the board…
SK: Can you tell me then please who owns the other third of the shares? The Council seems to own 51% of the company and Peel 49% but then there's these `preferential shares' in the middle…
JM: Well the preferential shares as far as I know are not owned by a single investor, but I can get you the answer on that. I think it's basically a deal between us and Peel
SK: There's no third party?
JM: Not that I'm aware of.
SK: There was a covenant on the land wasn't there? (see here)
JM: Right, well again, I'll find out (*2) but there's never been anyone else attending board meetings apart from myself and Peel.
SK: And no-one else has got a stake in it?
JM: Not that I'm aware
SK: Well you must be aware of it, you're the chairman
JM: I know. I suspect that the preferential shares might actually be owned by one of us. OK let's find out… (*3)

THE WILLOWS

`I've got this report that talks about the Council's "possible acquisition of land at Willows Road/Kennedy Road"'…

SK: Ages ago I asked `Is the Council interested in buying the Willows?'
JM: No we're not interested in buying The Willows but we will be a partner in terms of redeveloping that site.
SK: Partner with who?
JM: Partner with the bit that Salford Reds own basically.
SK: What is Godliman Watson Home's [founded by Salford Reds Director Iain Watson, which bought the Willows land from owner John Wilkinson with, we understand, a part loan from John Wilkinson] involvement on that site?
JM: You'll have to ask Watson. The fact remains that, yes, we do own some of the land around there – things like the car park.
SK: So you're going to be joint developers of that land?
JM: Yep
SK: What for?
JM: Housing probably
SK: Affordable housing?
JM: Well I'd like to see affordable housing on there but we'll have to see what return we can get in terms of the actual site.
SK: I've got this report that talks about the Council's "possible acquisition of land at Willows Road/Kennedy Road" and this that talks about "Willows Road leasehold acquisition and grant of development agreement"…
JM: Where's that from?
SK: Well it is a Council report, you should know…
JM: Well there was an issue about acquisition of freeholds around there. What we're trying to do is to package the land up so that when the Reds do vacate the land we can agree on a development to take place on that land.

SK: People are worried about profiteering by Salford Reds directors
JM: OK so you're not accusing the Council of profiteering, you're accusing the Reds directors?
SK: We're not accusing anyone…I've got to get my head around this but the land sold by Wilkinson to Watson…
JM: Yeah
SK: …with money borrowed from Wilkinson, which is really odd. And then the Council goes and buys it and he makes a profit – that's not right is it?
JM: No it wouldn't be right if that was the case
SK: I don't know, that's why I'm asking you.
JM: Right, ok, I don't think there was any profiteering by the directors. I think what the club's agreeing, is to develop the land to provide them with some resources. And as you know we've shown a commitment to the Reds as well and we want to make sure that we get a return on our money as well.
SK: What kind of commitment?
JM: There's been no secret. I think you've published it on your website anyway (*4), we've been supporting the club for a while.
SK: How much?
JM: Does it matter?
SK: Yeah, come on…
JM: I'm not going to be specific at the moment because we're …our objective is two things here…Our objective is to get them into the Super League to make sure that their franchise is renewed because it's incredibly important. So we've got to make sure that we develop a level of support to ensure that happens. And also to make sure that they're viable tenants for the stadium as well because if that club goes bust…I was going to say it was the only professional sports club in Salford but that's not quite true is it …
SK: No, there's Salford City Football Club that don't get a penny…
JM: But the Reds are the only ones playing at the top level. The point is that a lot of people, not just the people who attend, get a great deal of pleasure from the Reds and we've got to try and make sure of its survival…


*1. The Salford Star asked the Council way back in November `What interest is Salford Council paying on the £22m loan? And when is it expected to be paid back? Is Salford Council itself actually running and staffing the stadium?'
 
Paul Walker, Director for Sustainable Development replied on behalf of the joint venture company:

"The joint venture company fully acknowledges the grant assistance from the NWDA which has enabled the reclamation of the site, along with the loan from the Council which has enabled the provision of the Community Stadium itself, where construction has already started. But it is a loan and the company will service that loan in the usual way.
 
"Moreover, the company is absolutely delighted that Salford City Reds have decided to make the City of Salford Community Stadium its new home, and they will obviously pay the Joint Venture Company an appropriate sum to use the new facilities. However, as I'm sure you will understand this is a commercial arrangement between the company and the Reds and it is therefore not felt to be appropriate to say what its financial terms are.
 
"But the really key point here is that this is a community stadium and its facilities will be able to be used at reasonable prices by a wide range of community groups for all sorts of purposes; so this is a Stadium for everyone, and everyone will be very welcome to use it. In addition to that the Community Stadium will be another attraction for visitors and tourists, which will help to not only make Salford an even more attractive and vibrant place, but will also boost the local economy.
 
The Salford Star replied that he hadn't answered the question… "It's incredibly appropriate to know what the financial terms are with Salford Reds - if the tax payers of Salford are making this happen for the rugby team then surely we are entitled to know their financial commitment. Can you also tell us what the "reasonable prices" are that the community will be expected to pay to use the facilities?"  
Paul Walker never replied.

*2 and *3: The Council finally replied to these questions on 11th January…
"The Joint Venture Company shareholders are Peel and the Council, who have equal Board Directors and shares. The Council won't be staffing the stadium."

*4: £350,000 at the last count – see herebut we understand it's a hell of a lot more!

Stop Press: 25th January 2011

Yesterday Salford Council approved the surrender of the lease for the Willows Car park and officially entered into a devlopment agreement with Godliman Watson Homes Ltd. The reasons given were "to better secure the repayment of loans made by the City Council to the Salford City Reds Rugby Club and to provide a return to the council for their financial support of the club".

The full decision reads: "I, Councillor David Lancaster, Lead Member for Property in exercise of the powers conferred on me by Paragraph J, (k)(1) of the Scheme of Delegation of the Council do hereby approve the Surrender of the lease of the Willows Road Car Park, Willows Road, Weaste from The Willows Variety Centre Limited and entering into a development agreement, including a contract for sale and profit share arrangement with Godliman Watson Homes Limited (GWH Limited) in respect of the Willows Rugby Ground and the Willows Road Car Park with the City Solicitor completing all necessary legal formalities."


*  John Merry Interview Part 1 - A Tale of Two Cities: Salford 2011 click here

* John Merry Interview Part 2 - The Tesco Affair click here

Ammie wrote
at 15:41:48 on 19 July 2012
Salford City FC football club is not a f*cking amateur club you moronic goose - it's semi pro and equally worthy. What makes you think that everyone should like rugby? It's not the national sport of Salford!
 
Neil Parkin wrote
at 15:23:34 on 19 July 2012
Salford City SOCCER club are fucking amateur you moronic goose! Salford City Reds are a FULLY PRO RUGBY LEAGUE outfit!! If all the moaners here got of their fat cavy arses and attended games then the REDS wouldnt have to beg, borrow etc!!!
 
Neil Parkin wrote
at 15:23:24 on 19 July 2012
Be a DIFFERENT STORY if it was Manchestert United about to go under!! Every fecking two faced Salfordian would have no issues, but because its Salford City Reds, the apathy in this city is a DISGRACE!!
 
alan bainbridge wrote
at 15:27:41 on 31 January 2011
They Are trying to build a Biomass next door.Maybe it should be instead
 
SKINT Salford resident wrote
at 08:29:51 on 30 January 2011
The council did not surrender the lease on the car park, they paid SALFORD REDS OVER TWO HUNDRED THOUSAND POUNDS for the lease. If the council had waited till they move to the Community Stadium they could have got it back for peanuts. So how much has Mr Wilkinson had from the people of Salford so far. over 3 quarters of a MILLION,plus we build a stadium, another 22 MILLION and guess what they get it rent FREE till they get gates of over 4000.
 
mary ferrer wrote
at 08:34:56 on 22 January 2011
First, if they can't pay their way now at the Willows how the hell are they going to pay the rent on the new COMMUNITY Stadium. We the residents are paying the running costs at the moment, something like £75.000 so far in loans. Are they going to pay any rent when they move, because I am sure that any community group wanting to use the BIT of community space,will be billed for it. Do they need a 15000 seat stadium, they get about 3500 supportes at the Willows.What is going to change with this move??? Do we know what has happened to the proposed hotel in Buile Hill Park, the planning permission will run out in May/June of this year. Wilkinson hasn't done any of the things he said, his Rep at the planning panel told them work would start that summer. The panel were told that something had to be done to the Mansion a.s.a.p.before it decayed any further,three years later and nothing done. All lies. I wish I knew what connection Wilkinson and Peel have with this council,because the council are bending over backwards for these people, with little or no consideration to the residents of Salford.
 
grumpy but right wrote
at 08:32:07 on 22 January 2011
The park should not be sold off by stealth and the site by the Ship canal should be devloped for docking facilities for the renascent shipping trade on the ship canal. close as ot is to the aerodrome then at least the navy can quickly dispatch a gun boat or two to deal with all the pirates infesting salfords shores ....pass me me rum....and another thing your security letters are getting unreadable!
 
Alli wrote
at 17:04:23 on 21 January 2011
The Buile hill mining museum was an excellent educational resource, all Salford school kids had visited at one time or another and learned of one of our former industries in Salford. Such listed buildings have to be unused for 6 years before it can be developed. What a coincidence that this resource was closed 6 years before Wilkinson got it for a song. As a local resident 100 yards from the park we wasnt consulted and in fact did not know anything until the day it went to planning.Wilkinsons paid entourage talked how the park was filthy, crime ridden and full of discarded drug equipment, hypodermics kept being mentioned. I was incredulous as his team continued to say they had looked at other sites and they werent suitable. Dont do it then I said. When I asked then about where the children of Salford could play after SCC had reversed its policy on housing children in high rise flats, I just got blank looks. This project would see an enormous part of the park barred to the public. I know John Merry is a reader of this site so please can you respond to my observations.
 
Brian Francis Kirkham wrote
at 14:43:44 on 21 January 2011
A more obvious question to ask is this .. In a time when Dear old Salford Reds are moving to Eccles, why is the chair of said rugby club going hell for leather in his bid to turn a public park near to the old stadium into a private concern/country estate? The two actions are completely poles apart! - Anyone saying the plans on the table don't impact on public use of the park is kidding themselves.
 
VanPercy wrote
at 14:43:20 on 21 January 2011
I don't think you all fully understand. Why shouldn't the council support the Rugby team?? A council can invest money, not just spend it on public services, look at Manchester International Airport for example. Ok SK, one for, Salford City FC is not a professional sports club, you should know better seeing as you watch them. Semi Pro. I think the new stadium will put Salford "on the map" so to speak and will be good for the City as a whole. Just a shame the willows couldn't have been redeveloped to bring it up to date. I would, however, like to see the council do more to help the City's Semi Pro football club now as i think it's about time they showed some support for the football club.
 
It beggars belief.....!!!! FRAUD !!!! wrote
at 07:15:28 on 21 January 2011
Salford Council supports the local rugby club. I might be a daft question but isn't the function of the council to maintain the local highways & pavements, empty the bins, manage public libraries et but investing in the local rugby team isn't this really just going too far? If the ilk of John Merry think that Salford Reds Rugby Team is such a good investment let them to use their own money and not that of salford council. The connection of Salford councilto John Wilkninson needs to be looked at by the audit commission http://www.audit-commission.gov.uk but i wouldn't expect much the audit commission itself is questionable and seems to airbrush salford council urban renewal. So it looks like the Salford Star is alone in these dark hours. A majority of people in Salford would agree that selling the building in Buile Hill Park to John Wlkinson looks like open fraud.
 
Gobsmacked !!! wrote
at 20:15:18 on 20 January 2011
This stinks to high heaven, why are the national press not on top of this , talk about Dodge City !!!!
 
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