Selling Carrow Road

[a1canary 0]

Even just writing this in the post title fill me with dismay.

Am I being melodramatic? What are the pros and cons of doing this?

We get a big wad of capital with which to pay down our debts, while we then rent the ground for what would probably be the equivalent of the debt interest repayments. So what''s the point? Other than ensuring that we are forever ''renting'' and carrying the cost of that.

I guess it depends on how the ''rent'' would measure up against the debt interest repayments. Does anyone know what the rent level might be? What do Leeds pay? Binners?

And another thing, who would buy it? Investors looking for a reliable return i guess? But i thought it was the respective council''s that own Leeds and Binland?

[a1canary 0]

This is a very interesting reference point in relation to Binland. And quite amusing.

Clegg: Town''s Debt Will Continue to Grow

http://www.twtd.co.uk/news.php?storyid=15733

It makes the reason for Evans getting involved with them even more puzzling than it was at the beginning. It basically says:

Our debts are £35m but who cares, we''ll keep investing in the club (inc new pitch, new stand!!!) and Evans will keep paying for it until we''re in the Prem.

Why would he do that when he''s not even a fan? And i love the dumb idiot binner comment at the end that says:

"To me it sounds as if the club are in safe hands, well done cleggs and evans long term plan in place, i see a very bright future for town"

Hilarious! How does he work that out:

"Clegg says the manner in which the club’s debt would be reduced once Town are in the Premier League is yet to be set out: “I have to say we’ve not laid that down in terms of how that would happen."

As well as £10m more debt than us they don''t own their stadium either. So i suppose if we sold CR we''d at least have our debts much reduced.

[Lord Horn 0]

Just spotted this in the EDP-

Mr Bowkett drew on the example of Ebbsfleet United, where the local council recently bought its ground and is renting it back to the football club for a peppercorn rent.

Ebbsfleet United''s Stonebridge Road ground was snapped up by Gravesham Borough Council last September to secure the Conference National team''s future.

The council, which paid £400,000 for the ground, will give the club a longer lease and charge just £1 a year.

There is a big difference here between the Fleet and City - for one thing EUFC didn''t own their own ground anyway and were renting from a private landlord.  The landlord gave EUFC 60 days to get together £500,000 to secure the ground and within a very short period supporters and owners of EUFC mustered about £280,000.  It was evident that the target wouldn''t be reached and the Borough Council stepped in and are now renting the ground to the Fleet for a £1 a year for a guaranteed 50 year tenure.  You will all obviously have spotted the major difference i.e. the difference in value between Stonebridge Road (£500,000) and Carrow Road (£34.5million) - very unlikely that given the state of the public purse that any Council (or group of Councils) would be interested in buying FCR.

[canary cherub 1]

I can''t believe what I''m reading.  Bowkett comparing Ebbsfleet with Norwich is like Neil Doncaster comparing Norwich with Gretna . . . are we absolutely sure he''s left the building? [:D]

 

[canary cherub 1]

[quote user="a1canary"]Even just writing this in the post title fill me with dismay. Am I being melodramatic? What are the pros and cons of doing this? We get a big wad of capital with which to pay down our debts, while we then rent the ground for what would probably be the equivalent of the debt interest repayments. So what''s the point? Other than ensuring that we are forever ''renting'' and carrying the cost of that. I guess it depends on how the ''rent'' would measure up against the debt interest repayments. Does anyone know what the rent level might be? What do Leeds pay? Binners? And another thing, who would buy it? Investors looking for a reliable return i guess? But i thought it was the respective council''s that own Leeds and Binland?[/quote]

You''re not being melodramatic, your instinct is based on common sense.  Just because the board tell us it''s a good idea, it doesn''t mean that it is.  Remember when we trebled our debt overnight in 2003 by borrowing £15m? . . . "the debt is high but manageable" the shareholders were told in the Annual Report.  Clearly it wasn''t or we wouldn''t be in this mess now. 

Selling the ground would be one of the most momentous decisions the club has ever taken, because it''s irrevocable.  If we lose ownership of Carrow Road we''ll never get it back, not ever, never. 

 

[yoda 0]

It simply shouldn''t happen . the ippo''s pay something like 50 grand a year i''m told , 1 million would be madness .

[Yellow Rose of Texas 0]

Why would it be madness if the interest on the loan is $1.6m?

Isn''t just like re-financing your mortgage?

[canary cherub 1]

[quote user="Yellow Rose of Texas"]Why would it be madness if the interest on the loan is $1.6m? Isn''t just like re-financing your mortgage?[/quote]

A mortgage gets paid off eventually, leasing costs are a permanent drain on resources.  I see no point in exchanging short term pain for long term pain. 

 

[yoda 0]

The difference being at least with a mortgage it would be paid off at some point , but 1 million a year every year forever ? not good

[Yellowbeagle 0]

[quote user="yoda"]The difference being at least with a mortgage it would be paid off at some point , but 1 million a year every year forever ? not good[/quote]

True and no bank or investor who buys the ground is still going to be charging us £1million in rent in even 10 years time, they going to want to increase rent to make sure they keep up with inflation as time goes by. Seems a stupid idea and also it assumes that we wont ever need to ever borrow money again secured against our primary asset, so the board are saying we''ll never ever get into debt again are they?

[a1canary 0]

But you can start to see the attraction when weighing up 50 grand (??) vs £1.6m debt interest.

If you imagine it was you as a homeowner and your debts were so great that you were drowning in interest repayments, clearing your debts completely and replacing the repayments with a far smaller rental sum would be an attractive proposition. Rent may be forever, but clearly some have concluded that these level of debts (esp binner''s) are also forever.

I hate it (the idea of selling the ground), but i understand why it has to be looked at.

What i''m not so sure about is who on earth would buy it and why when the return appears so measely. I think we need someone with a better understanding of the financing of selling grounds.

[. 0]

[quote user="canary cherub "]

I can''t believe what I''m reading.  Bowkett comparing Ebbsfleet with Norwich is like Neil Doncaster comparing Norwich with Gretna . . . are we absolutely sure he''s left the building? [:D]

 

[/quote]

Third Division thinking I''m afraid.......

Worrying indeed.

[tom cavendish 0]

The club would be renting for the length of the lease, BUT at the end of the lease the club would be held to ransom and charged a fortune for a new lease.

The club would have no assets so would be unable to raise funds to build a new stadium or buy it back, so stuck in a terrible negotiating position.

At the end of the lease the stadium owners might also want to cash in and sell the stadium to developers.

All the lease means is that the club would have a home for x number of years, and then be in an even worse position.

[Bobert 0]

One of the major problems as far as I can see is getting out of Carrow Road.

The Club needs a new ground. The current ground is either too big or too small depending on which way the Club is to progress in the future and where future investment, if any, is come from.

If there is no one to replace Delia NCFC needs a ground to hold about 12,000 as the Club will for ever be in League One or lower.

If investment is forthcoming and NCFC is to be a Championship/Premier Club we need a ground to hold 35,000 and this new ground needs to be a multi purpose ground built somewhere more accessible to the ring road, the railway line and parking.

A long lease on Carrow Road will be a mill stone round the Clubs neck.