Content

Salford City Council - Record of Decision (Cabinet)
 
I Paul
Dennett, City Mayor, in
consultation with Cabinet and in
exercise of the powers contained within the City Council
Constitution do hereby
approve:
1.
Authorise the acquisition of the City
of Salford Community Stadium Limited (CosCos), including all assets (stadium and
development land) through the acquisition of Peel’s 50%
shareholding following legal and financial due diligence undertaken
since the last report to Cabinet in February 2024.
2. Authorise
the proposed outright purchase of the development land assets,
requiring a payment to Peel, in accordance with the terms agreed,
not previously considered by Cabinet in February 2024.
3. To note the Heads of Terms which have
been agreed with Peel to secure the purchase of their 50% shares in
CosCos (and its assets including the
stadium and development land) and any debts owing from CosCos to Peel.
4. Delegate authority to the Executive
Director Place in consultation with the S151 Officer and the City
Mayor to negotiate, agree and finalise
the detailed commercial terms of the transaction with Peel in order
to secure the acquisition.
5. Authorise
the City Solicitor to prepare and enter into all necessary
documentation and agreements and to take all steps which are
required to give effect to the recommendations above.
6. Recommend to the Board of CosCos that they adopt new constitutional
arrangements in line with the ‘Derive’ model (amended
as appropriate for the CosCos context)
and that the City Solicitor be delegated to prepare the appropriate
draft of new constitutional arrangements for submission to the
Board for approval.
7. That up to 4 elected members or
officers of the Council be nominated for appointment to the Board
of CosCos and that the Chief Executive
be requested to exercise his standing delegation in the
Constitution of the Council in this regard.
8. Cabinet endorses the principle that
there be a non-executive Chair of the Board of CosCos and at least 1 other non-executive member
appointed to the Board. Cabinet also endorses the principle that
Council nominations to the Board should minimise the risk of conflicts of interests in
Council governance.  
 
The
Reasons are:
The
proposed purchase of the Peel shares in the Stadium Company
supports the Councils objectives, expressed in the Strategic
Statement of Intent document approved by Cabinet on 20 March 2023,
by giving it full control of the stadium company. This will allow
it to develop the stadium asset, the development land around it in
an unencumbered way to support the City’s developing Rugby
Strategy and more generally Sports and Leisure in the City to
provide community, health and wellbeing benefits and to support
both of the professional rugby clubs and their community/foundation
arms by allowing them to become more sustainable by being more able
to generate opportunities for sports/commercial income in the
longer term.
This
will enable a strategically connected masterplan for the stadium
and surrounding land to be developed in the context of a strategic
sports and leisure destination for the city as a whole.  The surrounding area is  one of six strategic growth locations in Greater
Manchester, and Western Gateway (Port Salford and connections to
Port of Liverpool) providing potential for employment growth. The
potential of the area is a key component of both the Western
Gateway Infrastructure Scheme and is outlined in the Manchester
North West Quadrant study. The masterplan will also build on the
conclusions of the Playing Pitch Strategy and provide a building
block to meet need identified in that strategy.
Rather
than simply selling the development land with the sole objective of
generating the largest capital receipts, that a masterplan for the
stadium and the land around it is developed in the context of the
best sports and leisure development opportunities that would
support those objectives set out above. 
 
Options considered and rejected were:
Not to
proceed with the acquisition of Peel’s 50% shareholding in
CosCos and or the outright purchase of
the development land assets were options considered and rejected on
the grounds that the Council’s objectives set out in the
Strategic Statement of Intent and the report would not be
achieved.
 
Assessment of Risk:
High
 
The
source of funding is:
From
Council earmarked reserved and capital financing over the medium
term.
 
Legal
Advice obtained:
The
Cabinet has been advised of the legal implications of the
decision.
 
Financial Advice obtained:
As set
out in the report to Cabinet in February 2024, the Council is
limited by government grant restrictions to retain the community
stadium to 2028 and tenancy agreements until 2037. The purchase of
CosCos affords the Council the
opportunity to maximise the benefits and long-term sustainability
of the community stadium and surrounding area over the medium term,
whilst the grant restrictions remain and reflecting the fact that
the Council currently owns 50% of the company and retains
significant outstanding debt.
The
proposed deal retains the existing value of £29.7m debt and
£1.7m share equity held by the Council in CosCos as set out in the February 2024
report.  In addition, there is a
proposed payment to Peel to acquire their shares and debt. Whilst
this will increase the Council’s outstanding debt, it
provides greater control over all of the company’s assets to
support the strategic regeneration potential of the site and
redevelopment of the wider area around the stadium. 
 
Procurement Advice obtained: Not applicable.
 
 
HR
Advice obtained: No direct implications.
 
 
Climate Change Advice obtained: Not applicable.
 
The
following documents have been used to assist the decision
process:
Cabinet Report January 2023
Cabinet Report July 2023
Cabinet Report February 2024
Playing Pitch Strategy 2015-2025
Other
relevant documents contain exempt or confidential information and
are not available for public inspection.

Contact Officer: John
Searle                            
Telephone number: John.Searle@salford.gov.uk
 
(Please delete from the list below any which are not
relevant).
 

-      
The appropriate scrutiny to call-in the decision is
the Growth and Prosperity Scrutiny Panel    

 

Signed:
       Paul
Dennett                     
 Dated:   03.09.24                             
.
                    
City Mayor
 

For Democratic
Services use only

 

This decision was
published on   03.09.24                                          

This decision will
come in force at 4.00 p.m. on 10.09.24                
                              
unless it is called-in in
accordance with the Decision Making Process Rules.
This decision was called-in on 9 September
2024. 
 
The call-in was considered at a meeting of the
Growth & Prosperity Scrutiny Panel held on 23 September
2023.
 
Following
consideration of the written and oral submissions of the call-in
Members, questions of the panel members and responses provided by
the Deputy City Mayor and officers, the Growth and Prosperity Panel
concluded that evidence provided to the meeting confirmed that all
appropriate steps were taken in order that the City Mayor was able
to take an informed decision and that no further action be taken in
relation to the call-in.  The decision
therefore came into effect on 23rd September
2024.