Salford city council's plans to buy the AJ Bell stadium could be 'illegal', opposition councillors have alleged.
Coun Robin Garrido is due to meet Salford’s chief finance officer Joanne Hardman and chief legal and monitoring officer Iolanda Puzio over the plan by city mayor Paul Dennett to take full ownership of the AJ Bell Stadium.
The Tory leader wants the two bosses to look into his claim that the city council would breach Section 5 of the Local Government and Housing Act 1989 if it was purchase Peel’s 50 per cent holding in the stadium. He told the Local Democracy Reporting Service (LDRS): “It appears to us [the Conservatives] that the city mayor and/or the council is about to take steps or consider taking steps which would constitute maladministration.”
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Under the proposal due for consideration by the authority’s cabinet the stadium would become the Salford Community Stadium (CoSCoS). Coun Garrido went on: “The outstanding debt on CoSCoS is about £37million and operational activity has failed to generate the capacity to repay this debt.
“This is evidenced by the continuous requests for funds to solve the rugby club’s cash flow crisis, the most recent loan amount being £350,000 as well as the inability to raise sufficient funds from all other activities.” He said that it should also be noted that up to £1.5m is still owed to the council from the previous stadium club/building owners.
“The report [to the cabinet, seen online on the city council’s website ahead of the meeting] also states that the asset value of the land may not currently clear all the debt,” said Coun Garrido. “If the city mayor and council were to proceed with this purchase it would need the injection of millions of pounds both to clear the debt and purchase the 50pc of the building owned by Peel.
“Paragraph 1.7 points out that Peel would be keen to sell their 50pc because of the opportunity to recover the debt which clearly they do not feel would otherwise be recovered. We do not believe that any of the objectives as set out in the statement of intent are achievable nor in the main have any of these objectives been achieved in the past.”
“We do not believe that this is proper use of council taxpayers money nor should the council be adding to the debt already in existence indeed, we believe it would be a misuse of council funds whether from capital or borrowing.” Tomorrow’s (Tuesday March 14) cabinet meeting - which was due to consider the report - has been postponed because Mr Dennett is away at a MIPIM property conference in Cannes.
Meanwhile, Coun Garrido will meet with Ms Hardman and Ms Puzio this week ahead of the rescheduled cabinet meeting next Monday (March 20). In response to Coun Garrdo's complaints, the two bosses said: "The report does not seek either a decision or a decision in principle to buy the stadium.
"The resolutions are: 1. To consider the report, the statement of strategic intent [to buy the stadium], the continuation of discussions regarding the full acquisition of the CoSCoS by the city council and 2. Note that the proposed acquisition and terms of such acquisition will be the subject to a formal report at such time that consideration of the detailed due diligence issues as outlined in the report have been progressed."
In a statement, a Salford council spokesperson said: “Salford City Council is set to consider a report on the Council’sstrategic intent regarding the City of Salford Community Stadium, which will set out the intention to protect the long term interests of the council, secure ongoing community use of the stadium, deliver social value through the activities of Salford Red Devils and Sale Sharks in the community and provide the opportunity to secure a long term home for Salford Red Devils. Ongoing work on the situation around the stadium will assess all legal implications of any prospective purchase as openly and transparently as possible given our responsibility to retain business confidentiality for third parties involved – this work should be taken as given through any property or asset transaction undertaken by the Council.
“Councillors, including opposition councillors, are being regularly engaged on these questions and collectively will be responsible for ensuring the probity of any decision-making. No decisions have yet been made, but the discussions between the council, the stadium company CosCos, Sale Sharks and Salford Red Devils are currently progressing well and we are confident of an outcome which will serve the best interest of residents and the City.”
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