New Stadium Details And Discussions

[chrissivad]

Bastard hasn't replied to me yet. Was that address genuine?

the address the guy sent it to was:
[email protected]

 

[davidmatzdorf]

I know this is a bit random but does anyone know much about the Olympic stadium deal for the hammers.
I think they pay a rent of 2 million a year but do they split the gate receipts with the owners of the stadium cos if not with them filling that up they could be a serious threat in the future with only paying such a small amount.

There are a few references to long-term leases on this thread that advance the idea that revenues will be shared with the landlord. I've never seen a lease that works like that. A lease for a valuable fixed asset like a stadium will either have a one-off premium at the beginning and then a token 'peppercorn' rent, or it will have a substantial, but fixed annual rent, usually with a market-based rent review or an inflation-based increase/decrease every 5 years. No one takes premises on a lease on the basis that they will share their revenues with their landlord. It wouldn't suit either party - the landlord wants a reliable income stream and the tenant wants freedom to pursue their business in the way they see fit.

...They've also sold their biggest asset, they have nothing to borrow against if current obligations can't be met...

A long term and secure commercial lease, such as I expect that West Ham have on the OS, is very suitable to use as security for borrowing. For the past 2 years, I've been consulting for a big housing association on their borrowing strategy and that has involved getting about 30-40 housing estates lined up to use as security for several 8-figure loans, which the housing association will use to continue to build new developments. There are numerous estates included that have been developed on leasehold land and, although these have complications that have to be resolved to satisfy the banks, they are routinely accepted as security once we have ironed out these extra issues.

 

[jambreck]

There are a few references to long-term leases on this thread that advance the idea that revenues will be shared with the landlord. I've never seen a lease that works like that. A lease for a valuable fixed asset like a stadium will either have a one-off premium at the beginning and then a token 'peppercorn' rent, or it will have a substantial, but fixed annual rent, usually with a market-based rent review or an inflation-based increase/decrease every 5 years. No one takes premises on a lease on the basis that they will share their revenues with their landlord. It wouldn't suit either party - the landlord wants a reliable income stream and the tenant wants freedom to pursue their business in the way they see fit.

From what I understand, the LLDC will sell the naming rights to the stadium and pocket the lion's share of the income. West Ham will get a smaller share. LLDC will also pocket all income from renting out the the stadium for non West Ham events.

A long term and secure commercial lease, such as I expect that West Ham have on the OS, is very suitable to use as security for borrowing. For the past 2 years, I've been consulting for a big housing association on their borrowing strategy and that has involved getting about 30-40 housing estates lined up to use as security for several 8-figure loans, which the housing association will use to continue to build new developments. There are numerous estates included that have been developed on leasehold land and, although these have complications that have to be resolved to satisfy the banks, they are routinely accepted as security once we have ironed out these extra issues.

Far be it from me to question someone in the industry but do you think that West Ham's Olympic stadium leasehold is analogous to the kind of leasehold that you're talking about? A leasehold on a commercial or residential property has a capital value in so far as it can be sold - and therefore borrowed against. Can the same be said for West Ham's leasehold of the Olympic stadium? I'm not so sure. And even if it could, who would buy it from them? Leyton Orient?

 

[Lilbaz]

the address the guy sent it to was:
[email protected]

That was the one. Am a bit drunk and on turbo but will try again.

 

[Lilbaz]

Dear mr pickles. I sent you a previous message asking how the cpo for the tottenham new stadium was progressing.
It has been over a week without reply.
I know that you are a busy man, but thought that you would have a member of your staff that would take the time.
I may only have a small voice but this is repeated on many media formats.
Guess you are too busy, hope you kept your receipts.
Nothing to do with expenses fraud, just that meals can cost a lot for certain people.

See if he replies now.

 

[shelfboy68]

There are a few references to long-term leases on this thread that advance the idea that revenues will be shared with the landlord. I've never seen a lease that works like that. A lease for a valuable fixed asset like a stadium will either have a one-off premium at the beginning and then a token 'peppercorn' rent, or it will have a substantial, but fixed annual rent, usually with a market-based rent review or an inflation-based increase/decrease every 5 years. No one takes premises on a lease on the basis that they will share their revenues with their landlord. It wouldn't suit either party - the landlord wants a reliable income stream and the tenant wants freedom to pursue their business in the way they see fit.



A long term and secure commercial lease, such as I expect that West Ham have on the OS, is very suitable to use as security for borrowing. For the past 2 years, I've been consulting for a big housing association on their borrowing strategy and that has involved getting about 30-40 housing estates lined up to use as security for several 8-figure loans, which the housing association will use to continue to build new developments. There are numerous estates included that have been developed on leasehold land and, although these have complications that have to be resolved to satisfy the banks, they are routinely accepted as security once we have ironed out these extra issues.

David once again a big thank you

 

[jambreck]

Dear mr pickles. I sent you a previous message asking how the cpo for the tottenham new stadium was progressing.
It has been over a week without reply.
I know that you are a busy man, but thought that you would have a member of your staff that would take the time.
I may only have a small voice but this is repeated on many media formats.
Guess you are too busy, hope you kept your receipts.
Nothing to do with expenses fraud, just that meals can cost a lot for certain people.

See if he replies now.

If Pickles rejects the CPO, I'm blaming you.

Everyone......it was Lilbaz's fault.

Lilbaz.....that bloke over there.

 

[davidmatzdorf]

From what I understand, the LLDC will sell the naming rights to the stadium and pocket the lion's share of the income. West Ham will get a smaller share. LLDC will also pocket all income from renting out the the stadium for non West Ham events.

That sounds as if West Ham's lease is not an exclusive lease on the entirety of the premises, which I assumed it was. The landlord (LLDC) will also, separately, be selling the naming rights and retaining the right to use or rent out the stadium on days when West Ham are not using it. If WHFC don't have a lease that gives them exclusive possession of their premises, then all sorts of other issues arise and much of what I wrote might not apply.

But I still don't see it as likely that WHFC would allow LLDC to take a cut of the proceeds from their football activities.

...do you think that West Ham's Olympic stadium leasehold is analogous to the kind of leasehold that you're talking about?

If what you wrote is right, then not really.

A leasehold on a commercial or residential property has a capital value in so far as it can be sold - and therefore borrowed against. Can the same be said for West Ham's leasehold of the Olympic stadium? I'm not so sure. And even if it could, who would buy it from them? Leyton Orient?

This is where the issue of exclusive possession of the premises comes in. If WHFC want to use the stadium as security for a loan, then the lending bank would normally want to be able to repossess a specific property if the borrower defaulted on the loan - and then do something lucrative with it, probably sell it on. I think an agreement such as you are describing would be likely to put off most financial institutions.

 

[Roynie]

If I were a WHU fan right now I'd be worried. Their owners have reportedly sold their old ground and they will be renting the OS to play at in a couple of years. What's to stop their owners just selling the club and pocketting the money from the sale? At least Levy & Co are building the new stadium on the same site and it will be the Club's stadium!

 

[Graysonti]

Agree with above.

Not a 'normal' lease (as you would have say on a flat) with severe restrictive covenants. No way you could secure borrowing against it IMO.

 

[Lilbaz]

If Pickles rejects the CPO, I'm blaming you.

Everyone......it was Lilbaz's fault.

Lilbaz.....that bloke over there.

They really should have a breathalyzer test before you can text.

 

[Lilbaz]

Dear mr pickles. Very sorry for my last email. As you see from the time i was very tired and influenced by my uncle guiness and his colombian friends.
If you could let me know what is happening with the tottenham stadium that would be great.
Hope you have a lovely easter.

There have now apologised.

 

[Spursidol]

That sounds as if West Ham's lease is not an exclusive lease on the entirety of the premises, which I assumed it was. The landlord (LLDC) will also, separately, be selling the naming rights and retaining the right to use or rent out the stadium on days when West Ham are not using it. If WHFC don't have a lease that gives them exclusive possession of their premises, then all sorts of other issues arise and much of what I wrote might not apply.

But I still don't see it as likely that WHFC would allow LLDC to take a cut of the proceeds from their football activities.



If what you wrote is right, then not really.



This is where the issue of exclusive possession of the premises comes in. If WHFC want to use the stadium as security for a loan, then the lending bank would normally want to be able to repossess a specific property if the borrower defaulted on the loan - and then do something lucrative with it, probably sell it on. I think an agreement such as you are describing would be likely to put off most financial institutions.

I've seen West Ham being described as an 'anchor tenant' and whilst not a property expert I assumed that automatically meant there wre other tenants. Any thougts ?

Elsewhere I see that whilst they keep match receipts they 'share' catering receipts and a naming rights deal which is led by LLDC (or whatever they are called these days).

Wham's info says :http://www.olympicstadium.whufc.com/faqs/

 

[Spursidol]

Also if this running track is sacrosanct I cannot see how LLDC can allow the lease to be borrowed against - otherwise if Wham defaulted LLDC would lose the ability of allowing spectators to view the athletes on this running track from the stadium seating

And therefore although Wham may have exclusive use of the stadium on match days, I assume on other days it can be used by athletes and quite possibly other events that LLDC organise such as pop concerts ?

Does that help clarify Wham's lease on the stadium a bit more or not ?

 

[Lilbaz]

A university uses some of the rooms underneath the stadium. British athletics has a 99 year lease and i believe cricket can also use it for matches all this as well as concerts and 1 off events.

 

[Rocksuperstar]

Also if this running track is sacrosanct I cannot see how LLDC can allow the lease to be borrowed against - otherwise if Wham defaulted LLDC would lose the ability of allowing spectators to view the athletes on this running track from the stadium seating

And therefore although Wham may have exclusive use of the stadium on match days, I assume on other days it can be used by athletes and quite possibly other events that LLDC organise such as pop concerts ?

Does that help clarify Wham's lease on the stadium a bit more or not ?

If my memory serves, the running track will remain but the first tier of seating will be retractable, sort of like bleachers i suppose.

So that means they roll them out for match days... then leave them out until we fluke hosting a major international athletics competition sometime in the next 20 years.

 

[Spursidol]

If I were a WHU fan right now I'd be worried. Their owners have reportedly sold their old ground and they will be renting the OS to play at in a couple of years. What's to stop their owners just selling the club and pocketting the money from the sale? At least Levy & Co are building the new stadium on the same site and it will be the Club's stadium!

Think the deal on the Olympic stadium is that if Gold & Co sell the club in the next 10 years they need to hand over part of the proceeds of the Boleyn ground. So think they will stay with Wham for 10 years

 

[Harry Barber]

Agree with above.

Not a 'normal' lease (as you would have say on a flat) with severe restrictive covenants. No way you could secure borrowing against it IMO.

Absolutely. It's set in stone.
Anyhow, why borrow when you have a sugar daddy in Newham Council?

 

[davidmatzdorf]

Also if this running track is sacrosanct I cannot see how LLDC can allow the lease to be borrowed against - otherwise if Wham defaulted LLDC would lose the ability of allowing spectators to view the athletes on this running track from the stadium seating...

The lease could be written to protect the LLDC's rights even against a mortgagee-in-possession (the bank after it foreclosed on WHFC). But that would make it even harder for WHFC to persuade a bank to accept their OS lease as security.

The more I think about it, the less I can see any bank securing a loan on the West Ham lease.

 

[Grey Fox]

Bastard hasn't replied to me yet. Was that address genuine?

Yes and the fat **** hasn't replied to me either, about time SC'rs bombarded the **** with a couple of thousand emails, but not like your Lilbaz, with all due respect