New Stadium Details And Discussions

[Spursidol]

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.

Think I understand the legal theory of that.

But doesn't the basics of Wham lease read as if it has first rights to play its football matches there on say a maximum of 60 days a year, and that at all other times LLDC has right to do almost whatever it wants, so even if a lender could gain the benefit of the Wham lease it might at best have the right to use the stadium for those 60 days - and it might even be drafted so its only Wham can use the stadium for those 60 days, so the lender could not re-sell those rights.

 

[Hobbes]

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

Not strictly true - all outlet mall leases are structured this way (Bicester etc) and increasingly shopping centre leases also, especially anchor tenants. i agree it seems unlikely here if its an exclusive lease, which seems to be in doubt.

 

[davidmatzdorf]

...it might even be drafted so its only Wham can use the stadium for those 60 days, so the lender could not re-sell those rights.

That would be a non-transferable lease. We have no information that would suggest that this is - or is not - what West Ham and the LLDC have negotiated.

It really all depends on whether West Ham entered into the deal on the understanding that they had to have a chargeable interest in the stadium. If they didn't need to borrow secured on the OS, then they might have been relaxed about this aspect and thus instructed their legal advisers to concentrate their hard negotiating on other elements of the deal.

If they needed to be able to use the OS as security for borrowing as part of their business plan, they and their legal advisers will have stonewalled until they got a chargeable interest. If you reckon you will ever need to use an asset, such as land or buildings, as security, any clause that might give a bank a major problem is a deal-breaker and you don't sign until it's sorted out.

 

[jambreck]

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.

Cheers for that.

And I am right about the terms of West Ham's lease. FAQ page on West Ham OS:

http://www.olympicstadium.whufc.com/faqs/

West Ham will keep all ticket revenues (including corporate) but they will have to share catering income and stadium naming rights with LLDC. And, as I said, LLDC will apparently take the lion's share. This was posted on the Olympic stadium thread on Skyscrapercity:

To which a relatively well informed Hammer responded:

that's just pure speculation. Fact of the matter is we dont know what the naming rights deal is, though we have heard from a number of sources that the total amount the LLDC will receive per year is £10 million from rent and share of food and drink sales and naming rights. West Ham/ LLDC will i expect be looking for somewhere in the region of £10 mil pa for the stadium sponsorship, so given £2 mil rent and (lets assume something in the region of) £2 mil food and drink revenues that would still suggest a kick-back to West Ham in the region of £4 mil in term of stadium sponsorship revenue.

Also, as posted earlier, all revenues (including catering) from renting out the stadium for non West Ham events will go to LLDC - not West Ham. WH will only earn money from their own use of the stadium.

Lastly, for what it's worth, West Ham also had to contribute £15m to the current redevelopment of the stadium.

 

[jambreck]

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/

Well, for starters, British Athletics are another tenant, guaranteed use of the stadium for 20 days a year.

And, just for info, LLDC are still called LLDC! They are what became of the OPLC.

 

[jambreck]

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.

Like the 2017 World Athletics Championships, you mean?

 

[Lilbaz]

Cheers for that.

And I am right about the terms of West Ham's lease. FAQ page on West Ham OS:

http://www.olympicstadium.whufc.com/faqs/

West Ham will keep all ticket revenues (including corporate) but they will have to share catering income and stadium naming rights with LLDC. And, as I said, LLDC will apparently take the lion's share. This was posted on the Olympic stadium thread on Skyscrapercity:

To which a relatively well informed Hammer responded:



Also, as posted earlier, all revenues (including catering) from renting out the stadium for non West Ham events will go to LLDC - not West Ham. WH will only earn money from their own use of the stadium.

Lastly, for what it's worth, West Ham also had to contribute £15m to the current redevelopment of the stadium.

What about costs, stewards, police etc... who pays for that?

(should we sart a thread in general football?)

 

[chrissivad]

From Edmonton on COYS

There are some legal small print issues but lets just say Archway were offered a very suitable built facility at 500 whl, which is a site well covered in this forum.

 

[thinktank]

From Edmonton on COYS

What does that mean??

 

[Mister Jez]

What about costs, stewards, police etc... who pays for that?

(should we sart a thread in general football?)

As with every other Premier League club, the cost of the police and stewards are down to the club. Unless things have changed.

 

[davidmatzdorf]

Not strictly true - all outlet mall leases are structured this way (Bicester etc) and increasingly shopping centre leases also, especially anchor tenants. i agree it seems unlikely here if its an exclusive lease, which seems to be in doubt.

Isn't that what one calls a franchise contract? It's not really the same as a lease for premises, because some of the value resides in the goodwill and the brand of the chain. The lessee is buying permission to sell 'Burger King' (or whatever), rather than just a space to do business in. I can see how it would make sense to have revenue-sharing for a franchise, because it is related to how well the franchisee is selling the standardised product. But I've never even read a franchise agreement, so I'm guessing.

I have dealt with several 'anchor tenant' leases, typically where a major supermarket chain would take the main retail unit on the ground floor of an affordable housing development for a local-sized supermarket, and revenue-sharing was not a part of any of them.

 

[Spursidol]

What does that mean??

'lets just say Archway were offered a very suitable built facility at 500 whl' means that spurs offered premises at 500 white hart lane as compensation to archway about 3 or 4 years ago (see harringay planning permission - dealt with in full earlier on in this thread) so archway cannot contend that they have not been offered suitable nearby new built premises to carry on their business - so the issue of adequate compensation is probably difficult for archway to argue

The first part i read as being legal small print (ie detail)




0

 

[Harry Barber]

Isn't that what one calls a franchise contract? It's not really the same as a lease for premises, because some of the value resides in the goodwill and the brand of the chain. The lessee is buying permission to sell 'Burger King' (or whatever), rather than just a space to do business in. I can see how it would make sense to have revenue-sharing for a franchise, because it is related to how well the franchisee is selling the standardised product. But I've never even read a franchise agreement, so I'm guessing.

I have dealt with several 'anchor tenant' leases, typically where a major supermarket chain would take the main retail unit on the ground floor of an affordable housing development for a local-sized supermarket, and revenue-sharing was not a part of any of them.

It's known as a 'percentage lease'.

 

[Spursidol]

Isn't that what one calls a franchise contract? It's not really the same as a lease for premises, because some of the value resides in the goodwill and the brand of the chain. The lessee is buying permission to sell 'Burger King' (or whatever), rather than just a space to do business in. I can see how it would make sense to have revenue-sharing for a franchise, because it is related to how well the franchisee is selling the standardised product. But I've never even read a franchise agreement, so I'm guessing.

I have dealt with several 'anchor tenant' leases, typically where a major supermarket chain would take the main retail unit on the ground floor of an affordable housing development for a local-sized supermarket, and revenue-sharing was not a part of any of them.

Think the revenue sharing refers to catering revenues for wham matches which is shared between wham and lldc, so lldc revenue fom the wham lease is the rent plus a share of some revenues.

 

[davidmatzdorf]

It's known as a 'percentage lease'.

I guess what I was asking was whether that kind of 'percentage lease' is generally - or exclusively - used when the lessee's premises are selling a franchised brand name product, as opposed to housing the lessee's own independent business.

 

[jambreck]

What about costs, stewards, police etc... who pays for that?

(should we sart a thread in general football?)

Staffing and policing costs will be West Ham's responsibility for all West Ham events.

The only cost that LLDC will be responsible for is maintaining the stadium.

 

[jambreck]

'lets just say Archway were offered a very suitable built facility at 500 whl' means that spurs offered premises at 500 white hart lane as compensation to archway about 3 or 4 years ago (see harringay planning permission - dealt with in full earlier on in this thread) so archway cannot contend that they have not been offered suitable nearby new built premises to carry on their business - so the issue of adequate compensation is probably difficult for archway to argue

The first part i read as being legal small print (ie detail)




0

The issue of compensation cannot constitute any part of an appeal against a CPO. Such an appeal can only be on the grounds that it is an inappropriate use of a CPO - i.e. that the CPO isn't, as claimed, in the public interest.

Compensation will be set independently (unless Archway agree with Haringey / Spurs to settle).

 

[Spursidol]

The issue of compensation cannot constitute any part of an appeal against a CPO. Such an appeal can only be on the grounds that it is an inappropriate use of a CPO - i.e. that the CPO isn't, as claimed, in the public interest.

Compensation will be set independently (unless Archway agree with Haringey / Spurs to settle).

Agree with that - post was to explain Edmonton's post

Compensation is 'market value' - Spurs offering nearby premises means its difficult to argue that their business would be prejudiced as well as reasonable compensation for the property

 

[CoopsieDeadpool]

Guys, hope you don't mind. I thought I'd share this post from Skyscrapercity, by a member called 'flashman'. It's a genuinely good post and explains the current situation (CPO concerns) very well indeed. Some real food for thought, for those who are concerned about this CPO decision...............

"Kebab Man was fretting about a possible decision against the CPO by Pickles not being an easy thing to appeal since it would be trying to appeal against a government decision.

The government has already made a decision and done so in the strongest way possible - by committing to spend money on the NDP. Pickles turning up his nose at the CPO would effectively be rejecting a government decision.

A quick scan of what he has to weigh comes down to this:

Support Archway's right to hold onto their business site and move forward with their plans to expand to add, what, a dozen new jobs? Although how they'd expand dramatically would be hard to imagine since their site is surrounded by land Spurs own. Fat chance of buying any of that.

Or grant the CPO and support a decision already made by Boris Johnson to spend over £41 million pounds to assist in the development of the following:

The overall (£70 million Regeneration Fund) programme is predicted to create 500 construction jobs over five years, 2000 long term jobs and 350 apprenticeships, plus 15,000 sqm in new commercial space, and over 100 new businesses. The Mayor's aim is ensure that all contracts awarded for regeneration work must provide jobs for local people and the project team will be working with local businesses to make sure they are in a good position to bid for suitable contracts.

The Mayor's Regeneration Fund, set up to help those communities most affected by the 2011 summer riots, includes £20 million central Government funding for Tottenham and Croydon, and the rest from City Hall.

Investment through the Fund will support work and master-planning across the following areas:

* £27 million for North Tottenham/Northumberland Park - to support transport infrastructure and public realm improvements to help unlock proposals for the major stadium-led regeneration scheme.

* £2.8 million into a package of works to improve the High Road, bringing disused buildings back into use, paving the way for growth in terms of housing, employment and community.

* £4 million to support an Opportunity Investment Fund - to purchase key sites to bring forward development on the High Road and at Tottenham Hale.

* £4.5 million for an Employment and Skills programme to provide support for hard to reach young people and problem families in terms of employability, access to jobs and skills training.

* £3 million to transform 639 High Road for community use. Formerly borough planning offices, this listed building, opposite the Carpet Right store, was burnt out during the disturbances. The building will be transformed into a Team London Enterprise and Employment Hub creating a space that will house a number of different initiatives and schemes helping business start-ups and young entrepreneurs, as well as supporting skills and employment opportunities for local people, youth sport projects and volunteering opportunities. It is also proposed that the site will house a social enterprise café. The project team will be working with the local community to involve them in running and managing the hub.

http://www.london21.org/borough/news/show/33/2272/

Plus the fact that all this regeneration acts as further impetus for transportation improvements for additional development and job creation.

Honestly, Pickles has only one call to make here and that's to grant the CPO and get things moving. I'm surprised unions and tradesmen haven't begun to agitate a bit for him to get on with it. He'd have a very hot seat to work from if he said no to this."...........................

 

[Spursidol]

Guys, hope you don't mind. I thought I'd share this post from Skyscrapercity, by a member called 'flashman'. It's a genuinely good post and explains the current situation (CPO concerns) very well indeed. Some real food for thought, for those who are concerned about this CPO decision...............

"Kebab Man was fretting about a possible decision against the CPO by Pickles not being an easy thing to appeal since it would be trying to appeal against a government decision.

The government has already made a decision and done so in the strongest way possible - by committing to spend money on the NDP. Pickles turning up his nose at the CPO would effectively be rejecting a government decision.

A quick scan of what he has to weigh comes down to this:

Support Archway's right to hold onto their business site and move forward with their plans to expand to add, what, a dozen new jobs? Although how they'd expand dramatically would be hard to imagine since their site is surrounded by land Spurs own. Fat chance of buying any of that.

Or grant the CPO and support a decision already made by Boris Johnson to spend over £41 million pounds to assist in the development of the following:

The overall (£70 million Regeneration Fund) programme is predicted to create 500 construction jobs over five years, 2000 long term jobs and 350 apprenticeships, plus 15,000 sqm in new commercial space, and over 100 new businesses. The Mayor's aim is ensure that all contracts awarded for regeneration work must provide jobs for local people and the project team will be working with local businesses to make sure they are in a good position to bid for suitable contracts.

The Mayor's Regeneration Fund, set up to help those communities most affected by the 2011 summer riots, includes £20 million central Government funding for Tottenham and Croydon, and the rest from City Hall.

Investment through the Fund will support work and master-planning across the following areas:

* £27 million for North Tottenham/Northumberland Park - to support transport infrastructure and public realm improvements to help unlock proposals for the major stadium-led regeneration scheme.

* £2.8 million into a package of works to improve the High Road, bringing disused buildings back into use, paving the way for growth in terms of housing, employment and community.

* £4 million to support an Opportunity Investment Fund - to purchase key sites to bring forward development on the High Road and at Tottenham Hale.

* £4.5 million for an Employment and Skills programme to provide support for hard to reach young people and problem families in terms of employability, access to jobs and skills training.

* £3 million to transform 639 High Road for community use. Formerly borough planning offices, this listed building, opposite the Carpet Right store, was burnt out during the disturbances. The building will be transformed into a Team London Enterprise and Employment Hub creating a space that will house a number of different initiatives and schemes helping business start-ups and young entrepreneurs, as well as supporting skills and employment opportunities for local people, youth sport projects and volunteering opportunities. It is also proposed that the site will house a social enterprise café. The project team will be working with the local community to involve them in running and managing the hub.

http://www.london21.org/borough/news/show/33/2272/

Plus the fact that all this regeneration acts as further impetus for transportation improvements for additional development and job creation.

Honestly, Pickles has only one call to make here and that's to grant the CPO and get things moving. I'm surprised unions and tradesmen haven't begun to agitate a bit for him to get on with it. He'd have a very hot seat to work from if he said no to this."...........................

for the reasons stated i am sure the cpo has to be in spurs favour, if not he risks boris and harringay appealing his decision and potentially the resurgance of tottemham area goimg backwards if he rules otherwise on the other hand i am sure pickles would prefer it to be an agreed position between spurs and archway - hence the delays.