Controversial sale of Home Park agreed by Argyle
PLYMOUTH Argyle shareholders have voted to sell Home Park to a newly formed property company for £7.5 million in a deal which has raised concerns with some fans.
It means the football team will become a 'priority' tenant of the new company, a wholly owned subsidiary of Argyle's holding company, and pay it a 'market rent'.
But Argyle directors insist the deal is a good one for the team and will enable the board to secure investment to turn Home Park into a 46,000-seater World Cup venue with a surrounding leisure complex.
Full details of the arrangement have yet to be revealed, but chairman Sir Roy Gardner said: "If we want to go forward with the upgrade to the stadium and develop it to be World Cup compliant we have to take an action that will enable us to interest potential investors.
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"This can only be done by putting this asset into a separate company."
He said: "The club will have priority rights of use of the ground and pay a market rent."
When pressed by The Herald over what a 'market rent' would be, he later said: "We won't decide a market rent: it will be determined independently at a time when the stadium is available."
Vice-chairman Paul Stapleton said other football clubs, including Premier League Hull City, were tenants of their stadiums.
The Home Park deal received the go-ahead at Plymouth Argyle Football Company Ltd's annual general meeting, at Home Park, yesterday.
The meeting heard that 45,000 proxy votes were in favour of the move, with only 66 against. However, a vote of hands among the 50-plus shareholders present was close run and required a count before the resolution was carried.
And following the meeting some shareholders told The Herald they had concerns about the ownership of Argyle's major asset.
The deal will now need approval from the Football League, but if this is forthcoming the Home Park stadium will pass to the new company Home Park Properties Limited (HPPL), a wholly owned subsidiary of Plymouth Argyle Football Company (Holdings) Limited.
The sale will be for not less than £7.5million, a figure an independent firm of property valuers put on the stadium, and higher than the £2.7million Plymouth City Council received when selling the ground to Argyle in December 2006.
However, the new sale is likely to be a paper transaction, paid for by turning loans into equity.
Argyle directors have loaned the club large sums in recent years.
The board considers the sale will 'significantly enhance' the ability to raise funding for the £50 million proposed stadium development, needed if it is to be a 2018 World Cup venue.
With Plymouth on the official list of potential host cities, the stadium will need to have its capacity increased to create other leisure facilities around the ground, including a 5,000-seater arena and conferencing space.
Executive director Keith Todd said the club would 'go public' with a 'pre-planning application' next week.
Sir Roy said: "The hub of that activity is that the football team continues to thrive and be successful.
"The club must be successful in order to sell the venue for other activities."
During the meeting some shareholders raised concerns, quizzing the Argyle board about the sell-off.
But Sir Roy stressed financial institutions were unwilling to lend directly to football clubs. The new ownership should make it easier to secure loans against the stadium, which is already mortgaged.
The board said the proposed sale would help reduce the club's operating costs as the stadium would be marketed for use by other organisations by a venue operating company.
Mr Todd said: "A consequence of the sale will be reduced debt levels. The club will be more viable with a stronger balance sheet."
Sir Roy said: "Its operating costs will be lower, spread over more days, and (the team) will get better facilities."
He said the 'lower cost base' would be seen 'in an improved playing squad'.
Following the meeting, Chris Ewings, vice-chairman of the PAFC Shareholders' Association, said he voted against the sale, and said: "I want to know more about it. I want to make sure the football club's best interests are looked after."
Another member of the Association, Jackie Moir, said she had also voted against and added: "We could lose control of the destiny of the football club. I'm not confident enough to vote for it."
However, Bill McCarthy, chairman of the Association, said he was not worried and added: "I don't think it's a bad thing. Sir Roy has been very honest."
Another resolution, to raise cash by issuing an open offer of 90,000 new shares to existing shareholders, was also approved. However, this move, which could have netted £2 million, only brought in £17,000 with shareholders unwilling to buy at the valuation of £22.22 per share.
The offer, which represents 60 per cent of the enlarged share capital, is underwritten by PAFCH, which means it will take the bulk of the shares.
Sir Roy described the response to the open offer as 'disappointing'.
Sir Roy also commented on the club's current financial difficulties, with a £2.8million loss recorded for last year, and the team second from bottom of the Championship. But he vowed: "We will bring Premier League football to Plymouth and become a pre-eminent sports and leisure destination."
He also said he was 'convinced' the club's Japanese-based non-executive directors, Yasuaki Kagami and George Synan, were committed to Argyle.