Purpose

The report:
 

1.   
Provided an update on the transition of the operation of the
Council’s leisure and entertainment facilities from Sheffield
City Trust (“SCT”) and the subsequent solvent
wind up of SCT. Such transition to include the Council acquiring
Phoenix Sports Limited (“PSL”) from SCT; PSL is
the tenant of an intermediate lease at the English Institute of
Sport Sheffield.
 

2.   
Sought approval for entry into the transfer agreement with SCT and
Sheffield International Venues Limited (“SIV”)
and associated documents.
 

Content

 

That
 

1.

The Council entering into the transfer
agreement (“Transfer Agreement”) with Sheffield
City Trust (“SCT”) and Sheffield International
Venues Limited (“SIV”), which includes an
agreement for the transfer of several sport and leisure services,
property agreements and the acquisition of Phoenix Sports Limited
(“PSL”), which is wholly owned by SCT, be
approved;
 

2.

The Council entering into the data sharing
agreement with SCT. This applies to SCT’s customers,
suppliers, transferring employees and non- transferring employees data, be
approved;
 

3.

The Council entering
into the tax indemnity with SCT. This is considered in
closed Appendix 2 (Financial and Commercial Implications), be
approved;
 

4.

The Council accepting the surrender of leases
of the following properties from SCT, including the Council
entering into an agreement for surrender and deeds of surrender, be
approved;
 
1.   
Utilita Arena Sheffield
2.   
Sheffield City Hall
3.   
Concord Sports Centre
4.   
Heeley Pool and Gym
5.   
Hillsborough Leisure Centre
6.   
Ponds Forge International Sports Centre
7.   
Springs Leisure Centre
8.   
Ice Sheffield
9.   
Beauchief Golf Club
10.Birley Wood Golf Club
11.Tinsley Park Golf Club
 

5.

Note that immediately prior the Council
acquiring PSL, PSL will agree to take a surrender of SCT’s
lease of the English Institute of Sport Sheffield;
 

6.

The Council being admitted as the sole member
of PSL. PSL is a company limited by guarantee and this means that
the Council will wholly own PSL, be approved;
 

7.

In relation to PSL:
 
1.   
Note that PSL will appoint two new directors.
2.   
Note that PSL will enter into a governance agreement with the
Council, which regulates the manner in
which PSL carries out its business.
3.   
Note that pursuant to the governance agreement, PSL and the Council
need to prepare and agree PSL’s business plan within 6 months
of PSL’s acquisition.
4.   
Note that PSL is the accountable body for the grant agreements
dated 31 August 2001 (as varied on 1 April 2011) and dated 1 April
2011 between Sport England and PSL.
 

8.

The Council entering into the governance
agreement with PSL, which is referred to in the above
Recommendation, be approved;
 

9.

The provision of indemnities in relation to
each of PSL’s new directors, relating to the carrying out of
their duties as directors for the board of PSL and for the Council
to enter into formal deeds of indemnity with each of PSL’s
new directors, be approved;
 

10.

PSL (as landlord) granting the Council (as
tenant) a lease of the English Institute of Sport Sheffield to
2040, including PSL entering into the
lease, be approved. Noting that this is a reserved matter in the
governance agreement referred to above;
 

11.

The Council (as tenant) entering into the
lease of the English Institute of Sport Sheffield referred to in
the above Recommendation for a premium of £10,000, including
the Council entering into the lease, be approved;
 

12.

Note that PSL received funding from Sport
England for maintenance works to the English Institute of Sport
Sheffield. The remaining amount held by PSL will be used to support
maintenance requirements at the English Institute of Sport
Sheffield. The lease referred to in the above Recommendation will
include an obligation on the Council to PSL to undertake or procure
the said works;
 

13.

The Council becoming the accountable body for
the grant agreement relating to Ice Sheffield and dated 29 December
2000 between Sport England and SCT, including the Council entering
a deed of novation with Sport England and SCT, be approved;
 

14.

Note that the shortfall agreement dated 22
February 2000 between the Council, SCT and SIV, as varied on 31
March 2006, 30 September 2013 and 28 November 2014
(“Shortfall Agreement”) will terminate on 1
January 2025;
 

15.

Note that the funding agreement dated 31 March
2022 between the Council and SCT, as varied by the deed of
extension dated 10 July 2023 (“Funding
Agreement”) shall remain in force (as varied by the
Transfer Agreement) until the liquidation of SCT and SIV;
 

16.

The Council entering
into a deed of set-off with SCT and SIV. The deed of set-off
relates to the set-off of debt owed by the Council in relation to
the Don Valley Stadium against SCT and SIV’s obligation to
repay all loans provided outside of the Shortfall Agreement and a
portion of the debt owed under the Shortfall Agreement, be
approved;
 

17.

The Council entering
into a deed of release with SCT and SIV. The deed of release
relates to the release of certain debt owed under the Shortfall
Agreement. The balance of the debt owed under the Shortfall
Agreement will be satisfied in exchange for the grant by SCT of the
lease surrenders and the transfer of the assets by SCT and SIV, be
approved;
 

18.

The Council entering
into a deed of release of security interests with SCT and
SIV. The deed of release of security interests relates to the
release of the debenture dated 1 March 2000 and terminates the
existing deposit and security deed and intercreditor deed, each
dated 31 March 2006, be approved;
 

19.

The Council entering into form DS1(s), which
releases the charge(s) in favour of the Council and dated 1 March
2000 over Hillsborough Leisure Centre, Utilita Arena Sheffield, Ice Sheffield and Ponds
Forge International Sports Centre, be approved;
 

20.

Note the Financial and Commercial Implications
in closed Appendix 2, including specific areas of risk and
financial liabilities affecting the Council; and
 

21.

Note the contents of Document Summary from DWF
at closed Appendix 1, including the material matters.