Decision Maker: Cabinet

Outcome: Recommendations Approved

Is Key Decision?: Yes

Is Callable In?: Yes

Date of Decision: September 3, 2024

Purpose:

Content: Salford City Council - Record of Decision (Cabinet)   I Paul Dennett, City Mayor, in consultation with Cabinet and in exercise of the powers contained within the City Council Constitution do hereby approve: 1. Authorise the acquisition of the City of Salford Community Stadium Limited (CosCos), including all assets (stadium and development land) through the acquisition of Peel’s 50% shareholding following legal and financial due diligence undertaken since the last report to Cabinet in February 2024. 2. Authorise the proposed outright purchase of the development land assets, requiring a payment to Peel, in accordance with the terms agreed, not previously considered by Cabinet in February 2024. 3. To note the Heads of Terms which have been agreed with Peel to secure the purchase of their 50% shares in CosCos (and its assets including the stadium and development land) and any debts owing from CosCos to Peel. 4. Delegate authority to the Executive Director Place in consultation with the S151 Officer and the City Mayor to negotiate, agree and finalise the detailed commercial terms of the transaction with Peel in order to secure the acquisition. 5. Authorise the City Solicitor to prepare and enter into all necessary documentation and agreements and to take all steps which are required to give effect to the recommendations above. 6. Recommend to the Board of CosCos that they adopt new constitutional arrangements in line with the ‘Derive’ model (amended as appropriate for the CosCos context) and that the City Solicitor be delegated to prepare the appropriate draft of new constitutional arrangements for submission to the Board for approval. 7. That up to 4 elected members or officers of the Council be nominated for appointment to the Board of CosCos and that the Chief Executive be requested to exercise his standing delegation in the Constitution of the Council in this regard. 8. Cabinet endorses the principle that there be a non-executive Chair of the Board of CosCos and at least 1 other non-executive member appointed to the Board. Cabinet also endorses the principle that Council nominations to the Board should minimise the risk of conflicts of interests in Council governance.     The Reasons are: The proposed purchase of the Peel shares in the Stadium Company supports the Councils objectives, expressed in the Strategic Statement of Intent document approved by Cabinet on 20 March 2023, by giving it full control of the stadium company. This will allow it to develop the stadium asset, the development land around it in an unencumbered way to support the City’s developing Rugby Strategy and more generally Sports and Leisure in the City to provide community, health and wellbeing benefits and to support both of the professional rugby clubs and their community/foundation arms by allowing them to become more sustainable by being more able to generate opportunities for sports/commercial income in the longer term. This will enable a strategically connected masterplan for the stadium and surrounding land to be developed in the context of a strategic sports and leisure destination for the city as a whole.  The surrounding area is  one of six strategic growth locations in Greater Manchester, and Western Gateway (Port Salford and connections to Port of Liverpool) providing potential for employment growth. The potential of the area is a key component of both the Western Gateway Infrastructure Scheme and is outlined in the Manchester North West Quadrant study. The masterplan will also build on the conclusions of the Playing Pitch Strategy and provide a building block to meet need identified in that strategy. Rather than simply selling the development land with the sole objective of generating the largest capital receipts, that a masterplan for the stadium and the land around it is developed in the context of the best sports and leisure development opportunities that would support those objectives set out above.    Options considered and rejected were: Not to proceed with the acquisition of Peel’s 50% shareholding in CosCos and or the outright purchase of the development land assets were options considered and rejected on the grounds that the Council’s objectives set out in the Strategic Statement of Intent and the report would not be achieved.   Assessment of Risk: High   The source of funding is: From Council earmarked reserved and capital financing over the medium term.   Legal Advice obtained: The Cabinet has been advised of the legal implications of the decision.   Financial Advice obtained: As set out in the report to Cabinet in February 2024, the Council is limited by government grant restrictions to retain the community stadium to 2028 and tenancy agreements until 2037. The purchase of CosCos affords the Council the opportunity to maximise the benefits and long-term sustainability of the community stadium and surrounding area over the medium term, whilst the grant restrictions remain and reflecting the fact that the Council currently owns 50% of the company and retains significant outstanding debt. The proposed deal retains the existing value of £29.7m debt and £1.7m share equity held by the Council in CosCos as set out in the February 2024 report.  In addition, there is a proposed payment to Peel to acquire their shares and debt. Whilst this will increase the Council’s outstanding debt, it provides greater control over all of the company’s assets to support the strategic regeneration potential of the site and redevelopment of the wider area around the stadium.    Procurement Advice obtained: Not applicable.     HR Advice obtained: No direct implications.     Climate Change Advice obtained: Not applicable.   The following documents have been used to assist the decision process: Cabinet Report January 2023 Cabinet Report July 2023 Cabinet Report February 2024 Playing Pitch Strategy 2015-2025 Other relevant documents contain exempt or confidential information and are not available for public inspection. Contact Officer: John Searle                             Telephone number: John.Searle@salford.gov.uk   (Please delete from the list below any which are not relevant).   -       The appropriate scrutiny to call-in the decision is the Growth and Prosperity Scrutiny Panel       Signed:        Paul Dennett                       Dated:   03.09.24                              .                      City Mayor   For Democratic Services use only   This decision was published on   03.09.24                                           This decision will come in force at 4.00 p.m. on 10.09.24                                                unless it is called-in in accordance with the Decision Making Process Rules. This decision was called-in on 9 September 2024.    The call-in was considered at a meeting of the Growth & Prosperity Scrutiny Panel held on 23 September 2023.   Following consideration of the written and oral submissions of the call-in Members, questions of the panel members and responses provided by the Deputy City Mayor and officers, the Growth and Prosperity Panel concluded that evidence provided to the meeting confirmed that all appropriate steps were taken in order that the City Mayor was able to take an informed decision and that no further action be taken in relation to the call-in.  The decision therefore came into effect on 23rd September 2024.