Beefy
Life President
I feel there are more issues I would like to share with supporters in relation to football matters, which includes acknowledging the very capable backroom staff who get little credit for maintaining a well oiled operation. That topic will be on another agenda as many fans’ only point of contact with the Club is either with the ticket office or the match day stewards. I feel fans might like to know the job of other contributors to their club.
Behind the scenes we have a vast contingent of commercial and marketing personnel together with administrative and accounting staff. There are also separate departments for youth, football in the community, call centre, ground staff and catering, and not forgetting merchandise.
For a highlight of 90 minutes on a Saturday afternoon, or as today a Tuesday night, there is a big operation to provide a service to our customers from dedicated team of - often forgotten - people in support, but more about that another time.
This week I am going to provide a strategic overview of the stadium plans and touch on the key issues relating to the funding and how this has all been affected by the banking and economic crisis affecting the globe – and that is not being dramatic.
The stadium is, as everyone knows, planned at 22,000 seats. There is an open concourse around the majority of the building looking down into the bowl. The continental style concourse contains a number of food and drink outlets (and of course innumerable toilets – proportionately more for the gentler sex!) to accommodate the needs of our fans. The concourse is principally on three sides of the stadium (north, east and south).
The west stand will be the “engine room” accommodating not only the executive boxes but also a number of restaurants which includes a large conference facility for circa 700 people. The west stand also has a hotel and about 40% of the hotel bedrooms will double up as box suites on match days. Whilst a standard box will accommodate 10 persons there will be facilities to accommodate as many as 40 and different numbers in between. On non match days some of the large boxes will be let out as meeting rooms for third party use.
It is also planned to have offices on the upper levels where the Club’s staff will also be accommodated. The changing and all ancillary facilities (including hydro pool, treatment rooms and all mod cons) will be in the basement at pitch level.
I am proud to say that Southend United’s new stadium will be iconic. Its design is unique and we have taken careful consideration of the topography, so that in entering the stadium from the principal access in the south east corner, supporters will enter at concourse level and then walk down to their seats. If supporters enter via the west stand they will go to the seats via a series of lifts or staircases. If you were at the top of the west stand you would be seven storeys up and with a spectacular view! We will excavate the bowl to achieve what we anticipate will be improved acoustics with the stadium retaining the sound achieved through its design. As part of our planning application we carried out extensive acoustic modelling to ensure that the Gardens of Remembrance are respected and the new “Roots Hall Roar” is harboured within the stadium. I plan to also dedicate an area for the Blue Voice.
A name for the new stadium has yet to be decided but it is very likely to be that of a major corporate sponsor. In the coming months we, in conjunction with a marketing company, will be embarking on a naming rights campaign. This can produce significant long term income.
The Club’s stadium is very different from any other stadium structure in the UK and this is reflected in its build cost which is significant and might be approaching £2000 per seat – some £44m. In this market it is difficult to determine the exact price for whilst the specification is high we can equally expect competitive prices particularly in relation to the ground works and superstructure.
The Echo newspaper, perhaps unintentionally or without any supporting detail, has talked about £50m, £80m and £25m. These numbers are taken out of context. Of course we have known from the very early stages what the cost of the stadium would be (give or take a contingency sum).
Notwithstanding that there are always detailed exercises known as Value Engineering which are ongoing not just during the planning, but throughout the tender and construction process. The absolute costs will therefore not be known until practical completion but as always I will be focused on the detail.
There are three key financial drivers to meet the cost of the stadium whilst not, of course, forgetting the cost of the land itself.
The new stadium project will extend to some 52 acres. Here at Roots Hall we are accommodated on just 7.5 acres!
We could have designed a stadium at lower cost, such as the Colchester model, but Southend’s plans include the provision of investment income to support your Club. The financial modelling to achieve a cost effective project was, as I hope supporters would know, given a great deal of thought and planning. Indeed they still are as we compensate for changing times.
The financial components to meet the cost of construction are the sale of Roots Hall to Sainsbury’s, leveraging against income from the retail park adjacent to the new facility and the future sale of a limited number of debenture seats. The diagram below extracted from the letting brochure puts the new stadium and retail park into context relative to Waitrose adjacent and B&Q to the east.
We exchanged contracts with Sainsbury’s at the time of the Planning Inquiry in September 2007 so a major part of the transaction is advanced. Nevertheless as an integral part of those arrangements we are planning to build a new St Mary’s Court (at our cost) to replace the existing St Mary’s Court which is the block of flats fronting Victoria Avenue. Those new plans are currently with the Council and we are hoping they will be favourably considered later this month – perhaps on 25th March.
Many of you must be wondering how the financial turmoil is affecting a project of this magnitude. Put quite simply, with the country’s high street banks being nationalised (we should not be shy of saying they have gone bust) there is limited, if any, development funding available to anyone at present. Certainly, none whatsoever of a speculative nature.
Coupled with this football, particularly outside the Premiership, is often regarded as a “red sector” amongst banking institutions because of the known volatility within the industry. Consequently we have had to think outside the box in finding ways to fund the stadium without being reliant on the UK’s clearing banks which many would regard as an impossible task.
However we have found solution(s) and it is this tripartite approach to the funding which will allow the scheme to proceed before the banks’ recovery. At some stage the UK banks will recover and, of course, they will start lending to the property sector for if that were not the case, they might as well close the doors now and never reopen. For the moment the doors are simply closed!
I have to tell you that during the planning process the constituent parts of this scheme were very straight forward to fund. Indeed the financial equation was designed to ensure such a position. After all what is the point in going to considerable lengths to obtain planning consent and not being able to implement the approval. This is a project for Southend United, the town of Southend and it will also attract regional interest. The attention to the financial modelling and related consents was key.
Many of you probably do not know that Savills, who were the Club’s planning consultants, recently won a prestigious, national planning award. The Club’s new stadium plans were a fundamental part of their submissions. I am not a “luncher” (mostly preferring a sandwich or something) but on this occasion I attended the award ceremony together with 700-800 other people at the Hilton in Park Lane. It gave me goose bumps to see our new stadium plans on the big screen when the award was being received. A great achievement and a feather in the town of Southend’s cap.
Back to the funding; whereas a straightforward funding package could have been arranged at the time of submitting the plans, by the time the approval was eventually received (18 months later) the financial markets had disintegrated. If only the Government Office had not demanded an Inquiry – which in the end added nothing other than a further bill of £900,000!
We were therefore faced with more challenges including the letting of the retail park as a prerequisite to any funds. Here, again, we were given even more hoops to jump through for the very first tenant identified was JJB Sport who have since run into their own difficulties and are no longer in the market. Perhaps it is questionable whether they (JJB) will be able to continue to exist in the same guise. I suspect with a much reduced market presence but certainly not a company for immediate expansion, disappointingly.
This situation has affected many prospective tenants but that said we have made brilliant progress since Christmas in identifying operators. We are in the throes of finalising terms with some of those companies whilst others are in solicitors’ hands.
To put this exercise into context, it may interest you to know that my negotiations have extended to circa 26 parties in assembling the various interests not including the current discussions with prospective tenants which in time will extend to lease agreements within the stadium itself. It is these discussions with the Council, lawyers and existing bankers that occupies the majority of my time at present.
Therefore I hope you can perhaps begin to understand why it would be imprudent to make public statements about programming and completion of the new facility whilst so many issues have been up in the air. We have to bring the threads of many negotiations and discussions to fruition in order to crystallise the complex funding package.
At present I am reliant on the Council to conclude contractual positions which we have negotiated but, as ever, Southend Borough Council have been fully supportive of Southend United’s plans. Therefore there is no reason to assume those negotiations will be prolonged any longer than is absolutely necessary, thereby paving the way for rapid progress.
With a fair wind, and subject to the above, I can see a position arising where we will be on site undertaking the bulk excavation and being able to maintain continuity of construction in the summer of this year with completion in good time for the 2011 season.
It is my intention to keep supporters fully advised as all these matters are progressed but I thought it might be interesting to understand some of the complexities behind the scenes as part of my weekly topic.
I will talk more about these issues but for the moment I hope this gives you an insight and underpins the confidence I have in making sure I not only deliver the stadium, but a development of which all the people of Southend United and the town will be proud whilst providing the foundation for fulfilling our dreams.
Until next week.
Up the Blues!
p.s If this arrived during tonight’s match that is because it takes two-three hours to “distribute” to our 28,000 email addresses. I am certainly not typing this whilst watching Millwall!!
Ron Martin
Chairman,
Southend United Football Club
Behind the scenes we have a vast contingent of commercial and marketing personnel together with administrative and accounting staff. There are also separate departments for youth, football in the community, call centre, ground staff and catering, and not forgetting merchandise.
For a highlight of 90 minutes on a Saturday afternoon, or as today a Tuesday night, there is a big operation to provide a service to our customers from dedicated team of - often forgotten - people in support, but more about that another time.
This week I am going to provide a strategic overview of the stadium plans and touch on the key issues relating to the funding and how this has all been affected by the banking and economic crisis affecting the globe – and that is not being dramatic.
The stadium is, as everyone knows, planned at 22,000 seats. There is an open concourse around the majority of the building looking down into the bowl. The continental style concourse contains a number of food and drink outlets (and of course innumerable toilets – proportionately more for the gentler sex!) to accommodate the needs of our fans. The concourse is principally on three sides of the stadium (north, east and south).
The west stand will be the “engine room” accommodating not only the executive boxes but also a number of restaurants which includes a large conference facility for circa 700 people. The west stand also has a hotel and about 40% of the hotel bedrooms will double up as box suites on match days. Whilst a standard box will accommodate 10 persons there will be facilities to accommodate as many as 40 and different numbers in between. On non match days some of the large boxes will be let out as meeting rooms for third party use.
It is also planned to have offices on the upper levels where the Club’s staff will also be accommodated. The changing and all ancillary facilities (including hydro pool, treatment rooms and all mod cons) will be in the basement at pitch level.
I am proud to say that Southend United’s new stadium will be iconic. Its design is unique and we have taken careful consideration of the topography, so that in entering the stadium from the principal access in the south east corner, supporters will enter at concourse level and then walk down to their seats. If supporters enter via the west stand they will go to the seats via a series of lifts or staircases. If you were at the top of the west stand you would be seven storeys up and with a spectacular view! We will excavate the bowl to achieve what we anticipate will be improved acoustics with the stadium retaining the sound achieved through its design. As part of our planning application we carried out extensive acoustic modelling to ensure that the Gardens of Remembrance are respected and the new “Roots Hall Roar” is harboured within the stadium. I plan to also dedicate an area for the Blue Voice.
A name for the new stadium has yet to be decided but it is very likely to be that of a major corporate sponsor. In the coming months we, in conjunction with a marketing company, will be embarking on a naming rights campaign. This can produce significant long term income.
The Club’s stadium is very different from any other stadium structure in the UK and this is reflected in its build cost which is significant and might be approaching £2000 per seat – some £44m. In this market it is difficult to determine the exact price for whilst the specification is high we can equally expect competitive prices particularly in relation to the ground works and superstructure.
The Echo newspaper, perhaps unintentionally or without any supporting detail, has talked about £50m, £80m and £25m. These numbers are taken out of context. Of course we have known from the very early stages what the cost of the stadium would be (give or take a contingency sum).
Notwithstanding that there are always detailed exercises known as Value Engineering which are ongoing not just during the planning, but throughout the tender and construction process. The absolute costs will therefore not be known until practical completion but as always I will be focused on the detail.
There are three key financial drivers to meet the cost of the stadium whilst not, of course, forgetting the cost of the land itself.
The new stadium project will extend to some 52 acres. Here at Roots Hall we are accommodated on just 7.5 acres!
We could have designed a stadium at lower cost, such as the Colchester model, but Southend’s plans include the provision of investment income to support your Club. The financial modelling to achieve a cost effective project was, as I hope supporters would know, given a great deal of thought and planning. Indeed they still are as we compensate for changing times.
The financial components to meet the cost of construction are the sale of Roots Hall to Sainsbury’s, leveraging against income from the retail park adjacent to the new facility and the future sale of a limited number of debenture seats. The diagram below extracted from the letting brochure puts the new stadium and retail park into context relative to Waitrose adjacent and B&Q to the east.
We exchanged contracts with Sainsbury’s at the time of the Planning Inquiry in September 2007 so a major part of the transaction is advanced. Nevertheless as an integral part of those arrangements we are planning to build a new St Mary’s Court (at our cost) to replace the existing St Mary’s Court which is the block of flats fronting Victoria Avenue. Those new plans are currently with the Council and we are hoping they will be favourably considered later this month – perhaps on 25th March.
Many of you must be wondering how the financial turmoil is affecting a project of this magnitude. Put quite simply, with the country’s high street banks being nationalised (we should not be shy of saying they have gone bust) there is limited, if any, development funding available to anyone at present. Certainly, none whatsoever of a speculative nature.
Coupled with this football, particularly outside the Premiership, is often regarded as a “red sector” amongst banking institutions because of the known volatility within the industry. Consequently we have had to think outside the box in finding ways to fund the stadium without being reliant on the UK’s clearing banks which many would regard as an impossible task.
However we have found solution(s) and it is this tripartite approach to the funding which will allow the scheme to proceed before the banks’ recovery. At some stage the UK banks will recover and, of course, they will start lending to the property sector for if that were not the case, they might as well close the doors now and never reopen. For the moment the doors are simply closed!
I have to tell you that during the planning process the constituent parts of this scheme were very straight forward to fund. Indeed the financial equation was designed to ensure such a position. After all what is the point in going to considerable lengths to obtain planning consent and not being able to implement the approval. This is a project for Southend United, the town of Southend and it will also attract regional interest. The attention to the financial modelling and related consents was key.
Many of you probably do not know that Savills, who were the Club’s planning consultants, recently won a prestigious, national planning award. The Club’s new stadium plans were a fundamental part of their submissions. I am not a “luncher” (mostly preferring a sandwich or something) but on this occasion I attended the award ceremony together with 700-800 other people at the Hilton in Park Lane. It gave me goose bumps to see our new stadium plans on the big screen when the award was being received. A great achievement and a feather in the town of Southend’s cap.
Back to the funding; whereas a straightforward funding package could have been arranged at the time of submitting the plans, by the time the approval was eventually received (18 months later) the financial markets had disintegrated. If only the Government Office had not demanded an Inquiry – which in the end added nothing other than a further bill of £900,000!
We were therefore faced with more challenges including the letting of the retail park as a prerequisite to any funds. Here, again, we were given even more hoops to jump through for the very first tenant identified was JJB Sport who have since run into their own difficulties and are no longer in the market. Perhaps it is questionable whether they (JJB) will be able to continue to exist in the same guise. I suspect with a much reduced market presence but certainly not a company for immediate expansion, disappointingly.
This situation has affected many prospective tenants but that said we have made brilliant progress since Christmas in identifying operators. We are in the throes of finalising terms with some of those companies whilst others are in solicitors’ hands.
To put this exercise into context, it may interest you to know that my negotiations have extended to circa 26 parties in assembling the various interests not including the current discussions with prospective tenants which in time will extend to lease agreements within the stadium itself. It is these discussions with the Council, lawyers and existing bankers that occupies the majority of my time at present.
Therefore I hope you can perhaps begin to understand why it would be imprudent to make public statements about programming and completion of the new facility whilst so many issues have been up in the air. We have to bring the threads of many negotiations and discussions to fruition in order to crystallise the complex funding package.
At present I am reliant on the Council to conclude contractual positions which we have negotiated but, as ever, Southend Borough Council have been fully supportive of Southend United’s plans. Therefore there is no reason to assume those negotiations will be prolonged any longer than is absolutely necessary, thereby paving the way for rapid progress.
With a fair wind, and subject to the above, I can see a position arising where we will be on site undertaking the bulk excavation and being able to maintain continuity of construction in the summer of this year with completion in good time for the 2011 season.
It is my intention to keep supporters fully advised as all these matters are progressed but I thought it might be interesting to understand some of the complexities behind the scenes as part of my weekly topic.
I will talk more about these issues but for the moment I hope this gives you an insight and underpins the confidence I have in making sure I not only deliver the stadium, but a development of which all the people of Southend United and the town will be proud whilst providing the foundation for fulfilling our dreams.
Until next week.
Up the Blues!
p.s If this arrived during tonight’s match that is because it takes two-three hours to “distribute” to our 28,000 email addresses. I am certainly not typing this whilst watching Millwall!!
Ron Martin
Chairman,
Southend United Football Club
