Remortgage the stadium!?

[RoyalBlue]

How would you mortgage a stadium ?

It has zero value, if someone defaulted on the mortgage what would be the point in repossessing it as there is hardly a market for 24,000 seater stadia in the Berkshire area.

Dur! Clueless?!

Is the stadium built within the infamous blackhole? Does it float in the air defying gravity? Even if it has no value (questionnable) the land it stands and which surrounds it is worth a fortune. The mortgage would be taken out against that value.

Is there a need to be so patronizingly aggressive ?

The land has all sorts of issues with it and I believe had special planning permission for this particular use. It can't be redeveloped for housing, industry, office or retail use so I wonder on what basis it becomes worth a fortune ?
Would it be worth tearing down the stadium, with all the cost that involves, if all you could do was build another stadium ?
I have no doubt that you can obtain finance on just about anything but the concept of a 'mortgage' on something like a stadium just doesn't sound right. Probably just loose use of terms...

If anyone has an intelligent, informed answer it would be interesting to hear.

Apologies for being so patronizingly aggressive but your question didn't really articulate what you are now saying. As for special planning permissions, 1) are you sure they exist? I somehow doubt it, given the nature of the rest of the development in that area. 2) I suspect that, given the current economic situation, housebuilding crisis etc. it would be relatively easy to get the council/government to relax any restrictions that might have been put in place well over 10 years ago. You could get an awful lot of much needed apartments etc. on the area that the stadium occupies. So, I suspect the land which the stadium stands on is actually worth an awful lot of money and therefore could be mortgaged.

[RoyalBlue]

Isn't there more to it than just methane though. IIRC they had to install some special membrane to stop various unpleasant substances contaminating the groundwater and the brook. Presumably the stadium was built on foundations that were appropriate for that and demolishing the stadium and building something else might be quite complex.

I don't know, thanks for the insights though and I guess we'll have to wait for RoyalBlue to give the definitive expert view....

Now who is indulging in the aggresive patronizing!

Don't forget your question, itself likely to be regarded as patronizing, was 'How would you mortgage a stadium?'.

[Bandini]

I, for one, agree with their plans to remortgage the stadium in order to fund Gylfi's wages.

[melonhead]

well yeah, if its for that
no brainer

[Nameless]

Apologies for being so patronizingly aggressive but your question didn't really articulate what you are now saying.

Sorry, but thoughts tend to 'develop' rather than coming out fully formed. I accept your apology.

As for special planning permissions, 1) are you sure they exist? I somehow doubt it, given the nature of the rest of the development in that area. 2) I suspect that, given the current economic situation, housebuilding crisis etc. it would be relatively easy to get the council/government to relax any restrictions that might have been put in place well over 10 years ago. You could get an awful lot of much needed apartments etc. on the area that the stadium occupies. So, I suspect the land which the stadium stands on is actually worth an awful lot of money and therefore could be mortgaged.

Restricted use certainly applies - pretty much all planning is for specific uses. I'm fairly sure that the land at the Mad Stad has specific permission just for the stadium. We only paid £1 for it and the council would hardly have given away land they could have sold for much more to housing developers (and I know the sale meant we had to bear the remediation costs). Even if permission could be gained for alternative uses it doesn't exist now so you'd be valuing the land without permission which makes it a less less valuable than if it did have it. You also ignore the problem of it being built on heavily polluted land , which others have said may not be an issue any more but certainly was the key reason we got the site as it couldnlt be used for anything else.

Bottom line is I cannot see how anyone can claim the land is 'worth a fortune'. A piece of land that size, without a huge stadium and hotel on it, and with no environmental issues and appropriate planning might be valuable but that's a lot of if's and we're talking (theoretically ) an immediate requirement.

None of us know.

[Nameless]

Isn't there more to it than just methane though. IIRC they had to install some special membrane to stop various unpleasant substances contaminating the groundwater and the brook. Presumably the stadium was built on foundations that were appropriate for that and demolishing the stadium and building something else might be quite complex.

I don't know, thanks for the insights though and I guess we'll have to wait for RoyalBlue to give the definitive expert view....

Now who is indulging in the aggresive patronizing!

I really don't think any reasonable person would see my comment as in any way aggressive or patronizing. A mild dig in response to your rather more up front comment hardly seems out of order.

[Jay o/]

Dellor, off mic outside the ground tonight, said these rumours are malicious and utterly ridiculous. He also said the club have made a move to shut down a facebook fans page for spreading the same rumours.

[kwik-silva]

Apparently even my dad believes this. Sigh.

[Jackson Corner]

Charles Watts last night tweeted that Anton is looking to remortgage the stadium, rumoured to pay for his takeover? Charles seemed shocked and confused as he belived Anton has the option of extending the deadline of his 100% takeover.

Thoughts?

What has the Rolling Stones drummer got to do with RFC?

[Westwood52]

Sir John had a mortgage on the stadium- it is alleged he twisted the Bank's arm when he owned Auto Trader . Don't know if he still has a mortgage -seems likely though. The problem with the Club carrying the mortgage is being saddled with the interest payments against revenues-look at Man U-however there is probably not a lot of difference between owing Anton or the Bank-although I prefer the former.

That said Anton (and his Dad) are not Oligarths and probably do not have the liquidity to pay off Sir John.

I just get the feeling with this that Anton is only one financial disaster away from having to give RFC up-we would then struggle to find a buyer.Never trust big business or politicians-they will always screw over the common man if they have a chance.

And no the Council would never have the balls to agree to tearing the Stadium down and build on it-look a Coventry's problems.I think this would cause so much bad feeling in the Town- that those who passed such a proposal would have to go to Siberia.

[One8Seven1]

That said Anton (and his Dad) are not Oligarths and probably do not have the liquidity to pay off Sir John

Boris is a billionaire. Anton isn't though.

[Norfolk Royal]

Still trying to work out what an Oligarth is.

[andrew1957]

Still trying to work out what an Oligarth is.

I believe the definition of an Oligarth is an Oligarch who doesn't actually have any money. The question then is Anton an Oligarth or an Oligarch?

[melonhead]

That said Anton (and his Dad) are not Oligarths and probably do not have the liquidity to pay off Sir John

Boris is a billionaire. Anton isn't though.

Defo not oligarths though. By Jove hes got something

[Harpers So Solid Crew]

I seem to recall that RFC have a long lease on the ground that they paid one pound for. And they paid for the reclamation to get it at that price. They had a commercial loan from banks, it was less than Sir John wanted and when the money was not offered he made up the difference by loaning more himself.
Am sure AL might be able to confirm this

[Alexander Litvinenko]

Nearly right. I don't think the land was leased for £1, it was actually sold, with the condition that it was decontaminated (at a cost of £6M, so effectively it was sold for £6,000,001). Plus there was the contribution to the A33.

From the article on this : (http://www.thetilehurstend.com/2011/04/01/how-to-make-a-small-fortune-from-football-part-two/)

Of course, with the move to the MadStad the sums of money involved get much, much, higher, and the sums of £37M to build the stadium complex is often quoted. This figure is accurate, but there’s slightly more to the story than just the costs spent – as frequently the income to offset this isn’t mentioned. So let’s clarify how much the MadStad actually cost John Madejski.

The land was purchased for just £1, with the condition attached that it be decontaminated at the buyer's expense, since was an old toxic waste disposal site. This process cost £6M, and another £6M was made as a contribution towards the construction of the A33 Relief Road, another condition from Reading Borough Council. These outgoings, together with the actual costs construction of the Stadium and hotel, make up the total cost of £37M, but there are a couple of significant income items. Firstly, the Elm Park site was sold for housing development, for which the sum of £3.25M was received. (As an interesting sidenote, the instant that Reading FC relocated, property prices in the immediate vicinity of Elm Park reportedly rose by 25-30%). Sales of land surrounding the new stadium site for business use also contributed substantially to the pot, and in 1998 it was well-publicised that the overall shortfall was £10M, which John Madejski guaranteed himself.

[SydenhamRoyal]

[quote="Alexander Litvinenko"]Nearly right. I don't think the land was leased for £1, it was actually sold, with the condition that it was decontaminated (at a cost of £6M, so effectively it was sold for £6,000,001). Plus there was the contribution to the A33.

Indeed. And in fact Customs and Exercise took the view that the sale - upon which VAT was due - was not £1, but £25m due to the decontamination and A33 obligations.

[Nameless]

Nearly right. I don't think the land was leased for £1, it was actually sold, with the condition that it was decontaminated (at a cost of £6M, so effectively it was sold for £6,000,001).

The effective cost was a lot less than that as we immediately sold the uncontaminated land by the A33 for something like £3 million IIRC.