Liverpool City Council is set to agree the principles of an innovative finance model with Everton Football Club that will support the Premier League club’s ambition to build an iconic waterfront stadium in the city.
A report will be presented to the council’s cabinet next Friday (31 March) recommending that the City Council progress Heads of Terms to create a new Special Purpose Vehicle (SPV) company which will take a lease of the stadium from a funder and, in turn, sub-lease it to the club.
Earlier this week, Everton and Peel Land and Property agreed Heads of Terms to acquire a site at Bramley Moore Dock – which forms part of a £5bn Liverpool Waters scheme – from Peel, subject to planning consent.
The announcement follows detailed negotiations between Peel and Everton Football Club, brokered by the Mayor of Liverpool, Joe Anderson.
The recommendation being presented to the council’s cabinet follows months of talks between the local authority and the club and following advice from independent financial and legal experts who have reviewed Everton’s “robust business case”.
Under the proposed finance structure of the SPV (Please see notes for an explanation on the terms) the council will not provide any finance for the new stadium, which is anticipated to cost in excess of £300m and will be fully funded by the club.
The council will benefit from an annual security fee payable by the club in return for the council’s participation. Critically, the support provided to the club will not impact the future borrowing needs and involves no financial outlay for the council.
The proposed stadium will be a catalyst for economic regeneration and job creation in north Liverpool and would complement the council’s proposed £100m regeneration drive in the surrounding area, which includes a new Cruise Liner terminal and the recently launched masterplan for the Ten Streets area.
WATCH: Mayor Joe Anderson on the new Everton FC stadium
Mayor of Liverpool, Joe Anderson, said: “I’m delighted that we have got to a stage where the city and Everton can publicly share the vision for the club’s potential new home at Bramley Moore Dock.
“I understand that creating this financial arrangement is a small step in a long journey for the club, but it is the first step and for that reason it is a special moment in the city’s – and Everton’s – long illustrious history. If things progress as we all hope, it marks the beginnings of a new and exciting chapter.
“The proposed new stadium will be a landmark for the city’s spectacular north Liverpool waterfront and a powerful statement of intent for the club and the city of Liverpool that will resonate globally.
“From the city’s perspective, the stadium would complement and accelerate the regeneration plans already in place for north Liverpool, much like the way our partnership with Liverpool FC in the Anfield Project did for their stadium expansion which has benefitted the wider Anfield community.”
Robert Elstone, Chief Executive, Everton Football Club, added: “Over the past year, the club has worked with the support of the council and we are grateful for the ‘can-do’ approach that has got us to this important milestone. We are particularly grateful for the role the Mayor has played to date in our talks with Peel and for his support in this important step in the journey towards reaching a funding solution for the stadium.
“We are delighted that we have been able to agree Heads of Terms with Peel, giving us control of the Bramley Moore Dock site and allowing us the time we need to complete the substantial further work required to be able to confirm the project’s viability.
“We can now move forward into the next phase of work with much greater confidence. Clearly, it is vital we have clarity on cost and we have to recognise that the stadium will be significantly more expensive at Bramley Moore Dock. To get that certainty, and ensure the stadium is affordable, we need to confirm stadium design, capacity and configuration. And to do that, we need to talk to fans, partners and all stakeholders in the project. We’re committing to that consultation. We’re also committing to keep fans fully informed as the project develops and as other milestones are reached.
“We’re keen to stress not only the scale of the work ahead but also the remaining risks and uncertainties. We’re delighted we’ve secured the site and we’re equally delighted the Mayor is continuing to support our financing model, but significant hurdles remain, not least the preparation and submission of a detailed planning application. Receipt of a successful planning approval at some point early next year will be the most significant step towards bringing the stadium to life.”
Today’s announcement follows on from Peel’s declaration at the MIPIM Property Conference last week of other deals totaling £300m of investment in the Liverpool Waters scheme.
Lindsey Ashworth, Director of Development at Liverpool Waters, said: “We are delighted to have agreed Heads of Terms with Everton Football Club regarding the development of a state-of-the-art football stadium at Bramley Moore Dock.
“It’s been an exciting and progressive couple of weeks for Peel, first unveiling our vision for the new Central Docks neighbourhood at Liverpool Waters and now reaching an initial agreement with Everton for a new waterfront stadium.
“It’s important to remember that this is the start of a long process and we will be working very closely with Everton, Liverpool City Council and Historic England to better understand the site and develop the proposals. As the current owners, we have a level of knowledge and experience of the site which we believe will help Everton deliver not just a new stadium but a stunning addition to Liverpool’s northern waterfront.”
Subject to approval being granted by cabinet, the council will finalise the detailed Heads of Terms over the next three months which will then allow the club to progress with the preparation of a planning application.
NOTES:
Proposed Heads of Terms for the Special Purpose Vehicle (SPV) company:
- A funder will acquire a 200-year Head-lease of the land for the new stadium from Peel Land and Property.
- The Funder will lease the stadium for 40 years to a SPV, a company set up, owned and controlled by Liverpool City Council.
- The SPV will sub-lease the stadium to Everton FC (EFC) for 40 years, less one day.
- EFC will provide an annual rent to the SPV which will allow the SPV to pay its rent in full to the Funder and to receive an annual fixed security fee on top of that.
- EFC will also provide a full Security Package that will create new bank accounts into which certain EFC incomes will be credited to deal with an eventuality of non-payment of rent.
- At the end of the 40 year lease terms, EFC will have an option to acquire the Head-lease from the Funder.