More risk for taxpayers as restaurant providers play hard to get
There is little new in an update report on the Community Stadium which will be considered by the Council next week.
It says final contracts will be signed this month.
We will see.
The report does admit that expected leases for some of the commercial property (restaurants) included in the project have not been completed. This means that, potentially, taxpayers could lose around £1.4 million compared to the figures quoted earlier in the year.
In July the Council admitted it would get a lower price (£10.76m) when it sold the land for the southern block and the lease on the east stand restaurants.
That was £2.6 million less than forecast in March 2016.
It is that sum that is now, potentially, being further eroded
The Council claims that this might be offset by increases in income later in the life of the complex.
The stadium itself is being paid for by section 106 contributions. It is the neighbouring sports and swimming facilities which have become a financial deadweight.
Too late to make any major changes now though.
The Council claims that the stadium will be ready for use in June 2019.
A new report to the Council’s Executive confirms that the builder has pulled out of the GLL led consortium which was to have constructed and run the new Community Stadium.
Contracts for the sale of commercial elements also haven’t been signed.
The report says, “Until legal agreements can be concluded, a risk remains that the Investment Fund could look to alter the terms of the proposed deal. This could include a reappraisal and increase or reduction in the Capital Land Receipt to the Council. Should the Capital Land Receipt reduce from that set out in the March 2016 this would have significant effects to the overall financial position of the Project”
Commenting on the need to appoint a new builder the report says, “Council instructions to GLL have been very clear in that any revised Construction Cost from their Building Contractor re-procurement must meet the existing approved March 2016 budget. However, until GLL have received final revised Building Contractor cost submissions there remains a risk that the Construction Cost could differ from that presented in the March 2016 Executive Report”.
Despite these issues, the Council says, “Stadium and New Leisure Facility built and operational by late 2018”.
The report does not say whether – in the light of the continuing high risk level of the project – a contingency plan has now been developed which might still see some sort of investment in a new stadium undertaken.
Around £12 million, of the original Section 106 developer contributions to the stadium project,are still held by the Council.
Project disappears from “to do” list
Every six months a committee at the York Council looks at the progress being made in delivering major projects. A report is being presented on 14th November to a scrutiny committee which lists all the major projects in the City.
Most of the major plans of the Council are listed.
Schemes listed for consideration at meeting on 14th November
We learn that the plan to improve the northern by pass has a “red alert” attached to it, meaning that progress has stalled. Perhaps more surprisingly we are told that there is now nothing to prevent the Guildhall project from being fully implemented (other perhaps than the small matter of financial prudence).
However there is one major omission from the list.
The £44 million Community Stadium project.
When the committee was last updated in May details of the stadium project were included.
Stadium timetable presented to a scrutiny committee in May
By now builders should have been on site but, of course, the project now faces a “judicial review”.
We think that there are some questions that backbench Councillors would want to ask about this project. There are hundreds of jobs hanging in the balance.
We wonder if there is an even more serious precursor of failure than a “red alert”?