Club Statement: Freehold Purchase

Easements or covenants?

Anyway, even if Argyle moved, the covenant is not going to be dead.  Wasn't the land given to the people of Plymouth for 'sporting purposes'?  If so, until Plymothians give up all sport, the land isn't going to be dead.

But you do bring up a really good point:  

MikeWN wrote:

Does anyone actually know what covenants are in place, and who the beneficiaries are? The info will be held by the Land Registry - I think it's £7/document, from memory.

Brings me back to my early days on Pasoti:

The mantra was...  Home Park belonged to the council (people of Plymouth) and could never ever be sold!  No doubt about it.  100% fact.  End of...

I asked one day how everyone seemed to know this to be true?  Well Andy Angry, Boris (SFD),  De Liar and the rest of the Pasoti brown shirts had a field day.  Was I an idiot?  How dare I even ask such a question.  Was I living under a rock?   I was ridiculed, taunted and made fun of in their usual way...

Cut to six months later...

Someone pops up out of nowhere and announces the council are going sell HP to Stapes et al!
The unknown poster is called a troll and shouted down by all the usual suspects.

One week later.

The council and the club announce the news.



The Pasoti sheeple wrong again.

When Simon Hallet became an Argyle fan again after a forty year break, he said he was not interested in property and only investing in Argyle to help the community.... well Si how come you are now buying a much loved local asset at a knockdown price? is this helping the community New Jersey style?

Back in 2007, I wandered down to the Land Registry to get a copy of the restrictive covenants covering Home Park. The important ones in terms of use are as follows:

Not to cause or permit the Property or any part thereof to be used for any purpose other than as a Professional Football Stadium with other uses
associated therewith, namely: offices, storage, temporary accomodation, leisure uses (where uses are integral to the stadium), restaurants and bars, the retailing of sports and leisure uses (where uses are integral to the stadium), sports clubs, public entertainment or education and for
the holding of shows, conferences and events and also for such other associated purposes as the Transferor may approve,

and,

Not to cause or permit any development to be carried out on the Property or erect any buildings or structures other than as the Transferor may approve in writing (such approval not to be withheld or delayed)

There's a further one which refers to the existence of a study support centre, which has to remain until the ground is redeveloped.

I don't know if any of these have recently been removed.

No mention of Dentists then?

sufferedsince 68 wrote:

PlymptonPilgrim wrote:

I've said it before and I'll say it again. When an ex-banker who has no interest whatsoever in football and has never been to a football match gets his hands on a football club on the cheap, it isn't for the love of the club or that he has a burning ambition to take PAFC into the Premier League.

He is in it for profit, nothing more nothing less. A less philanthropic gentlemen than James Brent, you would not find anywhere outside a financial institution.

The club statement is full of warm words and ambiguity. Do not trust James Brent or this current board. I do not believe they have the best interests of PAFC at heart.

Great post pp, Brent is not an Argyle fan he's a fan of money the same with Hallet, if they get hold of the freehold to Homepark Argyle will soon be back into Administration unable to pay the rent on the ground.

Exactly.

Our Guile wrote:

I disagree with that. I acknowledge that last time around the straw that ultimate broke the proverbial camel's back was the club's inability to pay it's creditors. An inability to service its debts, including the various mortgages on the ground, certainly contributed to that. But looking in isolation at the debts that were secured against the ground, they should really have been manageable. The real issue behind the cashflow problem, in my opinion, was the reported 80%+ wages to turnover ratio. That's just not sustainable.

Had that ratio been kept at a lower, more sensible level, the rest of the club's obligations to its creditors should have been easy to fulfil.

Given the 55% salary cap that's in place now, I think it would be significantly less risky to mortgage the ground now (if the club buys the freehold, and if they choose to raise funds for to redevelop the grandstand by using the ground as collateral for a loan - which seems like a likely scenario, imo).

From what I remember a large amount of the debt built up last time was over the failed world cup bid, and the plans for a 50k stadium. It was never got to the bottom of, and I suspect there was a lot of fishy stuff going on regarding third parties being employed on contracts to do various jobs, large loans being taken out etc. I think there was £10m of something in 'other costs' listed in the administration document while the whole debts of the club was something like £15m, built up in just 2 years. A lot more going on then just some high wages. Akkeron don't have to pay footballers wages for their other development projects, and yet have still run into problems.

Our Guile wrote:

Flat_Track_Bully wrote:

A lot of Akkeron businesses have recently folded, and Brent's other 'development' projects seem to be stuck for one reason or another. That doesn't signal to many fans that Akkeron are necessarily a safe owner of the stadium. Even if they were, should Akkeron decide to sell the club (and therefore the stadium with it) then who know why might get their hands on it.

Can't argue with the first bit of that - Brent's recent development projects haven't gone well, by anyone's standards. And I agree to some extent that, on the basis of those failed projects, Akkeron probably aren't the most desirable owner for the stadium. But, fortunately, Akkeron won't own the it. PAFC will. And Akkeron can't sell the club, nor the stadium (which would become an asset of the club, not Akkeron) because they only own 2/3 of the company that owns the asset. They can conceivably sell Brent's 66% share of the club, but only with the consent of the other shareholders.

There's precedent at other football clubs for someone buying a non-controlling interest and then persuading/bullying/bribing enough other shareholders in order to get to the required %age. Either way Akkeron would only need one other of the main shareholders to agree with them and the club can be sold, not exactly unlikely. Also we don't know whether this release of shares in relation to buying the ground might change the ownership %age.

Even earlier this year Brent said he was 'open minded' about selling the club:
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sufferedsince 68 wrote:

When Simon Hallet became an Argyle fan again after a forty year break, he said he was not interested in property and only investing in Argyle to help the community.... well Si how come you are now buying a much loved local asset at a knockdown price? is this helping the community New Jersey style?

Not so!

I suggest you (re)read some of Simon Hallett's answers in the Q and A session, shortly after he came on board: [You must be registered and logged in to see this link.]

"...
Q1: As a major shareholder do you support the purchase of the freehold by the Football Club?

I’m not yet certain about it, though as a rule, I think Clubs should own their ground. As you suggest, the numbers suggest that buying the ground would gives an immediate 8% return (from the rent saved), and it is possible that financing costs could be less than that. So, it would probably make sense in terms of net cash flow.

...

Q3: If it were adequately demonstrated that the purchase of the freehold of the Stadium was against the wishes of a substantive proportion of the fanbase would you still support the principle of the purchase and its execution?

Let us generalise the question - If it were adequately demonstrated that any policy decision that you supported was against the wishes of a substantive proportion of the fanbase would you still support it?

The answer is, “Yes”. I believe more strongly than most that input into decision-making from all parties (particularly from those who disagree) is desirable; I also believe that decisions are best made by those who are held accountable for them. That is the Board. Our job is to make tough decisions. Sometimes they will be unpopular.
"

Our Guile wrote:

The way I read it is; there's nothing to stop them transferring / selling the freehold to a third party, but if they did, that third party would be bound by the perpetual covenant that's in place. So the ground will always be a sports stadium unless both the owner (PAFC, or any third party to whom it's subsequently transferred / sold) and PCC explicitly agree otherwise, AND planning permission is approved for a change of use.

Clearly there remains some scope for the ownership of the ground to be separated from the club in the future. But, given the above, I think it seems pretty unlikely. For example, there could be a scenario where the club sells the ground to someone else, and then the club pays them rent to continue using it (because it has to remain a sports stadium, so the buyer couldn't really do much else with it). But I can't really see any commercial benefit, to either party, if that happened. And even if that did happen, it would be PAFC's decision (not James Brent's) to sell their asset, and any money made from the sale would go to PAFC (not James Brent).

It also leaves open the possibility that, with everyone's (PAFC's and PCC's) agreement, the club could theoretically sell the ground to a third party who could then seek to revoke the covenant and develop it for something else (retail, residential), leaving PAFC with the cash from the sale to fund the development of a new ground elsewhere in the city. I am not sure that's ever likely to happen, but it would theoretically be possible, I think.

Even if you believe there's no difference between JB and PAFC in terms of decision making and/or who benefits financially, it seems to me that there is an additional layer of protection in place via the covenant and PCC. So it's not just a case of whether or not you trust James Brent.

As a footnote; I am sure my post will (rightly) be treated with suspicion by some posters because it's the first post I have made for a long time. I've been a member of this forum for many years (since 2012, I think) and I have been a regular reader throughout that time. I am also a member of (although not a regular poster on) pasoti. I think the subject of the freehold purchase is interesting because it has really polarised opinion, with this forum being almost entirely against the purchase, while the majority of the people supporting the purchase seem to be on pasoti.

I was initially against the purchase, for the reasons put forward in Graham Clark's 'Never Again' statement. The club's statement yesterday has changed my mind. I am now (cautiously) supportive of the proposal to buy-back the freehold. I'd be interested to know if yesterday's statement changed anyone else's mind? And that's a genuine question; I am not trolling or agitating. I would really like to know if the club have managed to change people's opinion on this - especially posters on this forum who were (are?) almost unanimously against the freehold purchase.

Wow, great summary, that's almost exactly where i'm at with all this too. Still reading through this thread and I'm yet to see any 'road to Damascus' conversions here... but then with the best will in the world I never really expected any

Where we differ is our conclusion on the 'two statements'. You've come down in favour of the purchase but, unusually for me, I'm still on the fence. It does come down largely to trust and that's why PASOTI will be broadly persuaded by the club statement and ADT the 'never again' statement. I see persuasive arguments in both statements but just can't help feel we better 'future proof' ourselves by retaining public ownership of the ground. It'll surprise no-one here that I don't find James Brent as untrustworthy as them, but even so, he won't be the owner forever and my fears are about who comes next.

That said the economic case for buying it back is a no-brainer. The rental cost, especially if we go up the leagues (I know, I can hear the coffee being spat at monitors at the mere thought of that being a possibility ) makes 1.7m now and then no rent thereafter the bleedin' obvious thing to do. That money 'wasted' on longer term avoidable rent is the very same money those who don't buy into the self sufficiency model will bemoan not being spent on players...so i'm not sure you can have it both ways.

It's still not enough for me to come down in favour of it though, even marginally. I guess it's going to be one of those decisions best reviewed in hindsight. We could look back and see it as the best decision we ever made, we could look back and see it as the worst decision we ever made. As a generally cautious sort I fear the latter every bit as much as I crave the former.

Our Guile wrote:

Chancellor wrote:

Our Guile wrote:

I have absolutely no insider knowledge of the clubs articles or the shareholder agreement. But you can't sell what's not yours. Akkeron only own 2/3 of the club, so that's all they can sell. It's normal for other shareholders to retain first refusal should a shareholder wish to sell or transfer their shares. It's also common for the sale or transfer of shares to a third party to require the approval of the other shareholders.

I can't be certain that is true for PAFC, but it's fairly standard practise, I think.

Its actually normal for any shares to be offered back to the other shareholders or indeed the company first and only then to be offered for resale outside the "group". "Only" owning 66% is plenty enough for control of a company.

50%+ would give you effective operational control. But ordinarily you can't change the company's articles unless you have 75% of shareholders' in agreement - which means with 66% you can't change the rules pertaining to the sale or transfer of shares. So, as I understand it, JB can't sell his 66% share to a third party without the approval of (at least 9% of) the other shareholders.

Being slightly flippant as you put it, the Articles can be whatever you want them to be so to claim that 75% of shareholders need to approve any amendment is pure conjecture. Unless you know otherwise, which I suspect you do.

As you say, the articles can be whatever you want them to be. But the actions requiring 75% of shareholders' approval are a well defined part of what constitutes a limited company.
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I have no knowledge of the articles of PAFC Ltd.

You seem to think you know who I am... sorry to disappoint, but I'm not anyone important or interesting. Just a normal fan. And I'm pretty sure you don't know me.

Heavy rain tomorrow will keep the supporter away from the meeting. Nool and his senior green army will have the tent to themselves

Tgwu wrote:

Heavy rain tomorrow will keep the supporter away from the meeting. Nool and his senior green army will have the tent to themselves

Good job that the meeting is next Saturday then, 10th September

BBC1 wrote:

Tgwu wrote:

Heavy rain tomorrow will keep the supporter away from the meeting. Nool and his senior green army will have the tent to themselves

Good job that the meeting is next Saturday then, 10th September

With a bit of luck Jameson will be there as well............

BBC1 wrote:

Tgwu wrote:

Heavy rain tomorrow will keep the supporter away from the meeting. Nool and his senior green army will have the tent to themselves

Good job that the meeting is next Saturday then, 10th September

my apologies, must be this fever I have