Rage Online

GodalmingYellow wrote:

Dr Bob wrote:Knowing nothing about planning, nor the details of the lease with FK, maybe I am missing something, but why would we need to buy the stadium from FK in order for this to happen? If all the pieces fall into place, such that selling the Minchery Farm site for housing and related developments brings in an acceptable return for FK, surely all he would have to do was to agree to an ending of the lease the club signed?

Because there is a massive cost involved in building a new stadium and buying the land. That gets paid for by the sale of the KasStad and surrounding land.

Hi GY, sorry but that does not actually address my point. You forget, or are overlooking, that there would also be a very high cost in buying Minchery Farm, in order then to sell it in order to buy land and fund development at Water Eaton. So unless there was a significant positive margin for the club between the purchase and sale prices of the Minchery Farm site (do you have evidence, or at least a strong conviction, that this is the case?), then we return to my question - why buy it rather than just get FK to release us from the lease, he sell that land for redevelopment and we start from scratch with Water Eaton?

For me, the key question then - as others have already raised since Friday - is what the relationship is between the various co-owners of OUFC and, in particular, what their relationship would be to the club and the new stadium, should Water Eaton happen?

Dr Bob wrote:

GodalmingYellow wrote:

Dr Bob wrote:Knowing nothing about planning, nor the details of the lease with FK, maybe I am missing something, but why would we need to buy the stadium from FK in order for this to happen? If all the pieces fall into place, such that selling the Minchery Farm site for housing and related developments brings in an acceptable return for FK, surely all he would have to do was to agree to an ending of the lease the club signed?

Because there is a massive cost involved in building a new stadium and buying the land. That gets paid for by the sale of the KasStad and surrounding land.

Hi GY, sorry but that does not actually address my point. You forget, or are overlooking, that there would also be a very high cost in buying Minchery Farm, in order then to sell it in order to buy land and fund development at Water Eaton. So unless there was a significant positive margin for the club between the purchase and sale prices of the Minchery Farm site (do you have evidence, or at least a strong conviction, that this is the case?), then we return to my question - why buy it rather than just get FK to release us from the lease, he sell that land for redevelopment and we start from scratch with Water Eaton?

For me, the key question then - as others have already raised since Friday - is what the relationship is between the various co-owners of OUFC and, in particular, what their relationship would be to the club and the new stadium, should Water Eaton happen?

The point you raise is valid Bob, and as you would expect has already been thought about and is I think answered by the relative price of land with planning permission for large scale housing versus price for land next to a railway line without planning

If the new shareholders buy the KasStad, they do not need to release the club from the lease as leaseholder and tenant are one and the same.

Is there not a contractually agreed price for the stadium (and car parks?) which was in the original sale document when FK sold to WPL? At the time it was way too much and in the subsequent economic downturn was also too large; but now it looks like it could make the property a steal if the area is then sold on for housing with part of the profits used for a new ground.

That's the way I'm reading it, anyhow. FK has gone from a bloated asset to one actually worth a lot, but his hands are also tied by the fact he has a pre-agreement on the price of the stadium which is, finally, "good value for money"

Because if you have an option to buy something for a fixed £13m price which has a market value of (say) £20m then you can do one of two things - a) buy out existing lease, possibly with a financial penalty, and develop new stadium site with £13m, or b) take up option, release club from lease (with no penalty), sell the land for the market value and then develop the new stadim site with £20m in the bank

Unless the purchase/sell process takes a stupidly long time, the second option makes more sense, especially since the purchase and development of the new site, with all the planning negotiation and construction work is likely to take much longer anyway.

recordmeister wrote:Is there not a contractually agreed price for the stadium (and car parks?) which was in the original sale document when FK sold to WPL? At the time it was way too much and in the subsequent economic downturn was also too large; but now it looks like it could make the property a steal if the area is then sold on for housing with part of the profits used for a new ground.

That's the way I'm reading it, anyhow. FK has gone from a bloated asset to one actually worth a lot, but his hands are also tied by the fact he has a pre-agreement on the price of the stadium which is, finally, "good value for money"

I would have to look out my copy of the lease, but I'm pretty sure there is no pre-agreed price. I think there is an option to buy if another's offer is received. Snake is the expert on the lease.

I believe it's a licence that the club have. Not a lease.

A licence is the lowest property right you can have.

GodalmingYellow wrote:

recordmeister wrote:Is there not a contractually agreed price for the stadium (and car parks?) which was in the original sale document when FK sold to WPL? At the time it was way too much and in the subsequent economic downturn was also too large; but now it looks like it could make the property a steal if the area is then sold on for housing with part of the profits used for a new ground.

That's the way I'm reading it, anyhow. FK has gone from a bloated asset to one actually worth a lot, but his hands are also tied by the fact he has a pre-agreement on the price of the stadium which is, finally, "good value for money"

I would have to look out my copy of the lease, but I'm pretty sure there is no pre-agreed price. I think there is an option to buy if another's offer is received. Snake is the expert on the lease.

I’m no expert on it but as far as I’m aware then WPL have first option to purchase the Stadium at the price set when they took over. If someone offers more (even a quid more) then it becomes the prerogative of Firoka to whom they sell to. This could of course be Firoka (‘Stadium 2014 Co.’ for example) so basically they call the tune regardless and the buyout clause is valueless if FK thinks it’s worth more than the original set price now. And I think that it is given the recent changes in planning guidance.

Snake wrote:

GodalmingYellow wrote:

recordmeister wrote:Is there not a contractually agreed price for the stadium (and car parks?) which was in the original sale document when FK sold to WPL? At the time it was way too much and in the subsequent economic downturn was also too large; but now it looks like it could make the property a steal if the area is then sold on for housing with part of the profits used for a new ground.

That's the way I'm reading it, anyhow. FK has gone from a bloated asset to one actually worth a lot, but his hands are also tied by the fact he has a pre-agreement on the price of the stadium which is, finally, "good value for money"

I would have to look out my copy of the lease, but I'm pretty sure there is no pre-agreed price. I think there is an option to buy if another's offer is received. Snake is the expert on the lease.

I’m no expert on it but as far as I’m aware then WPL have first option to purchase the Stadium at the price set when they took over. If someone offers more (even a quid more) then it becomes the prerogative of Firoka to whom they sell to. This could of course be Firoka (‘Stadium 2014 Co.’ for example) so basically they call the tune regardless and the buyout clause is valueless if FK thinks it’s worth more than the original set price now. And I think that it is given the recent changes in planning guidance.

Is it possible that the club have the first option to buy the stadium at x price; only if they forgo the right to buy at x price is it offered to anyone at any price? In which case we may be in luck. If it's more like what you've outlined I don't see much point in the stipulation.

Eric Pollard wrote:I believe it's a licence that the club have. Not a lease.

A licence is the lowest property right you can have.

Pedant!

Not really. Just shows how poor the due diligence was when Woodstock Partners took over in 2006. Lenagan just seemingly took sockless Nick at face value.

Eric Pollard wrote:Not really. Just shows how poor the due diligence was when Woodstock Partners took over in 2006. Lenagan just seemingly took sockless Nick at face value.

Indeed I think we can all agree that the Merry takeover was shocking to say the least, but license v lease doesn't really make any practical difference to the club's position.

Having a licence most definitely DOES weaken the club's position. EG Leases have covenants, licences are very flimsy in comparison. Would be good to see a copy of the licence posted up here, I've never seen it so can't comment in mega detail on this. Has anyone? (I'm thinking of old OxXVox committee members particularly.

Having a licence most definitely DOES weaken the club's position. EG Leases have covenants for tenant's quiet enjoyment, licences are very flimsy in comparison and don't tend to have anything like this in writing.

Would be good to see a copy of the licence posted up here, I've never seen it so can't comment in mega detail. Has anyone? (I'm thinking of old OxXVox committee members particularly.

Nick Merry has seen it. Anyone know where he is?

Eric Pollard wrote:Having a licence most definitely DOES weaken the club's position. EG Leases have covenants, licences are very flimsy in comparison. Would be good to see a copy of the licence posted up here, I've never seen it so can't comment in mega detail on this. Has anyone? (I'm thinking of old OxXVox committee members particularly.

I'm not a lease expert Tim, but I don't think you are right.

A lease provides for sub-letting and exclusive use of land, whereas a license only allows for non-exclusive use of land.

The other terms of an agreement can be in either a license or a lease.

I'm sure Boogie will put us right.