Proposed deal which will see South Somerset District Council purchase Yeovil Town Football Club property is approved
A proposal which will see South Somerset District Council purchase and lease back property owned by Yeovil Town Football Club including Huish Park has been approved.
Councillors on SSDC’s District Executive committee met today (3 December) to consider the investment as part of a proposal to not only ease financial pressures on the club but also to benefit communities across the district.
The club’s short-term financial concerns have been caused by the Coronavirus pandemic, with crowds prevented since March from attending National League matches for public safety and now continuing to be limited by COVID-19 restrictions.
The proposal will also give YTFC the option to buy back the land the club occupies in the future when its financial outlook has improved.
Council Leader Val Keitch said: “The decision to approve this proposal was made today following a detailed and thorough debate which was quite right given its importance.
“We have agreed to make an investment that will not only benefit a football club which has such an important role to play in our community but one which will also benefit our residents.
“It is our responsibility to ensure we offer any support where we can to businesses big and small, which we have done before and throughout this pandemic, and we will continue to do so.”
John Clark, Portfolio Holder for Commercial Strategy added: “This commercial investment has been analysed with the same rigour as all our commercial investments, and meets the Council’s requirements for return on investment at an acceptable level of risk.”
Approval of the proposal was welcomed by YTFC chairman Scott Priestnall who said: “I would like to thank the officers at SSDC for their time and effort in putting together the proposal to buy the stadium and land at Huish Park.
“Being a chairman and owner of a football club is very different to operating other businesses and as a custodian of this fantastic club, I feel it is my duty to not only ensure its survival during these difficult times but also to give it the future the community and the supporters deserve.
“I would finally like to thank local councillors for their time and support today and I look forward to moving forward with SSDC and working with our supporters’ groups to deliver the best possible future for Yeovil Town Football Club.”
What are the details of what is proposed?
South Somerset District Council has been providing a wide range of support to businesses that have been impacted by Covid-19 including helping to issue millions of pounds in grants. This is with a view to protecting our local economy and jobs.
Yeovil Town Football Club approached South Somerset District Council regarding the difficulties it is facing during the pandemic and our commercial team investigated options which benefited both the club and South Somerset residents.
It is the only professional football club in Somerset and it makes a significant contribution to both the local economy and more widely in terms of community, education and local civic pride. This includes the community impact of the club’s charity, the Yeovil Town Community Sports Trust, which strives to make a positive difference for all through sport and learning for thousands of local people through its work with local schools and its own Soccer Schools.
But the COVID-19 pandemic has directly caused the loss of virtually all spectator revenue for the club. While the club has sought to reduce its cost base, the remaining costs are likely to lead to significant financial issues in the near future.
SSDC plans to purchase the entire freehold and leasehold property and land interests held by Yeovil Town Football Club in the Huish Park ground.
The current 999-year lease from SSDC to YTFC (on land currently owned by SDDC) would be extinguished and a new 30-year lease of the whole property would be simultaneously granted back to the club. Part of the purchase price would be applied to securing the release of restrictive covenants that affect the title to the property.
Crucially, SSDC will not own or be becoming a shareholder of the football club.
Instead, Yeovil Town FC would become a tenant of the council in a similar way to the other companies who are commercial tenants of the council, such as B&Q, Marks & Spencer and Go Compare.
The arrangement follows that set for all other commercial tenants of the council and the investment has been assessed using the Council’s normal investment criteria.
However, given the substantial community interest in such a potential investment, it was considered important that the District Executive took this decision, rather than it being taken through the Council’s normal commercial investment process. All the risks of this investment, as with all our commercial portfolio, have been carefully assessed.
It will also benefit residents as the investment will provide a yield of around 7%, which is line with the approved target level of commercial returns on investment property assets purchased by the Council. The income generated from the investment would be reinvested in services and projects which benefit our communities.
Terms of the proposal remain confidential while commercial negotiations continue but details will be published when these have concluded.
What happens next?
The proposal will give the club a chance to improve its prospects for recovery and the structure of the deal enables the club to continue to pursue the potential for developments at the Huish Park site, in order to secure its position in the long-term.
Work will begin immediately with YTFC on the details of the investment and moving it towards completion subject to the registered community asset procedures.
As the site is a registered community asset Yeovil Town Supporters Society Ltd will be given the opportunity, prior to any sale of the registered property, to consider if they wish to have the opportunity to prepare and submit a bid. However, if any written intentions are received, this could cause a delay to proceedings of six months during which time the club could face more serious financial difficulty. The club and the council will continue to work with the Yeovil Town Supporters Society and keep it fully informed.
Why is the council making investments?
Our innovative commercial strategy, which includes commercial investments, generates income which enables the council to protect services to residents in the light of reduction in Government funding and to deliver its ambitions for South Somerset, for example the regeneration of town centres and high streets.
Every investment is rigorously assessed to ensure it offers the best possible value for South Somerset residents and that it passed all of our risk tests.
While COVID-19 has restricted the number of new investments we make as we keep the future strategy under review while the economic picture becomes clearer, the investments we already hold continue to provide substantial income to benefit our communities.
How else is SSDC supporting businesses at this time?
A wide range of support is available through SSDC or from the Government. More than £40M in grant funding has been issued by SSDC to thousands of businesses and organisation to support them through this crisis and further grants are available now.
Please visit our website at www.southsomerset.gov.uk or get in touch to find out more about how the council and the government can support you.