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Louis

Nicked From Toffeeweb

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After going through the information issued by Everton Football Club regarding the proposed relocation to Kirkby with the proverbial fine tooth comb, I am in no doubt that we, the fans, have been misled. I work in the commercial and financial field of the Construction Industry and therefore declare that I am in a better position than most to (try to) understand the costs the club have tabled to date. I will try to keep this simple.

 

The purpose of ascertaining the true build costs of the proposed Kirkby relocation is so we can use these figures as a ‘yardstick’ to assess the quality of the finished product and make a comparison to other stadia. The build cost can be split into three: the stadium itself, the fit-out of the stadium and the infrastructure. For the purpose of this exercise I will leave the infrastructure costs out of the equation, as these costs do not necessarily relate to the quality of the product, but are more relative to the individual location of the site.

 

The first thing to dispel is claims by the club and Tesco that the development is subject to huge savings from which Everton FC will benefit. The claim that Everton Football Club will get £75m worth of building costs for £50m is an insult to anyone with even the slightest knowledge of Construction Industry finances: The large contractors tender around the 5% profit mark; Building work is predominantly carried out by a ‘Main Contractor’ through his ‘sub-contractors’; Material costs are dominated by steel prices which are in a continual spiral upwards due to the economic boom in China.

 

For Barr Construction to be able to knock £25m off their price, this would mean that they work to a ridiculous 50% profit margin and would be able to knock market prices for steel and sub-contractors down by 33%. Put bluntly, this is just plain nonsense; I trust you can see this is just a completely misleading statement to make you think you are getting a better deal than you actually are. To add some facts: Barr Construction’s annual report for 2006 tell us that they turned over £211m with group operating profits being just £3.7m (or 1.7%). Do they sound like they are in a position to give away their margin?

 

Tesco have also been quoted as saying that they are foregoing their development profit of £15m. Good old Tesco, eh? Don’t be fooled… this is a misleading sales ploy, because if the club were procuring a stadium directly, this figure wouldn’t even be in the equation. This figure should therefore be ignored for the purpose of ascertaining the true cost of the proposed Kirkby ground. Unless of course Tesco are contributing an additional £15m to the reported £50m, but they are not, are they?

 

So, bar the fit out costs, it appears that we are getting a football stadium built for the cost of £50m which is being paid for by Tesco through their ‘£50m contribution’. To put this into perspective, this is roughly a quarter of the stadium build cost of the proposed Liverpool FC stadium and a third of the new Emirates stadium. This would put us in the same bracket in terms of product as Coventry City’s Ricoh Arena.

 

Notwithstanding this, and to a large degree of conflict, Terry Leahy states clearly in his open letter that the build cost of this particular stadium design is £110m. This is a decent sum of money. Granted it wouldn’t give us anything anywhere near as good in terms of quality as the Emirates Stadium or the ‘New Anfield sponsored by McDonalds’, but we could probably live with it. But if the cost is £110m and Tesco are contributing £50m, then where is the other £60m coming from? Are the fit-out costs a disproportionate £60m alone?

 

It has been stated that the sale of Goodison Park will be used to bridge the gap at a very generous £15m. That equates to over £2m per acre. Very optimistic I would say when compared to land values in the L4/L5 area. The only way I suggest they could get near that figure would be after planning permission for a very attractive development was given, thus requiring the help and cooperation from LCC, who themselves will be under pressure from the local community to promote a development to cater for their needs. Not a very likely scenario, I suggest.

 

So the club would still have to find another c.£50m in addition to the ground sale. A Naming Rights deal, believed to be around £20m, has been mentioned, but this usually involves staged payments over a short-medium term, meaning the club would have to take on debt to cover this. A Naming Rights deal is obviously not restricted to Kirkby either, this type of deal could also be used to help finance a redevelopment of Goodison scheme, for example.

 

To surmise, I suggest the proposed Kirkby relocation will leave us with only one of two scenarios:

 

1. A very poor stadium of Reebok or Riverside quality that has cost c.£70m and left us with little debt

2. An average stadium (compared with the top premiership grounds) costing over £100m that has left us with at least £50m of debt

 

If it is scenario (1) then I think all fans who voted ‘yes’ to Kirkby will be disgusted with the club and feel duped as we have been guaranteed by the club and Terry Leahy that we will receive a ground worthy of our unique stature and history.

 

If it is scenario (2) then I feel most fans will feel that they have been misled regarding the club’s debt. I’d guess most fans who reluctantly voted ‘yes’ would have preferred to see the £50m of debt pumped into redeveloping Goodison. You can do a heck of a lot with £50m in terms of overhauling and redeveloping an existing structure. The fact that this same sum of money can allegedly build a brand new 50,000 seat stadium should make that clear enough to any sceptics.

 

But Everton Football Club have told us, categorically, that you can’t redevelop Goodison… or was this just a lie to pressure you to vote ‘yes’ for Kirkby? We have all seen the drawings and models produced by Tom Hughes and aided by Trevor Skempton, who was the guy behind Newcastle United redeveloping St James Park in lieu of moving outside the city to a new ground in a retail park (St James Park is the best stadium in the premiership in terms of quality, location and history, in my humble opinion). The club have arrogantly dismissed these works through a very cloudy and completely unsubstantiated press release referencing comments from a so called ‘expert’.

 

Why should you disbelieve the club though? Well, this same club went to great lengths not so long ago to show you how you can redevelop Goodison. Not just one option either, they gave you a second option as well. Anyone who has forgotten, not seen or mislaid the brochure that accompanied the Kings Dock vote [1.2MB PDF]should take a look — it makes very interesting reading. Can you get better proof that the club has blatantly misled about being able to redevelop Goodison?

 

To add weight to the redevelopment of Goodison, Gwladys Street Primary School is now part of LCC’s ‘Building Schools for the Future’ project. Everton FC obtaining this site for redevelopment would be a formality, if they wanted it.

 

Furthermore, our red cousins down the road are already commissioning a multi-million pound infrastructure upgrade in the city which will include, amongst a host of other things, several park and ride sites across the city, pedestrian walk routes and coach parks near Stanley Park. Likely to follow is an upgrade of the rail service to the L4 area. If Everton redeveloped Goodison they could use all this without spending a penny.

 

I don’t know about you, but I want some real answers…

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