YEP:
Club seeking loan to buy training ground
« Previous « PreviousNext » Next »View GalleryPublished Date: 19 August 2009
By Andrew Robinson
LEEDS United have asked for a loan from the city council to buy back the club's training ground for around £6m.
The club sold the training facility at Thorp Arch, near Wetherby, in 2004 and an option to buy it back expires on October 10.
A report to the city council says that the club has been unable to borrow money from elsewhere to complete the purchase oADVERTISEMENTn its own.
The report says: "Due to its poor credit rating following the 2007 administration, and the effects of the recession, the club states that it has been unable to secure such borrowing.
"With time now running out if the option is to be exercised before 10 October 2009, the club has approached the council to see if finance could be made available using the council's prudential borrowing powers."
The report says there are some financial risks to helping the club but these could be minimised and "there would appear to be sound reasons for providing assistance".
The council has drawn up
two options, which will be discussed by senior councillors next week.
These are to loan the money to the club, the council taking a charge over Thorp Arch to insure itself against the risk of defaulting on loan repayments; or to buy Thorp Arch and lease it to the club.
Leeds United would buy the training ground once the club has the money.The report recommends the council starts discussions with the club.
But it warns that there is much "due diligence" to be done before an agreement can be completed.
If the council does nothing, Leeds United could continue to occupy Thorp Arch until 2029 but the rent payable is "penalistic and increases, year on year, according to a pre-determined formula", says the report.
After October 10 the club will have no rights to buy back the training ground.
The report says the training facility is an important asset for the city and that the facilities could be used in the 2012 Olympics and the 2015 Rugby Union World Cup.
http://www.yorkshirepost.co.uk/leeds/Club-seeking-loan-to-buy.5567114.jp