We have been gathering together a number of the most commonly asked questions regarding the acquisition of the Racecourse lease from social media and direct emails to the WST. The following questions were put to Gavin Jones, Club and WST Board member and lead negotiator on the lease with the University, on the Dragonheart radio show on Calon FM earlier today. We are now adding the answers below which will hopefully cover the points raised prior to the closing of voting on Tuesday March 29th.
1. Why not just buy the ground?
It was the WST’s favourable option but Glyndwr would never sell the freehold. The second best option then was a 99-year lease which is the closest thing to a sale.
Glyndwr stated they wish to have a say in what becomes of their neighbouring property.
2. How much will it cost us to stay at the Racecourse next year if we don’t take on the lease?
Initial discussions with Glyndwr suggest they would require circa £350k.
In previous years we have only paid a percentage share of stadium and Colliers’ cost that’s called the service charge. Next year, Glyndwr have said they also require a rent or ‘licence’ fee to be paid above the service charge which was always in the agreement.
3. Can we afford to pay for all the repairs necessary?
I’d like to think we could pay for the repairs because we would be in control rather than the University performing the work and passing us a share of the bill.
Also we would be in control of the timing of the work rather than the University and we’d have access to a fuller range of contractors/etc.
4. A hundred years at 100k is ten million pounds. Why are we paying that much for an asset only worth £1.4 million?
Not wishing to get too technical but there’s a term called the time value of money when you discuss mortgages. Quite simply a £1 in 10 years’ time is worth much less than a £1 today. When you perform the maths you find that 100k over 99 years is actually worth £1.35m in today’s money.
If you actually add up your own mortgage monthly payments over 25 years and compare it to the price you actually borrowed, you’d find you pay much more.
5. The proposal is a 99 year lease at £100,000/year, for a stadium valued at around £1,350,000.Assuming a 6% interest rate (way higher than current rates), a 30 year mortgage would cost less than £100,000/year, and would be a third of the price in the long term. Why don’t we get a mortgage?
You mustn’t compare commercial/corporate rates with retail rates.
7.5% is a good commercial rate – we’ve had this validated by our valuer.
We have had included into the deal a financial facility to pay the mortgage off over 30 years if we choose, it will just require more money to be paid up front. If we had some football fortune we could reduce the mortgage debt considerably just as you’d pay a lump sum off your house.
6. No-one knows what the community share fund stands at or is even being used for. Why couldn’t we use it as a vehicle for the purchase of the ground?
The community share fund is a great vehicle and it could be used to pay chunks off the mortgage.
To date, the community share fund has paid for the club shop and helped toward the cost of the frost covers.
7. Is there any way with the lease deal that we could get a clause put in that if we did get into better financial territory there would be an option to buy the ground out at asking price minus what we have paid on the lease or something to that effect?
We’ve asked and asked for the right to purchase the freehold. Glyndwr don’t wish to sell.
This could change in the future – who knows? For now, it’s not on the table.
8. Who is responsible for the rates? Is it incorporated in the Lease?
Typically, in commercial landlord and tenant arrangements it would be the tenant, that’s us, to pay the rates.
At present, we in effect pay a large percentage of the rates now through the service charge.
9. Will we eligible for Government grants to rebuild the Kop and GUS stand?
Hopefully, that why as we speak we’re arranging meetings to discuss options with grant providers.
10. The Centenary club is still going to be the student union. Will WST members be able to go in there once we own the lease?
I think of it the other way around. The Trust will own the Centenary club (for 99 years) and the students’ union will be very welcome to the Cent as they contribute to the viability of the pub/food offering of the business.
For events, the students, like WST members, and members of the public will be able to hire the facility for private functions.
11. Will the Crusaders still play at the Racecourse, and will they pay the club?
Nothing has been discussed with the Crusaders to date. If the lease is past by the members, then I’m sure negotiations will take place with the Cru, to obtain a deal mutually beneficial to both parties.
12. Will the money from the Stereophonics concert go to the club?
This news come to the football club at the eleventh hour and took us all by surprise.
This is part of the detail that is being presently negotiated with the University.
13. Why has a new company been formed to own the Racecourse?
I’m sure the answer to anybody who has followed the infamous history of Wrexham and its relationship to the Racecourse in recent years should be clear.
By splitting the ground away from the Football club would make the long term future of both the football club and the stadium far more secure. The split should keep away unwanted interested parties such as the ones we’ve had in our recent past as it would make it difficult to take the Racecourse away from the club as what happened 12-13 years ago without members knowing.
14. What will be the status of Colliers' Park? How much will it cost us to use it?
The club had a deadline to meet for its league application as the present license is unsuitable for entry into the Football League. The deadline by chance also coincided with the University’s timescales.
We did begin discussing Colliers at the outset but found the Racecourse negotiations were more than a challenge and due to the imposed timescales, we agreed to discuss Colliers after the 31st March.
15. When does the Glyndwr shirt sponsorship end? Will it be renewed? Or do we have someone else lined up?
The front of shirt sponsorship finishes at the end of the season, so does the stadium naming rights and stand naming.
At present the University has declared no interest in renewing.
We see this as a fantastic chance to make heavy inroads to the £100k/annum lease payment and would encourage Wrexham fans to be helping us look for potential lucrative sponsorship for these premium marketing opportunities.
16. What happens to the catering and bar contracts? Do we have to continue them?
We’ve detailing all the present Glyndwr contracts not just catering and beer ones. They all have a variety of terms and different time horizons. We will need to honour the contracts but once they expire it will be up to us as to what we wish to do.
It’s also important to stress that any money spend at the Racecourse will directly benefit the club.
17. Do we still have to use 'Glyndwr approved' contractors while they still own the ground?
No. The Wrexham Supporters Trust, not wishing to cut corners by any means, would have the scope for leveraging relationships within the club for labour and have opportunities to contra advertisements for building materials/etc.
The full Dragonheart Podcast can be heard HERE
There is a special general meeting of the Wrexham Football Supporters’ Society Limited (Wrexham Supporters Trust) to be held at The Catrin Finch Centre, Glyndwr University, Off Crispin Lane, Mold Road, Wrexham on Tuesday 29th March 2016 starting at 7:30pm.
The purpose of the meeting is to consider a proposal by the WST Board to enter into a 99-year lease with Glyndwr University for the Racecourse Ground -the home of Wrexham Football Club since 1864.
This is a hugely significant decision and a landmark in the proud history of our Club. After much consideration and lengthy negotiations, the Trust Board recommend that members ratify their proposal to enter into the lease with the University. Whilst we do not underestimate the challenges ahead, the Board are unanimous in the view that this represents the best and most sustainable opportunity to secure the Club’s tenure at our historic stadium for the long term.
The agenda for the meeting is as follows:
2. Presentation by the Board in support of the resolution to enter into a 99 year lease for the Racecourse Ground.
3. Questions from the Floor
4. Voting on the Resolution
5. Announcement of Result
6. Any Other Business
There are documents which provide the details and background to the resolution:
a. “The Racecourse” –this document provides the background to the Board’s recommendation and introduces other documents.
b. Valuation Advice letter from GVA Billfinger -specialists in the valuation of football stadia. (Gavin Brent letter)*
c. The Racecourse Ground Heads of Terms legal agreement
d. Commercial Heads of Terms legal agreement.
e. The full document of the GVA Bilfinger Valuation
These documments are available HERE
Members who are unable to attend the meeting in person can still vote on the resolution either by completing the form of proxy (included in the postal pack)which must arrive at the Trusts Post Office Box Address by 12 noon on Tuesday, 29th March 2016 or by voting online HERE. Online voting also ends at 12 noon on Tuesday, 29th March 2016