Salford council has been warned its deal to buy Salford Community Stadium could face legal barriers.
The town hall owns half of Coscos, the firm which owns the stadium and surrounding land. In February, it decided to buy the remaining half of the company from property firm Peel, which would give the council full ownership of the stadium.
The ground is used by both Salford Red Devils and Sale Sharks rugby clubs. But opposition councillors have raised concerns about the prospect of getting the deal over the line.
Conservative leader Coun Robin Garrido said there are doubts around the town hall about meeting the legal requirements to complete the purchase, and not just from councillors. He addressed the issue at a full council meeting at Salford Civic Centre on July 17, where he presented a motion to try and stop the sale of the stadium.
Mr Garrido said:
“I want to make clear that this motion is not against Salford Reds as a club, but against Salford council spending council tax payers’ money to purchase what in fact is a loss-making proposition.
“We are against the purchase of Coscos which includes the stadium, but the second part of the motion accepts that if it does go ahead, that it does not go ahead until due diligence and financial investigations have been carried out.
“We certainly have our doubts as to whether we can meet all the requirements, the legal requirements etc., and I know other people have expressed that to me – and not necessarily councillors.
“Salford Reds are an important part of this city’s sporting heritage, and long may they continue to be so. But it does not need the mayor or the city council to purchase the stadium for this to happen.”
Mr Garrido went on to raise concerns about inheriting all of the stadium company’s debt, which he said stands at £38 million. He also shared fears about a previous £1.5 million loan given to Salford Red Devils from the council, which he says has not yet been repaid.
He added:
“It’s disappointing the club has not supported us when we’ve helped them out.”
Salford Mayor Paul Dennett previously told the Local Democracy Reporting Service that selling off land around the stadium for development will make the deal feasible for the town hall.
In March, Salford Red Devils were given a £315,000 payment from the council in ‘immediate’ financial support. It came in the same month Salford council had to find £5.9 million of savings in its annual budget.
The rugby league club has previously faced doubts over its long-term future, but the stadium deal is partly aimed at improving this situation – alongside driving regeneration and investment in the area.
Coun Andrew Walters, an independent in the council chamber and leader of the Unwhipped Group, shared doubts about the legality of the deal.
His group presented an amendment to the Conservative motion to stop the stadium deal. This called for a three-year business plan to be produced about the sale.
Mr Walters added:
“I don’t know whether this is an appropriate proposal, I don’t know whether this is the right thing to do, I don’t know whether it is legally possible to go ahead with this deal, and that’s why I can’t support it.”
He asked for more information to be provided about the deal.
Coun Jack Youd, Salford’s deputy city mayor, said the deal is taking a “considerable time” because of the “amount of work that is going into it”, and that legal advice is “constantly sought.”
He said Mr Garrido’s comments about the financial aspects of the deal were “wildy oversimplified”, and that a democratic process will be followed throughout the purchase.
Councillors voted down the Conservative motion to stop the deal going ahead, and the Unwhipped amendment.
No timeline for the completion of the purchase was shared.
