secret joint venture plan for wembley

Secret joint venture plan for Wembley
John Waples

THE English Football Association is in secret talks that could result in the ownership of Wembley stadium being transferred into a joint venture with a British property company.
The radical proposal is one of a series of options being discussed between Brian Barwick, the FA’s chief executive, and Quintain Estates, a quoted property company that already controls a 66-acre development site around the stadium in northwest London.



Detailed talks have taken place over the past few weeks with the intention of finding a long-term solution to the future ownership and management of the 90,000-seat stadium, which when completed will be one of the biggest in the world.

The FA and Quintain are considering sharing various future income streams. The developer would help run the stadium and in return the FA could have a stake in the redevelopment of the surrounding area. This is a huge project, equivalent in size to rebuilding the whole of the centre of London’s West End.

Quintain owns the stadium’s adjoining car parks, as well as Wembley Arena, the conference centre, and other rights of way.

The talks between the FA and Quintain are also an attempt to resolve the fierce conflict between Multiplex, the stadium’s Australian contractor, and Wembley National Stadium (WNSL), a subsidiary set up by the FA to oversee the project.

Multiplex and WNSL are locked in a series of legal disputes. This has brought the stadium’s completion to a virtual standstill. Lord Carter, a government troubleshooter who is stepping down from his role as chairman of Sport England, has been brought in to try to resolve the dispute.

So far Multiplex has been issued with liquidated damages of £15m for being late in completing the project. But this is expected to rise to £38m, the maximum agreed by both parties when the construction contract was drawn up. Multiplex blames the FA for changing some of the stadium’s design specification, which has led to the delays, and is countersuing.

One option being considered by Quintain and the FA is to offer Multiplex a construction role in the huge £1.5 billion project that Quintain is preparing to build at Wembley. This involves housing, retail outlets and two hotels. In addition, the FA has considered making a one-off payment to the contractor of £60m to finish the project.

The financial responsibility for owning the stadium is starting to hit home for the FA. Last week it was faced with its first £45m repayment, resulting from a construction loan taken on to build the stadium. But with no income being generated yet, one lender familiar with the situation indicated that the loan terms are now being renegotiated. The 13 banks behind this loan include West LB, Lloyds TSB, Barclays and HSBC.

Multiplex now has 1,000 workers at the stadium, compared with 3,000 at the peak. Of this reduced figure some 250 are cleaners and the remainder are involved in electrical work.

The Australian firm’s involvement in the stadium has left it with a big financial headache. The costs have been far higher and this has resulted in huge losses for Multiplex, which is listed in Sydney.

Quintain is headed by chief executive Adrian Wyatt and has a market value of £905m. It is now one of Britain’s most active developers and its other high-profile regeneration projects include London’s Millennium Dome, where it is part of a consortium.

Wyatt had hoped the government would choose Wembley as a site for a super regional casino, but this plan has now been scropped.

The FA and Quintain are expected to come under pressure to explain the terms of the negotiations.

Those familiar with the situation say an agreement has to be reached by both parties and Carter is trying to unlock the impasse.

The ultimate objective is to ensure that the stadium hosts the 2007 FA Cup Final. Wembley is now almost complete, but it has to meet health and safety standards before it is allowed to host events.

Some rock concerts that were due to be hosted at Wembley have already been cancelled due to uncertainty over the timing of the completion.