Salford City Mayor, Ian Stewart, has in the last week made two decisions in secret to bailout Salford Council's City of Salford Community Stadium (COSCOS) and Salford Red Devils.
The first decision, published yesterday, was to hand the ailing Stadium another £857,500 loan, to be matched by the Council's joint venture partner Peel Holdings which is putting in the same amount, giving a total of £1.715million.
The reason given for the loan from the cash-strapped Council is, bizarrely, to pay back its own previous loans... "This loan will contribute to enabling COSCOS to repay principal/interest repayments back to the City Council in 2015/16 of £1.503m" states a Council report.
There's little doubt that the stadium, known as the AJ Bell Stadium, is now a financial basket case. According to the Council's latest accounts, as at March this year, £17.6million was still owed by the Stadium company to the Council (from the original £20million building loan), and £5.3million was also owed from additional `operational loans'. The Stadium made a loss of £1.673million in 2014-15, and had liabilities of £6.026million.
...All this, despite the sale of a parcel of land around the stadium to pub chain Greene King earlier this year. Speaking at a Council meeting last summer about the plans, Deputy Mayor, David Lancaster insisted that "if this comes off we won't be needing any more loans".
The Council report states that the latest £857,500 loan will "sustain this improvement in performance" as "the Stadium's success continues to grow..."
The loan decision was taken by Salford City Mayor, Ian Stewart, in the secret Part Two of a meeting, and all documents related to the loan report are also secret and "not available for public inspection". Also, normally such decisions are accompanied by an assessment of risk high, low or medium but the Assessment of Risk on this decision just states: "This loan provides the necessary funding to allow the Stadium to meet its cash flow obligations 2015/16 and maintain its position as a flagship and catalyst for regeneration and development in the area".
Normally there is also a comment from Council officers on Legal and Financial Advice but, again, this decision merely notes that advice has been given without stating what that advice is. Councillors can't even ask for the loan decision to be looked at in more detail as "This decision is urgent and is not subject to call-in, in accordance with paragraph 5 of the Decision Making Procedure Rules..."
All in all, not a good start for the Council's new Monitoring Officer, Miranda Carruthers Watt, who was brought in to be an `independent voice', after the fiasco of Martin Vickers being the Monitoring Officer who oversaw his own dodgy dealings (see previous Salford Star article click here).
Meanwhile, last week, Salford City Mayor, Ian Stewart, made another decision on the £1.5million loan that Salford Red Devils owner Marwan Koukash is supposed to be paying back to Salford Council. This was done without reference to any official Council meeting at all under the Council's `Special Urgency' measures.
Back in June, after the Salford Star had printed allegations that players weren't being paid by Salford Red Devils, Marwan Koukash held a press conference stating, firstly, that Salford Council owed him £750,000. Nothing further has been heard about this. Secondly, Koukash stated "Our club pays in the region of £300,000 to £400,000 a year to the old debt...That includes the Council's debt. That's not going to bloody continue. `Mr Mayor and Mr Deputy Mayor you have personal guarantees against the people you've loaned the money to go after them. Stop taking money out of our club'. The £300,000 could easily pay for a marquee player and more..." (for full details click here)
It looks from a Council report on the Koukash debt that the Red Devils svengali has got his way, as a meeting of creditors held on 7th August varied payments due under the previous Company Voluntary Arrangement (CVA).
The Council's terms of repayments of the £1.5million debt (carried over from the old Salford Reds company) was already incredibly generous under proposals set up by former Council Director Martin Vickers, now CEO of Salford Red Devils. The Council was to get 4/25ths of what it was owed - a total of £253,291 - by 2018, with the rest of the debt - £1.33million spread until 2038, interest free.
The new proposals, agreed by all creditors including Salford Council, now "reschedules payments from the Club to the Council", although nowhere does it say what the repayments schedule will be. Again all legal and financial advice is being kept secret and no councillors have been allowed to call in the decision. The only giveaway is that the risk associated with the Mayor's decision is calculated as `High'...
The Salford Star has consistently called for a Public Inquiry into Salford Council's dealings with the Salford Reds/Salford Red Devils and it has been consistently ignored.
Marwan Koukash promised to do an interview with Salford Star back in June, saying that he had "nothing to hide". No interview has been forthcoming.
The Salford Star has asked to see all invoices and payment notices to and from Salford Red Devils under the public right to inspect Salford Council's accounts. So far this access has been denied.
Salford Council and Salford City Mayor Ian Stewart refuse to provide any comments or to be interviewed about the Stadium or its dealings with Salford Red Devils.
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