Cardiff City gets permission for land deal

The Welsh club Cardiff City has won the city council's approval to sell land estimated at GBP 2 million to raise funds to deal with its mounting debts. Wales Online reports that according to the new deal, Cardiff City can sell the plot of land at Leckwith to Paul Guy’s company Capital Retail Partnership for GBP 1.8 million. Guy is a major shareholder of the Bluebirds. The council's share of 40 percent of the sale can be deferred for five years and then it should be repaid over the next five years with interest. Cardiff City will also hand over responsibility for the construction of the House of Sport to Steve Borley, who is the club's director. Borley has guaranteed completion of the facility by September 2011. The Supporters Trust has demanded a general meeting of Cardiff City shareholders to ratify the agreement between the director and the club and notices for this are expected to be sent out next week.

Council leader Rodney Berman believes that the deal benefits the club and the taxpayers. What we have here is a guarantee there will be a House of Sport that will start construction in the next three months. From my perspective that is a better guarantee than we had before.” House of Sport is intended as a youth academy and a community sports center. The executive board of the council feels that the GBP 750, 000 owed to the council from the sale is very secure and councilman John Dixon described it as "about as close to a nuts-in-the-vice guarantee as you could have.” The valuation  of the land at GBP 1.8 million has been verified by Colliers, the council's valuers.

Labour group leader Ralph Cook has expressed concerns about the deal seeming “incestuous”. He said, “It worries me that all the dealings are so internal and it seems to me that all the benefits are going to the club.” However, he does not feel it is worth delaying the decision to conduct further enquiries.

Borley believes the deal will help the club's financial situation. GBP 7 million is owed to creditors for work on the Leckwith stadium and there is also a winding up order for the tax bill of  GBP 2.7 million. Borley said, “It’s a fantastic decision and it will go a long way into breathing life into the situation. It is part of a series of measures they are taking to improve the club’s finances.” Borley feels that he will not make much money off the deal.

The Supporters Trust's Keith Morgan is worried because, “It’s all good news that the sale has gone through. They’ve got the season ticket money and this money and can use it to pay down debt. It is short-term good news but what still hasn’t been explained is how the club deals with the medium to long-term debt.”