Briefing by the English National Stadium Development Company Limited

Mr Bob Stubbs, Chief Executive, Mr Roger Maslin, Finance Director, Mr Paul Fletcher, Commercial irector, Mr Chris Palmer, Communications Director, Mr Paul Sergeant, Operations Director, Mr David Lowman, Human Resources Director, and Mr Gary Hunt, Deputy Project Director.

1. Organisations involved with the project. Mr Stubbs explained that there were seven different organisations involved in the redevelopment of the National Stadium: The Football Association, The English National Stadium Development Company, The English National Stadium Trust, The English Sports Council, Wembley plc, the various event owners and, finally, the London Borough of Brent which was the planning authority and the licensing body.

2. The development timetable. The Company aimed to sign off the design of the new stadium in July 1999, prior to submitting a planning application to Brent Council in October 1999. The Company hoped to have consent to its planning application by March 2000. If this consent was achieved, the Company aimed to close the stadium in August 2000 and re-open it in May 2003. Mr Stubbs emphasised that the planning timetable was

critical; every day's slippage at the planning stage would result in a day's slippage to the opening date of the stadium.

3. Project overview. The Company planned to develop a 90,000 all-seater stadium to international standard, suitable for football and rugby, and capable of conversion for major international athletics events. The facilities would be built to international standard. Seven thousand corporate hospitality VIP seats would be developed and these would be crucial to the funding of the project. Disabled access would also be vastly improved.

4. Facilities. Mr Stubbs explained that the present stadium only functioned for approximately 30 days a year. The Company planned to develop other facilities which would generate all-year round use of the stadium. It planned to build a four or five star hotel; to construct themed restaurants; to provide fast food outlets; to provide office space (possibly for the Football Association, Football League and Premier League); and also to increase the stadium's potential as a visitor attraction. The Company hoped that these developments would achieve 750 full-time jobs in comparison with the 70 full-time jobs available at present.

5. Transportation. The move in the position of the Stadium would necessarily reduce the number of car parking spaces at the stadium from 6,000 to approximately 3,500. The Company planned to introduce pre-booked car parking and to discourage the car as the primary mode of access. Access via public transport or on coaches would be encouraged.

6. Funding. The project cost was estimated at £316 million. This would be funded through the English Sports Council grant of £120 million and through raising a debt of £200 million. Preliminary discussions suggested that the Company would be able to raise this money on the financial markets.

7. The logistics and requirements of international events. Mr Stubbs explained that providing facilities suitable for major international events placed an additional burden on developers. There was a need to provide adequate media facilities and to cater for the event sponsors' requirements. Security and transportation were further issues to that had to be considered. Any large-scale international athletics event would require duplicate warm-up facilities and this would necessitate securing the use of additional land. If the facilities required for an Olympic bid were to be based around the Stadium, the use of further land would also be required.

8. Local objectives. Mr Stubbs thought that it was difficult to achieve a balance between local needs and the ambition to stage major international sports events in the Wembley area. Brent Council sought to achieve inward investment and job creation. These objectives resulted in high density development, an infrastructure suited to commercial needs and an environment which was suited to its primary users. The Council's objectives were not necessarily compatible with any eventual plan to cluster a wide range of other sports facilities around the National Stadium.

9. Opportunity preservation. Mr Stubbs raised the issue of a future Olympic bid. If such a bid were launched, the bidding team may well wish to see further facilities developed around the National Stadium. However, no organisation or agency appeared to be taking responsibility for such a development or for preserving the opportunity to create such a development in the future. No assessment of what further facilities would need to be built had been undertaken, nor had any indication been given of how they would be financed or when they would be developed.

10. Statutory planning. Mr Stubbs stated that the Company's focus had been on acquiring and developing a national stadium, primarily for large football games, but one which would be capable of hosting athletics events. UK Athletics had launched a bid for the 2003 World Athletics Championships. This bid meant that the progress of the planning application had become critical and that the development project had become highly time sensitive. Should UK Athletics' bid succeed, there would be only three months' leeway between the Company's projected completion date of the Stadium and the opening of the Championships. Mr Stubbs explained that the development of facilities for the Commonwealth Games in Manchester had not been so problematic as the bidder and planning authority were one and the same.

11. Risk exposure. Mr Stubbs outlined the difficulties which time-critical projects presented to developers. He said that such projects were vulnerable to labour disputes and to ransom demands by third parties. In such cases, planning consents often became expensive. The project sponsor was often placed in a weak negotiating position. Mr Stubbs argued that UK Athletics' bid placed the Company in an invidious position. They would be exposed to cost increases with no commensurate economic benefit. He explained that the facility owner made very little profit from major events. For example, Wembley Stadium plc had made an extra £3 million from Euro '96 in comparison with a normal operating year. The Athletics World Championships were particularly unattractive to the Company as they had to provide the facilities on a no-prsis.

12. The aims of different parties. Mr Stubbs explained that the three parties involved in staging a major international sporting event—the local authority, the facility owner and the international event owner—each had a set of conflicting aims. The local authority sought to maximise economic development and to minimise the negative community impact. The facility owner only sought to make improvements to the facility which added long-term commercial value to their business. The facility owner gained limited commercial value from one-off events and often could not afford to up-grade the infrastructure. The international events owner, on the other hand, sought to see a highly developed infrastructure, as the more impressive the infrastructure, the more likely their bid was to succeed. They also sought to minimise logistical problems and to maximise the value of the event. Mr Stubbs considered that these conflicting aims were most likely to be resolved when the three parties were the same. In London, these difficulties were particularly acute as there was often more than one local authority involved.

13. Athletics. The English Sports Council had made it clear from the start that the new Stadium had to be capable of staging major athletics events. The facility would only be required, at best, for three events over the next 20 years (the Olympics, the World Championships and the European Championships). Most athletics events attract a crowd of approximately 10,000 and it would not be economically viable to open the Stadium for such small numbers, nor would it provide a suitable atmosphere for less well-supported athletics events. Mr Stubbs said that the Company would not be able to guarantee UK Athletics a completion date for the Stadium until next summer. The contract would also stipulate that any additional costs caused by third parties holding the Company to ransom would not be met by the Company. A range of external factors might delay completion of the Stadium development and the Company could not afford to be exposed to such risks. The potential additional costs would need to be underwritten by the Government or the Sports Council. UK Athletics had no money at its disposal and supported the Company's position.

14. Brent Council. Mr Stubbs argued that there were two contentious issues relating to the planning application. First, the issue of the Twin Towers, which Mr Stubbs was confident of resolving. Secondly, the Section 106 Agreement: Brent Council were seeking £30-45 million from the Company which Mr Stubbs saw as an unrealistic demand. The Company could not afford this and had advised the Secretary of State and the Sports Minister accordingly.