Legal warning to rugby region over £113k debt
THE Cardiff Blues has been warned it could face a winding up petition from its landlord Cardiff Athletic Club (CAC) after falling £113,000 behind on its rent for the region’s Arms Park home.
Members of CAC, which owns the Arms Park, last night backed an annual general meeting resolution that if the Blues don’t pay rental arrears in full, or surrender its existing lease for a new match day playing licence arrangement on mutually acceptable terms, it would authorise its management committee to commence winding up proceedings against the rugby region.
Blues chief executive Richard Holland said he was “confident a positive solution will be found”.
Cardiff Blues’ existing lease with CAC expires in 2022. It is currently in arrears on its rent by around £113,000, with the next instalment due this month.
Chief executive of the Blues, Richard Holland, said: “We are in dialogue with Cardiff Athletic Club and are aware of the latest position. We are committed to and want to remain at the Arms Park and Cardiff Athletic Club, as a shareholder in the Blues, also want us to stay. I am confident a positive solution will be found.”
As revealed by WalesOnline earlier this week, CAC is looking to redevelop the site, with potentially a new rugby stadium at its heart.
Getting the Blues to agree to a new match day playing licence arrangement could form part of CAC’s strategy of allowing any development of the ground to start sooner than under the terms of the current lease with the Blues.
And as a shareholder in the Blues, it is also in CAC’s interest to strike a deal that ties the region into playing at the Arms Park well beyond 2022.
While at a very early stage CAC has appointed leading property advisory firm Savills to come with options for the redevelopment of the Arms Park.
CAC is made up of the sporting sections of rugby, cricket, bowls, hockey and tennis.
A new stadium,would be built at 90 degrees to the existing ground, could cost anything from £30m, excluding planning costs. However, the existing stadium, could also be partially redeveloped.
The financial challenge would be ensuring that commercial developments at the site generated enough revenue or value to provide for a new rugby ground, or partial development of the existing stadium.
There could be potential at the River Taff end of the ground for high rise private apartments.
The site could also provide space for office development.
Any new ground would look to be utilised more often on non match days than the current ground, which was built in the early 1970, as well having all the match day corporate and leisure facilities expected of any modern stadia.
If plans are taken forward a property development firm could be brought in to work alongside CAC. Funding could also be provided upfront by an institutional property investor.
Cardiff Blues had looked to agree a new long-term lease with property development rights for the ground from CAC.
And at one stage the Blues, with potential backers from the Middle East, were looking to deliver an indoor arena at the current site with linked commercial developments, such as hotels, for the staging of both rugby matches and concerts.
However, a deal, based on the Blues initially looking to pay up to £10m for the development rights, never materialised.
Then last year the Welsh Rugby Union, tabled a bid to acquire the freehold interest in the ground in a deal worth around £17.5m.
However, the offer was rejected by the management committee of CAC, who opted not to put it to its members.