The leader of Northampton Borough Council Mary Markham says she is “confident” the authority can recover the £10.25 million it was owed by Cobblers through developing the Sixfields land - even though the move comes with a number of risks.
In the last few hours cabinet members on Northampton Borough Council have agreed a memorandum of understanding between the authority and the consortium of businessman led by former Oxford United chairman Kelvin Thomas.
The council will now recoup the £10.25 million it is owed by developing all or part of the 33-acres of land around Sixfields Stadium on its own, which could involve selling the land to a bidder or working with a development partner.
The club will also pursue any outstanding money it claims it is owed by companies involved in the failed East Stand stadium development.
Papers before a special cabinet meeting tonight stated the council could make between £8.5 million and £15 million from developing that land itself.
However among the risks stated in that report, it identifies that the money made from the development might not cover the £10.25 million, decontamination of the land at Sixfields could prove too costly and the council may not be able to get hold of the rights to develop the land in the first place, as they are still tied up with David and Tony Cardoza’s company County Developments (Northampton) Limited - currently being liquidated.
But Councillor Markham said: “I don’t think we will be left with massive debt. I am confident we can recover most, if not all of the £10.25 million and that is what we will work to do.”
The report to the cabinet also shows that, by assuming the debt, the council will incur £1.3 million of interest payments back on that money, which was drawn down from the Public Works Loans Board, until April 2020, plus a further £2 million in various legal fees and studies to develop the land at Sixfields and recover other debt.
It’s total liability would by £13.2 million, it estimates.
When asked whether the council could not have developed the land around the stadium, which it owns, without ever having to give Northampton Town a £10.25 million loan, Councillor Markham, said: “The deal with the football club was not set up because we wanted to develop the land.
“We set up the deal because the electorate on the doorstep asked us to support the football club, the cricket club and the rugby club. It was even part of our manifesto to do so.
“It wasn’t that we just gave a piece of land to someone to develop - that was a way to facilitate a development of the football club.”
On the cost of the legal fees she said: “It’s regrettable, but we plan to recover the costs either through the police investigation or through the development of the land.”
Councillor Markham also revealed she was relieved at the fact the Kelvin Thomas deal is now set to go through.
She said: “It is excellent news for the club.
“I don’t mind telling you there was a time we wondered whether we would even get to this point.
“Tonight is a great relief.
“I know it’s not the final event, the legal papers still have to be drawn up and signed but we are certainly a lot further ahead of where we were last week.”
Councillor Markham said the council will still be represented at the High Court administration hearing against Cobblers on Friday.
But she said the authority would be seeking an adjournment of two to three weeks to make sure “all the legal documents are in place.”
A separate winding up petition, which was adjourned to Monday, November 30, will not go ahead providing Kelvin Thomas pays the £166,000 the club owes to the HMRC ahead of the hearing.
In response, leader of the Labour group, Councillor Danielle Stone, said the council was embarking on a “high-risk strategy” to recover the £10.25 million.
She said: “I am pleased that the Cobblers have been saved.
“This must come as a huge relief to fans and particularly the staff. However, we must keep our heads and realise what is still involved.
“The borough council say they are going to get their £10.25 million back by now developing the land around the Sixfields stadium. Make no mistake this is a very high risk strategy.
“The land around Sixfields, being a former landfill site, is widely regarded as being contaminated. What serious developer is going to touch that land?
“The borough council doesn’t have a good track on development so I don’t have much confidence that they are going to get this money back in the short to medium term, if ever.
“I appreciative this was a very difficult decision for the borough council but we all need to be honest about the risk involved.
“The borough council keep neglecting the fact that the reason KPMG is doing a Public Interest Report is down to my official compliant not their initiative.”