HEREFORDSHIRE Council is under increasing pressure from its own opposition leaders to put off negotiations with the new majority owner of Hereford United until his intentions for the club and its Edgar Street ground can be clarified.
One group leader has said that the council should not enter any negotiation over leases on the ground until all options for a supporter led takeover have been exhausted.
Speaking ahead of a meeting between United’s majority owner Tommy Agombar and council leader Cllr Tony Johnson this afternoon, Lib Dem group leader Cllr Terry James said a supporter trust takeover backed by local businessmen was the only proper way ahead for the club in circumstances that were a “disgrace.”
“There should be no negotiation let alone transfer of the leases. If you buy the club, you buy the debt or get out,” said Cllr James.
“Supporters who raised money to keep the club they love going have been stabbed in the back – where is that money now?”
Independent group leader Cllr Sebastian Bowen said the council was drifting into a “difficult and dangerous” position without the legal clarity it needed to progress.
“I’m not a great football supporter, but this is about principle – the council and supporters need to know exactly and fundamentally where they lie before negotiations are offered let alone get underway,” he said.
It’s Our Leader leader Cllr Anthony Powers said talks should only start so long as they did not damage the council’s final position.
“We want football at Edgar Street and we want Hereford United playing that football. We don’t want a situation where the only viable future for Edgar Street lies with site re-development,” he said.
Cllr Johnson is due to meet with Mr Agombar at the council’s Brockington HQ later this afternoon.
Senior council officers have already met with Mr Agombar.
Cllr Johnson is said to want “further reassurances” from the new owners as the council considers the future for two leases relating to development at United’s Edgar Street ground.
He is due to meet with business backers for the supporters trust tomorrow afternoon.
Last week, the Hereford Times revealed that the council was ready to consider a request by the new owners for a transfer of the leases to a company within their ownership.
The council’s lawyers are currently assessing the request which would need proof of financial standing from the new owners ahead of any assignment being considered.
At present, the current tenancy arrangements between the council and the club remain unchanged.
While the council is the landlord of the Edgar Street ground, it does not own or have any direct control or involvement in the club and its decisions.
The club currently owes the council around £65k in rent arrears, business rates and legal fees and the council has been assured by the new owners that all outstanding monies will be fully re-paid – with an agreement to a written undertaking to this effect.
The council has confirmed that nothing in the development leases relating to the ground changes a requirement for football to be played there.
That requirement for football remains in the original lease on the ground.
The new leases refer to redevelopment of the Meadow End and Blackfriars End and stipulate that any proceeds be re-invested in the ground and its facilities.
The council has also confirmed the current application of an historic covenant on the ground stating that football should be there amongst other sporting uses.
At present, there is nothing in the club’s current circumstances that would change or affect the terms of the three leases or allow them to be changed, the council has said.
The renegotiated leases on the ground continue to be held by the club. If the club folds the leases would revert back to the council.
Hereford United and Herefordshire Council are closely entwined and most recently worked together to negotiate new leases on the ground.
Assigning the Edgar Street leases – one for 75 years on the ground and terracing to the west, the other for 33 years for the stand and parking area to the east and both dating from 1982 - was one of the last big deals done by the former Hereford City Council.
During the late 1990s, with United facing severe financial problems, the leases were reassigned to property developers in return for a £1m capital injection into the club.
The money was made available through two companies, the BS (Bristol Stadium) Group and Chelverton.
BS and Chelverton took equal ownership of a special purpose company called Formsole Ltd which made the investment and held the leases – as the tenant under both – with the club holding sub-leases.
By August 2001, BS had sold its “loan” to Chelverton which ran into trouble little over a year later when control of the leases passed to Carillion Richardson.
United still owed £1m plus interest to Formsole which stayed solvent when Chelverton went into liquidation.
It was about this time there was talk of United leaving Edgar Street allowing Formsole to sell the site.
This talk came to nothing and by 2003 it was clear the club was staying at Edgar Street.
The reassignment of the leases was supported by Herefordshire Council when it took control of the former city council’s affairs.
Getting the leases back was pitched as a political priority when the news broke in April 2010 that then United chairman Graham Turner and vice chairman Joan Fennessy were ready to sell their majority shareholding in the club.
The club began negotiations with Carillion Richardson for the return of the leases almost as soon as the Keyte-Russon takeover was completed in June that year.
That deal was done by December with the club paying £452,000 to secure the return of the leases and settle a £1,069,500 debt to Richardsons Developments, clearing the way for a new single lease and the development opportunities that could bring.
The deal was intended to offer the club security for the next 30 years and ensure future re-entry to the Football League - which requires a 25-year secured tenancy.
It also opened up opportunities for grant funding for any future development - £400,000 in the Conference and £750,000 in the Football League.
The council was ready to allow an extension to the new stadium lease of 250 years once development at either end was underway, with proceeds from the sale of development areas held in a joint escrow account.
That money was intended for the construction of two new stands - one at each end of the ground - and modernisation work on the existing stadium.