DEVELOPMENT agreements covering the Blackfriars and Merton Meadow stands at  Hereford's Edgar Street football ground have today (Mon) been terminated.

Herefordshire Council confirmed the termination in writing to the directors of the former Hereford United Football Club (1939) Ltd.

This morning, the council took possession of the ground - for which it is landlord - and related land from Hereford United Football Club (1939) Limited.

Possession action followed the High Court winding up order against the club on Friday effected the forfeiture of the leases on the ground and related development agreements.

The council got the legal go-ahead to take possession this morning.

Council leader Cllr Tony Johnson ordered the possession action.

In a separate development, a full public inquiry into the council's dealings with Hereford United over recent years has been confirmed.

Cllr Sebastian Bowen, chairman of the council’s overview and scrutiny committee said the inquiry's initial terms of reference would take in those circumstances within the council’s control such as the re-assigning of leases on the ground.

“It is my hope that an inquiry of this nature can clarify the council’s actions as the club headed toward its demise,” said Cllr Bowen.

The committee has been waiting on the winding up order before confirming the inquiry which will be held next month.

Meantime, the council is assessing legal advice over taking possession of the vacated Edgar Street ground as soon as possible .

Though landlord of the Edgar Street ground, the council does not have any direct control or involvement in the club and its decisions.

At the centre of the scrutiny inquiry are to leases referring to redevelopment of the Meadow End and Blackfriars End, stipulating that any proceeds be re-invested in the ground and its facilities.

Earlier this year the council received a request from the club's then new owners for a transfer of those leases to a holding company within their ownership. 

The folding of the club sees the eases revert back to the council.

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.  

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.

 More soon