The super-casino: have City already missed out on a jackpot?Updated: February 22nd, 2007
If City are famous for winning “cups for cock-ups” it might now be time to order a bigger trophy cabinet.
With SportCity set to benefit from the £265m super-casino development, the club’s sale of its one remaining landholding, Reebok City, could prove to be a very costly mistake.
At some point between May 2004 and May 2005, Manchester City Property Limited - a wholly-owned subsiduary of Manchester City PLC - sold Reebok City to a unnamed buyer and leased it back from them. At December’s AGM, chief executive Alistair Mackintosh revealed that the buyers were London-based investors, but didn’t say how much it was sold for.
I’ve been told by a reliable source that City borrowed money from the council to help fund the refurbishment of CoMS, and Reebok City was sold to pay this debt. MCPL’s accounts reveal it was sold “at market value”. But now the market has changed - bigtime.
Although the official proposals don’t detail exactly where the casino complex will be built, judging from the photos below it looks like it will sit right next to Reebok City:
(Click on images for full-size pictures)
But the new casino is just part of a massive redevelopment of the area around CoMS, which is expected to send property values through the roof.
Last July Harrow Estates paid an “eight figure sum” for the 44-acre CIBA Speciality Chemicals site near SportCity on New Ashton Road (details here). The firm expects the final market value will reach £200million.
In 2005 the City Council announced plans for a £500m redevelopment of the Bradford Road Triangle area and according to these Council minutes looks like it owns up to 50% of the CIBA site.
The question now is how much City can benefit from all of this. Certainly the prospect of lucrative corporate packages and extra concerts and events at CoMS should boost income for the club, though it looks like it will be at least three years before we will see any benefit.
But whether it will lead to a takeover and a further cash injection is still unclear.
Last month I wrote this story, after discovering that an American billionaire has been in talks with City about a potential takeover. I speculated that the American might be Philip Anschutz, the man who took Beckham to America and who owns the Millenium Dome. I haven’t had any confirmation that Anschutz is the man in the picture, so the evidence remains circumstantial.
Although there will have to be a bidding process to find a developer for the casino, it is widely believed that it will be won by Kerzner International, which was named as the preferred operator for the Manchester casino in 2004. Kerzner has close ties with Anschutz’s AEG, and would have been the developer for the casino at the Millenium Dome (link).
So far City’s share price at Plus Markets remains unchanged, but with John Wardle now forced to dip into his own pocket to fund a transfer today (which will no doubt be added to City’s debt), the need for new investment seems more pressing than ever.
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~ Although Manchester was the 16-1 outsider at bookmakers Paddy Power, and left many people crying “foul”, yesterday’s decision shouldn’t come as a complete shock.
Last year Manchester City Council hired consultants Europe Economics to write a report on where the super-casino should be located. The firm, which has a former member of the 10 Downing Street Policy Unit, a former senior DTI official and two former employees of the government’s favourite management consultants, KPMG, listed as senior staff, produced a report that appeared to strongly favour Manchester. Yesterday its website claimed that the firm had played a “significant part” in Manchester’s bid.
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~ In researching this piece I was reminded of what a small world the business community is. Harrow Estates is owned by property tycoon Steve Morgan, a former bricklayer who is ranked 153rd in the Sunday Times Rich List with an estimated fortune of £425m (BBC profile). Its finance director is Ashley Lewis, who was a director at City until 2005, representing the Boler family’s 18.75% stake in the club.
In 2004 Morgan failed in a £70m bid to buy Liverpool FC. Although it’s possible that he could turn his attentions to City, his interest in Liverpool probably stemmed from the potential to redevelop Anfield. As City have no property to develop it seems unlikely that he would have much interest in our club.
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~ The casino decision brought out the odd funny comment on talkboards. Irish Blue at Citymancs believes the new complex should be called “Casino Royle”, while a poster at MEN reckons that there’ll now be “two big sheds for losers” at Eastlands. I know the joke is at our expense, but sometimes you still have to laugh.