KC Stadium row: Council's 'neglect' to blame for Hull FC charge, say owners
HULL City owners Assem and Ehab Allam say mounting financial pressures triggered their decision to start charging Hull FC to display club memorabilia at the KC Stadium.
The move has sparked widespread anger among Hull FC fans.
In particular, they have criticised the removal of Black and Whites' memorabilia from the suite named after club legend Johnny Whiteley after Hull FC refused to pay the new charges.
But the directors of the Stadium Management Company (SMC) today claimed the move was necessary to offset mounting losses at the firm, which operates the venue and the nearby sports arena under a 50-year lease agreement with Hull City Council.
Our transparent fixed sales fees set us aside from the competition, offering full Estate Agency Service for a fixed fee regardless of the value of your home.
Contact: 01482 423365
Valid until: Sunday, May 26 2013
They also criticised both Hull FC and the council in what appears to be a deepening rift between the main partners at the stadium.
The SMC made a net loss of £409,000 in 2011-12, including a £208,000 net loss on rugby-related costs.
In a lengthy statement released to the Mail, the SMC accused the council of failing to provide copies of warranties covering terms of the original lease agreement after the Allam family acquired the company in late 2010 as part of their takeover of Hull City.
As a result, the Allams say they are now pursuing a £500,000 claim for costs against the council for "exceptional repairs" which have been necessary to comply with the requirements of the stadium safety certificate.
Other issues blamed for the SMC losses include:
A lack of financial planning by previous SMC owners to fund major repairs and maintenance at the stadium prior to their takeover.
Increases in business rates on the stadium and the arena.
Soaring utility costs.
The legacy of an inherited outstanding £3.5m mortgage commitment taken out in 2008.
The statement says: "SMC will continue to incur further financial losses in the immediate future due to the increasing revenue costs of repair and maintenance as the stadium becomes older, and also as a result of specific major items of capital expenditure, such as the total replacement of the stadium pitches scheduled for 2014 at a total cost of about £1.5m.
"In addition, the impact of the decision by the UK Valuation Office to increase the rateable value of the stadium substantially for the 2010-2015 period will increase the level of business rate charges significantly as the levels of transitional relief are progressively reduced over the next two years.
"The worsening financial position of the SMC has created a genuine and urgent need for the implementation of a new commercial strategy.
"This means that the SMC is no longer able to offer its tenants additional benefits which fall outside their existing tenancy or commercial agreements on a 'free of charge' basis.
"The new commercial strategy has to focus upon maximising the additional commercial opportunities available to the company."