 Tuesday, 11th Oct 2011 23:49 Town were given until December 31st to agree to a new payment schedule regarding the back rent they owe on Portman Road at Ipswich Borough Council’s executive meeting on Tuesday evening. The new proposals would see the club begin repaying the £654,702 due to IBC from June 1st 2012 in quarterly payments over four years, or in its entirety within three months of promotion to the Premier League. In March, it was revealed that the annual rent on the land on which the Portman Road stadium stands had jumped by 643% from £15,000 to £111,500 backdated to 2004, the council having initially targeted a rise to £250,000. While Town have paid the new sum since the rent review was carried out last year, the club has dug its heels in regarding the additional £654,702 owed from the period back to 2004 when the rent review was initially due, an independent arbitrator having set the new figure, a process which cost the Blues £98,500. At the executive meeting, Town chief executive Simon Clegg put the club’s case, arguing that IBC’s former chief executive James Hehir, who died in November 2009, had made a verbal agreement regarding the issue of back rent with Marcus Evans: “We do accept that legally the council can seek back rent, not only to the time that the rent review was initiated on November 12th 2007, but to the time when it could have been initiated on June 1st 2004. “But we believe that to try and claw back monies from before the arbitration outcome is inappropriate and to further attempt to claw back monies from before the initiation of the review immoral. “The basis of our position is commitments given to Marcus Evans, the owner of the football club, by your previous chief executive, the late James Hehir. “He specifically made it clear that the council would not seek any back rent, whatever the outcome of the arbitration process. “James Hehir also articulated such a position at separate meetings with the Marcus Evans Group finance and legal directors and my own predecessor Derek Bowden.” Clegg says that this position has been backed up by those both within the club and the council at the time but current IBC chief executive Russell Williams said he could find no evidence of such an agreement: “While James met the club at various stages, there is nothing in writing to suggest the alleged statements or commitments were made. “Secondly, I have spoken to a number of people at the council, everybody I could think of that James could realistically have spoken to about this subject, and they have all confirmed that he did not tell them about any such statements. “Thirdly, none of the council officers who knew James well, and I include myself in that, can imagine he would have given such a commitment in the manner suggested. “This position is based in part at least on the fact that he was a very experienced chief executive, who would know that he didn’t have the authority to make such a commitment.” The Blues chief executive also felt that the timing of the decision to review the rent in November 2007 - three-and-a-half years after it was due — being so near to Marcus Evans’s takeover might lead to speculation regarding what might have triggered it: “The initiation of the rent review occurred only four weeks after the public notification that Marcus Evans was going to acquire the football club. Timing which may lead some people to suggest that this was somewhat opportunistic.” Leader of the Council David Ellesmere argued otherwise: “The lease which was signed pre-dates the current owner’s involvement in the club by quite some years so is not something which has been put in as a result of the change of ownership.” Clegg believes the club shouldn’t be treated as just another company by IBC given its unique position in the town: “A jointly prepared Ipswich Borough Council and Ipswich Town Football Club paper produced in 2006 estimated that the economic benefit of Premier League football to be in the region of £50 million per annum to this local community. “I cannot think of any other organisation in Ipswich which would have that effect on local business, not to mention the unquantifiable sense of pride that would be felt by everyone associated with this great town. “It is too easy, particularly in the current economic climate, for Ipswich Borough Council to simply treat the football club as any other business. “That view, in my opinion, is short-sighted and naïve. We should be seen as a community asset, something we as a club pride ourselves in, and as a promotional vehicle for local business. Success by the football club will deliver far greater benefits to this town than any other initiative.” Clegg hopes the two parties won't end up facing one another in court: “A decision to legally pursue this matter will have far-reaching and long-term ramifications for the relationship between the council and what I would suggest is one of this town’s greatest assets and institutions.” But David Ellesmere says IBC is in no position to treat Town differently from other businesses: “[Writing off the debt] would put a big financial hole in the council’s budget, it would be the equivalent to a 5% surcharge increasing Council Tax on all Council Tax payers in Ipswich or would lead to large scale redundancies or cuts in services and I don’t think we can agree to that.” Town had previously offered to pay the back rent only on promotion to the Premier League but Ellesmere said that that would amount to much the same thing: “Any payment which is contingent on a certain event not in the council’s control would effectively amount to writing off that debt.” Councillor Sandy Martin added that in any case IBC couldn’t write off the debt even if it was minded to: “We’re not legally allowed to do so under EC competition rules.” Speaking after the meeting, Clegg said Town, who require a significant subsidy from Marcus Evans each season to cover losses, will assess where to go next and doesn’t rule out season ticket price increases next season: “I want time to go away and consider this. "I’ve made it very clear what the owner’s position is and the financial position of the football club — we’re not in the position to pay this at this moment in time. “We’re totally dependent on the ongoing support of Marcus Evans to keep the football club solvent and one of the other alternatives is to hit the season ticket holders. But I don’t want to do that, they’ve seen a significant increase in price this season as it is. “We’re in very difficult economic times. You can’t constantly be going back to the season ticket holders, which was why we held season ticket prices stable for four years until the price increase that we had to impose on them this year as a result of the increase in rent going forward. “I’m not looking to run scare stories,” he added. “I just want the council to be very aware that we’ll have to look at every option if they continue to pursue this. “But they’ve given us a get-out clause — promotion this season. In the context of things, I would be very happy to write that cheque.” Council leader Ellesmere says IBC would not seek to damage Town’s promotion prospects even if the Blues fail to agree to the new payment schedule: “If the club continues to refuse to pay what it owes and we do need to proceed to a winding-up order, we would not take the final steps to place the club into administration [which would lead to a 10-point deduction] until after the end of the season.” A winding-up order would also be the result if Town agreed to the schedule and subsequently defaulted on payments. The council also confirmed that it would not pursue any increase at this year’s rent review, while no further interest would accrue once the club agree to the schedule no further interest will be added. Photo: Action Images / Matthew Childs
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