Brian Sandom
Corporate Director Environment
Andrew Armes
Head of Development & Design
Our Ref: FOI/ENV
Your Ref:
Reply To: Rick Boucher
Direct Line: 01908 252443
E-mail: rick.boucher@milton-keynes.gov.uk
6
th March 2006
Re: Freedom of Information Act Request
Further to your Freedom of Information Act request, the Council's response is as follows.
In July 2003, Milton Keynes Council (“the Council”) entered into a legal agreement with
Commission for the New Towns (“EP”), Inter MK Limited (“the Developer”) and Asda Stores
Limited (“the Retailer”) relating to the development of land in Denbigh Milton Keynes. The
“development” provided for in the Agreement comprised:-
1 A new multi purpose sports stadium with a seating capacity of at least 25,000 (but not
precluding an increase in capacity to 40,000 approx 1455 car parking spaces, a
separate arena with a seating capacity of approx 5,000 for sporting events and 6,500 for
concerns and otherwise in accordance with a detailed specification drawn up and
agreed between the Council and the Developer and which was actually annexed to the
Agreement (“the Base Stadium Development”).
2 Retail premises comprising at least 14,990 m2 of gross internal area being the new Asda
superstore (“the Primary Enabling Development”) together with other “enabling”
developments and all associated highway works.
The Agreement also required a number of conditions precedent to be satisfied prior to the
commencement of any development designed to secure the actual construction of the new
stadium to the agreed specification and thereafter the continuity of football at the new stadium.
The conditions precedent specifically relating to the new stadium were as follows:-
1 The obtaining of satisfactory planning permission by the Developer and the Retailer for
both the stadium and the foodstore (“the Planning Condition”)
2 The completion of a Section 106 Agreement required to implement the development
which included, inter alias, the obligation on the retailer to construct the new stadium as
a condition of securing its planning consent for the new store (“the Planning Agreement
Condition”)
3 The procurement by the Developer of a legally binding commitment from Wimbledon
Football Club to relocate its home ground facilities to the new sports stadium and to
obtain consent from the Football Association to do so (“the Football Club Condition”).
4 Completion of a building contract for the construction of the new stadium together with
the appointments of all professional advisers required.
5 The Developer being able to satisfy EP of the ongoing viability of the Base Stadium
Development (“the Business Plan Condition”) such 5 year plan to include annual and
cyclical costs and revenue sources and identifying commercial ventures and ancillary
facilities that needed to be retained long term to support the main objective of securing a
Nationally Recognised League Team operating in Milton Keynes being a football team
playing in Pyramid Level 6 or above as prescribed by the FA.
6 Similarly, the Developer satisfying EP that the physical construction of the Base Stadium
development is capable of being delivered to timetable and budget.
Once these various conditions precedent were satisfied the Agreement then provided that
subject to the new stadium achieving the agreed specification and the necessary licence from
the Football Licensing Authority EP and the Council will transfer their respective freehold
interests in the site of the new Stadium to either the Developer itself or another company which
may be formed by the Developer (and approved by EP acting reasonably) for the purpose of
taking the transfer of the freehold of the Base Stadium Development. This Transfer will
contain a restriction such that in the event Pyramid 6 football ceases to be played at the
Stadium for a continuous period of 2 years then the freehold interest in the Stadium will be
transferred back to the Council for a nominal £1 consideration. This restriction will be
registered against the title to the Stadium and as such, will be binding on the Developer and
any successors in title to the Stadium.
The Agreement also provided that on the realisation by the Developer (or any associated
company of the Developer) of any proceeds or capital receipts arising from any disposal or
development of any of the “enabling” development sites EP and the Council would received
fixed sums being the market value of their respective interests in the Stadium site and a fixed %
of any overage which may be available, the % again being based on the parties respective land
ownership interests in the development site.
Before any overage payments are made the Developer is entitled to be reimbursed all sums
reasonably and properly incurred by the Developer in satisfying the various conditions
precedent however the Agreement specifically provides that such costs recoverable by the
Developer must exclude any costs incurred in the day to day operation of the Football Club as a
going concern.
These obligations regarding the distribution of any proceeds or capital receipts and the payment
of any overage are binding on the Developer and any associated company or other third party
so even if the Developer disposed of its interest in the new stadium site any successor in title
would still be bound by the same obligations.
The Agreement also contained a general obligation on the Developer in respect of proposals for
any element of the overall development prior to the payment of any overage not to enter into
any transactions with any third party the sole or principle purpose of which or the effect of which
may be materially to diminish the operation of the overage mechanism in the Agreement or to
materially diminish the amount of any overage sum to which the parties would otherwise have
been entitled.
Similarly, any “development costs” to be taken into account in calculating any overage
payments due are to specifically exclude any costs or expenditure attributable to the acquisition
of Wimbledon Football Club from the administrators and its relocation to Milton Keynes .
Following the satisfaction of the various conditions precedent there is also a specific obligation
on the Developer to take all necessary steps at it sole cost to satisfy the current requirements of
the Football Licensing Authority needed to procure the issue by the FLA of the initial licence
authorising the operation and use of the Base Stadium Development.
With regard to information or agreements between the Council and any of the above companies
relating to the operations of the MK Dons training facility at Woughton on the Green, there is no
agreement between the Council and any of the companies you have referred to. Any
arrangements that do exist will be between MK Dons and Milton Keynes Sports Club and the
Council does not have any information with regard to these.
You have the right to appeal against the way I have dealt with your request for information
under the Freedom of Information Act 2000. If you wish to appeal please set out in writing your
grounds of appeal and return to me.
You also have the right of appeal to the Information Commissioner at:-
Information Commissioner's Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF
Telephone : 01625 545700
www.informationcommissioner.gov.uk
Yours sincerely,
Mr Peter Smettem
Valuer to the Council
This response was previously provided by Mr Smettem, but signed in his absence.