Re Lorne Griffith:"I am the very first person to defend the profit motive, capitalism, as the very best way of progressing society. However, there is a level of profit seeking beyond which you shouldn't go. This development crosses that line. It is greedy and shows the new tyranny (as denounced by Pope whats-his-name earlier this year) of the profit-at-any-cost approach taken by those unable to live within the rules"On what do you base your thesis that the LR Development is based upon the "tyranny of greed" and pursuit of excessive profit?When BFC originally bought into LR, they did so in partnership with Barratt Homes. This was on the basis that BFC would secure planning permission for the site from LBH by moving to a (community) Stadium, and BH would pay for this from the profit they hoped to make from the Housing Development etc.A couple of years later, Barratts pulled out, because they feared the development would not be profitable. (We may assume that as one of Britain's biggest house builders, they know a thing or two about such things).Subsequently, BFC's new owner, Mr. Benham, decided to go ahead himself. Upon making his first proposals to LBH, they required him to underwrite the scheme personally, to an 8 figure sum. When they subsequently advised that the residential plans were too big, and the number of flats etc should be reduced, they required him to increase his undertaking.At the Planning Meeting, it was disclosed that the new Stadium was going to cost £71m to build. It is hoped that the new Stadium will allow the football club, currently losing £5m p.a., to break even. However, not even with promotion to the Championship is it expected to break even on an operating basis AND repay the £71m stadium construction cost.Therefore for the whole scheme to be viable, BFC will need to recoup as much as possible from the Developers who will build the housing and hotel etc.Bear in mind that the stadium will be built first, with the enabling Development to follow afterwards, so Mr. Benham, will have to fund the scheme whilst waiting for his share of the development proceeds to return to him. Obviously he carries the whole of the Market Risk during this period.Remember, too, that Developers will not touch any such scheme unless they have secured their own projected profit margin, with the profits to be paid to them BEFORE BFC gets its share.Consequently, the chief concern of LBH's Planning Department was/is not that the scheme will make too much profit; rather it is that it may be dangerously unprofitable, so that if Mr. Benham/BFC cannot guarantee it until completion, the whole thing will collapse.Therefore it is not a question of how much profit BFC will make in building the Stadium, it is instead a question of how little they/Mr. Benham may lose. (On which point, it is reported that Mr. Benham has already sunk £30m+ of his own money into the club, the majority of which he can never get back, since it was invested on the playing side)However, if it is any consolation, BFC have agreed with LBH that if LR should somehow turn a profit for the club, this will be shared with the Council on an S.106 basis.Neither party is counting on this.
Richard Cathcart ● 4249d