Source: Daily_Mail
Do the men who control Portsmouth want a football club or a superstore?
A scruffy piece of land to the east of a road named afterPortsmouth's most celebrated player holds the key to the famous oldclub's future. [LNB]Like the club's offices in Rodney Road, where fans yesterdaydelivered a letter demanding urgent action on five key issues ofconcern to director Mark Jacob, the site next to Jimmy Dickinson Waywhich serves as the stadium car park is not owned by Portsmouth CityFootball Club Ltd. [LNB]But it is the most valuable and significant of the five parcels ofland still controlled by the club's former owner, Alexandre Gaydamak. [LNB] [LNB]Andit is who owns the real estate - and what they do with it - that lookscertain to determine the 112-year-old club's destiny. [LNB]Portsmouth'sfans have grown increasingly concerned not only about their team'sinexorable slide to the bottom of the Premier League but also over theominous line-up in the directors' box on match days of propertydevelopers and their lawyers associated with the regime of latest ownerAli Al Faraj. [LNB]Fans' forums frequently reflect the fear thatdecrepit and dilapidated Fratton Park has a more likely future as thesite for a superstore than for a football club. [LNB]ColinFarmery, spokesman for the recently formed Portsmouth Supporters'Trust, said: 'This is to do with property. But is it about peoplemaking short-term profit out of a property deal or making a long-termprofit by using a property deal to develop the football club and turnit into a business which can be sold on five or 10 years down the line? [LNB]'The way the current owners have behaved suggests their motivation is more short-term than long-term.' [LNB]Football finance experts grow wary when property development becomes an issue at a football club.[LNB] Propertydeals that involved Wrexham and York drove those clubs to the brink ofextinction and while Portsmouth's membership of the richest league inthe world may be looking increasingly unlikely to endure beyond thisseason, the demise of the club who, under Harry Redknapp, won the FACup only two years ago would send shockwaves through the PremierLeague. [LNB]'Property developers are not known for being warmand cuddly,' said Tom Cannon, professor of strategic development atLiverpool University.[LNB] 'You don't go into property development ifyou are interested in the continued existence of an institution of morethan 100 years' standing. I'd be worried.' [LNB]Portsmouth's stadium is owned by the football club but mortgaged toBalram Chainrai, a Hong Kong-based businessman whose interests includeproperty development. [LNB]Key issue: Miland Development 2004 was created by former owner Milan Mandaric to drive the redevelopment of Fratton Park[LNB] With two sides of the stadium tightlybounded by housing, the ground's value as a development site would bemassively enhanced by packaging it with the 10 acres or so of land thatGaydamak owns to the west and north of Fratton Park.[LNB]Which is why Miland Development 2004, the company through whichGaydamak owns the land, will not strike a deal to sell his holdings toAl Faraj and his apparent coterie of developers until agreement isreached on the £28m in loans which he claims to be owed by the footballclub. [LNB]At the moment, there is understood to be no dialogue between the club's ruling faction and their biggest creditor. [LNB]Butthe longer the stand-off continues, the greater the danger ofPortsmouth becoming the first top-flight club to go bust, either as aresult of a winding-up order from the taxman, which they will challengetomorrow in the High Court, or simply because they run out of cash. [LNB]Althoughthe two debts are not linked, the pressure to resolve the Gaydamak loanand land situation will intensify as the taxman's deadline of February10 approaches and the game of brinkmanship could go right to the wire. [LNB]Buteven if the two sides do manage to come to an arrangement, the club'sfuture, and perhaps their existence, will depend on the motives of AlFaraj and his associates. [LNB]Do they want control of the landin order to generate money towards either the redevelopment of FrattonPark or a move to a new stadium, the only ways in which Portsmouth canbecome a sustainable business? [LNB]Or do they have other plans in which the future of a football club founded in 1898 is of lesser importance?[LNB]Farmery said: 'There has been a lack of communication from the newowner and conspiracy theories have multiplied to fill that vacuum.' [LNB]Portsmouthhave led a hand-to-mouth existence since Al Faraj's takeover, failingto pay their players on time and firefighting to keep creditors - fromthe taxman to rival clubs - at bay. [LNB]Small-scale injectionsof cash and guarantees from Al Faraj and emergency loans from Chainraiand other sources unknown have kept the club on life support but thereis no sign of the refinancing required to put them back on their feet. [LNB]AsPortsmouth fight to survive on and off the pitch, fans voice theirfears for the club's future believed a deal with two different bankscollapsed two weeks before Christmas and the future ownership and useof the land around the stadium is key to the club's chances ofconvincing long-term lenders that they are good for their money. [LNB] Miland Development 2004 was created by then club owner MilanMandaric to drive the redevelopment of Fratton Park and to this end thecompany bought the five parcels of land in 2004-5. [LNB]Planswere drawn up to sell the car park land - supermarket giant Tesco has,or at least had, a strong interest in the site - and put the proceedstowards rotating the stadium 90 degrees, by using the other main chunkof land to the north-west of Fratton Park and creating a 30,000-seaterarena with proper corporate hospitality and facilities. [LNB]Mandaric also looked at selling the whole site, moving the club to an entirely new complex. [LNB] [LNB] [LNB] Under Gaydamak, plans for a new stadium at two waterfront locations were unveiled with great fanfare but the property market crash and global recession put paid to those dreams. [LNB]There was a deal in place for him to sell the land to short-term owner Sulaiman Al Fahim and then to Al Faraj but that lapsed on November 30, when Gaydamak repaid a £2.5m working capital overdraft to Barclays Bank, taking the money he is claiming from the club to over the £30m mark.[LNB] Is Arab businessman Al Faraj, through an unlikely-sounding alliance with Israeli moguls, in a better position to fund a development if a deal is reached with Gaydamak?[LNB] If so, what would their plans be? [LNB] Chainrai, the current regime at Fratton Park insist, is merely a financial facilitator whose interest in Portsmouth goes no further than getting his money back with interest, but he and Al Faraj are not operating at arm's length. [LNB]The Land Registry document for Fratton Park gives the address of Fuglers solicitors, the company where Portsmouth director and Al Faraj representative Mark Jacob works, as the contact point for Portpin, the company through which Chainrai lent money to the club and which holds the stadium as security. [LNB]Whatever Chainrai's motives, the Al Faraj family have been openly presented as people with extensive interests in property. [LNB]The same is true of Israeli lawyer Yoram Yossifoff and businessman Roni Mana, who both claim to be advising the club.[LNB] A property deal of some kind is probably necessary if the club are to survive, let alone thrive.[LNB] But there is a deal to be done regardless of what division Portsmouth are in next season, regardless, in fact, of whether there is a football club there at all. [LNB]Portsmouth City Council, who gave the club their stadium site 77 years ago, would look carefully at any planning application which demolished Fratton Park without Portsmouth having a new home to go to. [LNB]But there is no legal restriction on how the land can be used and any assurances given to Gaydamak in the event of him selling the land around Fratton Park would be hard to enforce. And what if the football club went out of existence? [LNB]The Premier League will do everything in their power to stop a club going bust part of the way through a season but the taxman is less sentimental and the February 10 date for the winding-up petition to be heard will loom large if Portsmouth's bid to strike it out fails tomorrow. [LNB]Cannon says the day of reckoning may only be delayed. 'The summer could bring a major crisis for Portsmouth,' he added. [LNB]'Whether the club are in the Championship or the Premier League, football authorities will want to be sure they will complete next season's fixtures. [LNB]'In some ways, administration and the restructuring of their debt could be the best option. Other clubs have done that and recovered but it is not clear if Portsmouth would be able to come out of administration.' [LNB]And if the club ceased to exist, a sale of Fratton Park and the surrounding land would become a far simpler deal.[LNB] PORTSMOUTH FC: All the latest news from across the webZola facing the axe from West Ham's new ownersManchester United fans maintain there is no positive future with the Glazers[LNB] [LNB]
