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Just to add, from what I know about business, real-estate and how these sorts of things are done, this is a common way of doing business.

 

However, another scenario which is also possible is that the club is funding the development of the hotels/casinos etc. but will let someone else come in and run it (and put a name on it eg. Hilton/Marriott etc.). Tbh, I've seen this type of deal happen more than the previous one that I mentioned. This kind of deal works well for both parties because even though the club is putting money into the development, they have a guaranteed 'return' ie. the investors (the hotel investors) have to pay a certain amount back to the club each month/year. I believe that this 'return' is being invested in the development of the ground. So technically, one could say that the money spent on the ground can actually be spent on the team, but even if this is the case, I'd rather we spend money on the ground than give it to Roeder to spend. It'd be similar to giving Souness £50m to spend, just not worth it.

 

For the last time it is privately financed.

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It's really hard to figure what kind of deal the club has structured with the investors when looking from the outside perspective. The first deal that I mentioned would be a masterstroke from Freddy, the second one a much more common deal but yet, it will still benefit the club.

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Guest ToonDoom

I am quite skeptical that the development to the ground will ever happen.  In the article the plans for the hotel, conference center and flats are clear and defined.  The ground enhancement is referred to as something Newcastle will "push for".  If the news had come out minus the ground development people would have not much cared, it may have even been received with negativity (comparisons with Chelsea).  Now the club gets positive press for something that will hit a planning hiccup or be denied planning permission. 

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Parky, I know it is privately funded. I believe I was one of the first to actually explain how this kind of deal works. An explanation which you agreed with.

 

Does anyone know how the deal is set up? Can you just borrow £300m to build something with only the building itself as security on the loan?

 

It's not technically borrowing. The hotels and stuff won't be owned by the club, so we don't technically have to borrow any money to build all that. Someone else is doing that and they'll own it, the club will still own the land though and get a 'free' ground extension.

 

 

If that is the case and it sounds like it is....It's a very good deal for us...

 

 

However, none of us knows the ins and outs of this deal. And there are other possible scenarios - that's all I'm saying.

 

PS. I didn't see you show your fantastic knowledge of the world of real-estate before other people, myself included, explained how it works.

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Some of the speculation on here is brilliant!  Quite simply, the club does not have the funds in place to finance the developent itself.  I am assuming that in this case, the club will be putting up the land as its "equity" in a Joint Venture with another party, which may or not be the contractor itself (very often the contractor is a 3rd party which means the two JV partners get a better price by putting it out to tender).  The rest of the funds needed will be borrowed from a bank within this seperate JV entity.  The risk is thus ring fenced in the JV entity but clearly the land will be put up as security.

 

When the development is completed or hopefully well before (as in the case of a hotel) - the hotel/apartments will be sold either on a long leasehold or freehold.

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Some of the speculation on here is brilliant! Quite simply, the club does not have the funds in place to finance the developent itself. I am assuming that in this case, the club will be putting up the land as its "equity" in a Joint Venture with another party, which may or not be the contractor itself (very often the contractor is a 3rd party which means the two JV partners get a better price by putting it out to tender). The rest of the funds needed will be borrowed from a bank within this seperate JV entity. The risk is thus ring fenced in the JV entity but clearly the land will be put up as security.

 

When the development is completed or hopefully well before (as in the case of a hotel) - the hotel/apartments will be sold either on a long leasehold or freehold.

 

It's rare for someone to actually have the funds to acquire the land, develop it and run a business on it. From my experience, there's always two or three main parties involved; one to acquire the land (the main financier), one to develop it (a minor entity ie. the contractor to build the hotel), and lastly, one to run a business on it (the second main entity eg. hotel owners).

 

The only times I've seen this happen is when the second main entity ie. the person who is last in the chain, has enough funds to acquire the land and develop it. Since we seem to be the first main entity, it'd be stupid of us to pretend we know anything about running hotels. Much better off this way imo.

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Guest Gemmill

Some of the speculation on here is brilliant!  Quite simply, the club does not have the funds in place to finance the developent itself.  I am assuming that in this case, the club will be putting up the land as its "equity" in a Joint Venture with another party, which may or not be the contractor itself (very often the contractor is a 3rd party which means the two JV partners get a better price by putting it out to tender).  The rest of the funds needed will be borrowed from a bank within this seperate JV entity.  The risk is thus ring fenced in the JV entity but clearly the land will be put up as security.

 

When the development is completed or hopefully well before (as in the case of a hotel) - the hotel/apartments will be sold either on a long leasehold or freehold.

 

It's rare for someone to actually have the funds to acquire the land, develop it and run a business on it.

 

Write the feem toon, sing the feem toon. :lol:

 

Sorry, I don't know why that made me think of that.

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Parky, I know it is privately funded. I believe I was one of the first to actually explain how this kind of deal works. An explanation which you agreed with.

 

Does anyone know how the deal is set up? Can you just borrow £300m to build something with only the building itself as security on the loan?

 

It's not technically borrowing. The hotels and stuff won't be owned by the club, so we don't technically have to borrow any money to build all that. Someone else is doing that and they'll own it, the club will still own the land though and get a 'free' ground extension.

 

 

If that is the case and it sounds like it is....It's a very good deal for us...

 

 

However, none of us knows the ins and outs of this deal. And there are other possible scenarios - that's all I'm saying.

 

PS. I didn't see you show your fantastic knowledge of the world of real-estate before other people, myself included, explained how it works.

 

It wasn't directed at you it was more a scattergun approach. I never pretended to have real-estate knowledge btw.

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The Gallowgate expansion isn't so much part of the strategy, more a practical consideration.

 

Once there are hotels, conference centres and the like on the Metro car park then further development of the Gallowgate end would be a logistical nightmare. It makes sense both financially and in terms of the engineering to 'set up site' once with plenty of space to work in (especially for plant access and the like which can be an expensive headache on a city centre job).

 

Sooner or later, we'll be better than we are now and we'll probably shift those seats. So based on a reasonable long-term expectation, the club are right to strike while the iron is hot off the pitch if not on it.

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Guest Hibbits left foot

Reminds me of Bill Hicks and his Gulf War Distraction rant ; "We hope you enjoyed your fireworks show!" This seems to be all smoke and mirrors , the timing is well suspect ( straight after another chorus of sack the board and shepherd out on saturday )think about how youre going to sell 52,000 tickets per game next season Freddie never mind 60,000 sometime in the future.

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Some of the speculation on here is brilliant!  Quite simply, the club does not have the funds in place to finance the developent itself.  I am assuming that in this case, the club will be putting up the land as its "equity" in a Joint Venture with another party, which may or not be the contractor itself (very often the contractor is a 3rd party which means the two JV partners get a better price by putting it out to tender).  The rest of the funds needed will be borrowed from a bank within this seperate JV entity.  The risk is thus ring fenced in the JV entity but clearly the land will be put up as security.

 

When the development is completed or hopefully well before (as in the case of a hotel) - the hotel/apartments will be sold either on a long leasehold or freehold.

 

It's rare for someone to actually have the funds to acquire the land, develop it and run a business on it.

 

Who is saying that?

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Total shocking timing to announce this imo.

 

BUT, it is a chance to create a singing section or go the whole hog and be the first club to introduce safe terracing so for an extra 8,000 seats we could fit an extra 16,000 in there standing.

 

Just a thought.

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Has anyone not thought of the possibility that they might shift existing season ticket holders in the gallowgate to make way for fancy corporate seats?

 

Glad I'm in the Leazes; I'd hate to think I'd be shifted to a Level 7 view.

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Guest Invicta_Toon

Has anyone not thought of the possibility that they might shift existing season ticket holders in the gallowgate to make way for fancy corporate seats?

 

Glad I'm in the Leazes; I'd hate to think I'd be shifted to a Level 7 view.

 

Fred woud never do that to the fans. Not the fans! the lifeblood of the club!!!!111

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Guest Invicta_Toon

Some of the speculation on here is brilliant!  Quite simply, the club does not have the funds in place to finance the developent itself.  I am assuming that in this case, the club will be putting up the land as its "equity" in a Joint Venture with another party, which may or not be the contractor itself (very often the contractor is a 3rd party which means the two JV partners get a better price by putting it out to tender).  The rest of the funds needed will be borrowed from a bank within this seperate JV entity.  The risk is thus ring fenced in the JV entity but clearly the land will be put up as security.

 

When the development is completed or hopefully well before (as in the case of a hotel) - the hotel/apartments will be sold either on a long leasehold or freehold.

 

I said it was probably a joint venture pages ago

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Guest stormrider

I just stopped all attempts to try and understand this club. Hopeless, don't even try that out.

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Guest Invicta_Toon

I just stopped all attempts to try and understand this club. Hopeless, don't even try that out.

 

what's not to understand? Freddy likes money.

 

its fucking simple tbh

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Guest TheOrder

Our attendances will reflect our results and performances. If Freddy wants 60k, he'll have to improve the squad and obtain results.

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