Stadium Project — Status Report - 1 March 2009 During the first half of 2008, the working-up of a scheme for a proposed new stadium was driven by a Council desire to retain Wasps, against a backcloth of rumoured relocation offers and RFU capacity rules. This resulted in a proposed Exclusivity Agreement with Wasps (and Wanderers) — to ‘lock-out’ competing (relocation) bids — with WSDL as the Clubs’ ‘agent’. The proposed Exclusivity Agreement was drafted 0 as to ‘lock-in’ the Clubs — by committing them to reimburse feasibility study costs of up to £0.25m, in the event that the feasibility outcome was positive, but the Club(s) opted not to proceed with a subsequent pre-let agreement. The proposed pre-let agreement was to have been based on the proposed new stadium being cross-financed by the Council, from the sale of ‘enabling development land, with the new stadium then being let to Stadco, a new stadium management company, owned jointly by the Clubs. In mid 2008, it became apparent that any competing developer-led stadium schemes were likely to stall. In addition, enquiries to the RFU resulted in their disclosure that rules requiring Premier Clubs to expand their stadia had in fact been dropped in May 2008 (which appeared to come as news to WSDL). Compounding the downtum was Wasps early season lack of success, with RFU stating that were Wasps to fall out of the Premiership, they would not be allowed back in if reliant upon groundshare. Late in 2008, the Council informed WSDL that it could not commit to developing a new stadium, based on cross-financing, because of the collapse of the property market and the recession. At the same time, WSDL informed the Council that the Clubs were unwilling to commit to the underwriting sought in the Exclusivity Agreement. Subsequently, the Council learned that Mr Steve Hayes had acquired controlling ownership of Wasps. WSDL has since had two meetings with the Counci's stadium project lead officers (23/12/08 and 10/02/09). In these meetings, WSDL have made it clear that they wish to press-on with the new stadium proposals, with a determination to implement them as soon as possible. This is driven by WSDL's aim of refinancing Wasps/Wanderers, by means of an extemal investor. The attraction to WSDL (and their potential investor) being a larger ‘sports village’ project along with the enabling development land. This amounts to a change from the original proposal, which raises the question: can the Council get into ‘partnership’ with WSDL, as against the Clubs and if so, on what basis. The concem being governance (Standing Orders/Best Consideration/State AidIOJEU), Each of these hurdles need to be addressed at the outset, otherwise there is a risk of whatever ‘partnership’ is progressed, crashing in due course (due to failure to adhere to process). They amount, in practice to risk management. For example, we have sought legal advice on one of the hurdles ~ State Aid, which indicates that there may be a way through this particular maze. However there is a more fundamental issue: we still have to satisfy ourselves that we would not be subject to an audit challenge, if we are to ‘partner with WSDL. For WSDL has no ‘special purchaser’ status (eg as an adjoining landowner). WSDL is, on the face of il, a ‘non-expert’ in terms of property — and specifically stadium - development. WSDL is a private limited company, not a transparent corporate 10/03109108/Staaium Project Status Report.docvehicle (eg a quoted PLC). WSDL's relationship with Wanderers — in particular its Supports Club as 50% shareholders — is not entirely clear. ‘The bottom line is that the Council has to be able to demonstrate why it intends to relinquish any control over its asset(s), were it to decide to do so. A possible added complication is the project work-up costs — specifically the cost of the proposed alteration to the WDF. If WSDL are to share in these costs, the Council needs to know that this will not prejudice the Council's position as planning authority. *o1030a/cAStadium Project Stans Report toe