As development opportunities dry up, retailers are investing in mixed-use sports stadia. But, as Sara McCorquodale finds, getting such projects off the ground isn’t easy
The devastating final whistle sounded across Ninian Park, signalling home team Cardiff City’s defeat by Ipswich Town in its last game on the ground. The result marked the end of Cardiff’s play-off hopes, but also of 99 years of playing at the historic ground.
But leaving the dilapidated stadium for good in April, the fans had something to cheer. Because for their next competitive match they would be seated in the state of the art £50m Cardiff City Stadium, thanks to the financial backing of an adjacent retail park. The doors opened in August, and triumphing over Scunthorpe 4-0 in their first game, for the club and fans, it was a new dawn.
Since 2003, seven of the 14 stadia built in the UK have been funded by retail investments and each has enabled a property deal benefiting both parties. Beleaguered sports clubs have moved to newly built, modern stadiums. Retailers desperate to expand have been granted space for new stores.
Following decades of high street growth and a government clamp-down on out-of-town shopping centres, property developers have had to come up with more innovative plans to develop more stores.
Deloitte senior sports business analyst Mark Roberts says: “Some of the conventional locations for retail development have already gone and from a retailer’s perspective it is prudent to open up pockets of land that perhaps wouldn’t be available to them. Developing a range of uses for the land so that it can be tied into the community is a good way of doing this.”
Narrowing site availability fuelled Asda’s motivation to get involved in the Cardiff stadium development in the city’s Leckwith area. Asda property communications manager for retail development Chris Marlow says: “There are fewer conventional retail development locations. Coupled with retail planning guidance becoming more challenging, Asda has responded by becoming more flexible in our approach. We have a range of store formats that can suit town centre, edge-of and out-of-centre locations. Leckwith Road is an example of a mixed-use regeneration project satisfying the needs of a number of development partners and stakeholders.”
He adds: “We did not have a store on the west side of Cardiff and the Leckwith Stadium proposal provided an excellent opportunity to address this development need for Asda.”
Cardiff City Stadium developers, PMG Estates, can vouch for the appeal of stadia retail partnerships as it found itself caught in a bidding war when developing the adjacent retail park. The company built the park, let the units and then invested in the development of the stadium.
PMG co-director Michael Hall said: “As time went on, offers from a lot of the bigger retailers flooded in – they all wanted to get involved. Without the interest from the stores we wouldn’t have been able to buy the land for the stadium. It simply wouldn’t have happened without this investment. It has been very advantageous for Cardiff as a whole. The stadium had £50m spent on it and £9m has been spent on the roads and infrastructure of the city.”
The community benefits have countered the inevitable sentimentality that comes with moving to a new ground.
Paisley team St Mirren moved from 115-year home Love Street, to the newly built ground St Mirren Park in January this year. Its old site was bought by Tesco and the new stadium was partially funded by the supermarket.
General manager of the club Brian Caldwell says: “Some of the fans were disappointed but they have more in St Mirren Park than they had in Love Street – roofs over the toilets, for example. It was a three-pronged approach from us, Tesco and Barr Construction to get this off the ground. Tesco approached us, and the new stadium was a way to help the club move forward. Our fans understand that.”
A leader in stadia retail partnerships, Tesco has been working with sports clubs since 2003 when it financed a superstore, car park and the adjacent Halliwell Jones Stadium in Warrington. In 2005, it bought land next to the Ricoh Stadium in Coventry and the retailer is now working on a regeneration project in St Helens.
A spokesman said: “Tesco has worked flexibly with the grain of the changing planning system to develop a range of formats and projects. We have led a number of mixed-use developments in recent years on brownfield sites and have extensive experience of innovative schemes.
“These schemes have featured a range of uses including in some cases sports stadia. These mixed-use developments improve a neighbourhood’s fortunes, not just in direct job creation but also by acting as a catalyst for further investment.”
One of the companies facilitating Tesco’s developments is Barr Construction. A spokesman for the company says: “There are not many major pitfalls in this kind of arrangement from our side of things, the real issues lie in land acquisition and planning. You need good sites and permission for both pieces of land to build the retail park and the stadium. All the ducks need to line up before you start. Planning permission needs to be in place for the stadium and the retail development – the retailers need to know both sites have been secured.”
Developing property with this method can be a satisfying experience for all involved. It leads to a surge in job opportunities and can turn the more rundown of football stadiums into new sites with corporate suites.
But the process is far from simple. Roberts says: “New stadium construction projects can face a number of intertwining challenges – selecting a suitable site, obtaining planning permission, managing construction cost, and securing funding – which can make stadium strategy and execution a time-consuming process.
“In the present economic environment the ability to secure enough funding to enable construction is seen as the biggest barrier and delay to new projects. Clubs that have been able to engage a variety of stockholders that have been willing and able to contribute to the construction of a new
stadium have seen their plans come
Even after funding is sourced and planning permission has been granted by local authorities, forces can still intervene and make the development seem like a pipe dream – as Everton is all too aware.
The Merseyside club has been working with Tesco to leave rundown ground Goodison Park and move to a new stadium in Kirkby. However, a public inquiry by the government has left the club and retailer in limbo.
Everton head of public relations Ian Ross says: “We just don’t know what’s going to happen now. If it’s good news we think it will be announced at the Labour Party Conference this week. If it’s not a positive then, we will expect the worst. We’re not one of those clubs that has a billionaire owner and I just don’t know how we could do this without financial backing.
“We’ve worked hand in hand with Tesco to make this happen. It really has been a team effort. And Terry Leahy’s an Everton season ticket holder, which is nice. We are just hoping the Government’s decision goes our way, this is the only option we have.”
Retail stadia partnerships
A short history
- Tesco finances a superstore, car park and the Halliwell Jones Stadium – home to rugby league team Warrington Wolves
- Morrisons builds a superstore on Falkirk’s old stadium
- Tesco buys land adjacent to Ricoh Arena, home to Coventry City
- Morfa Retail Park is built adjacent to the Liberty Stadium – playing ground of Swansea City and rugby union team Ospreys. The park includes Boots, Argos and Next
- Asda develops a superstore in Milton Keynes as part of the Stadium MK project. The ground is home to the MK Dons
- A retail park featuring Morrisons is built next to the Parc y Scarlets Stadium in Llanelli – playing ground of rugby union team Scarlets
- Tesco buys St Mirren’s old stadium at Love Street, and partially funds the new ground at St Mirren Park (pictured)