HRH quest to purchase the club's assets - Star article

[Sean Thornton]

I will stick to the facts mate. You keep speculating.

17 million. Never in a million years.

 

[I should coco]

With regards to building a loss making hotel anyone with any knowledge of business would know the answer. You start a business to make a profit, but sometimes it just doesn't happen. The hospitality industry is notoriously fickle. Having stayed at the hotel I can say it's very nice, but food and drink there is expensive, as you would expect.

People conveniently forget the rationale for building it in the first place. Like the Business Centre, the aim was to give the club additional revenue that was not dependent on the form of the team and earned all year round.

For whatever reasons the hotel is not profitable, so rather than leave it as a drain on the club, KM swapped it for further loans. Of course we all know he really swapped it to personally benefit from the oil/ gold/ frankincense/ myrrh underneath it, that only he knew about.

If you don't like McCabe then you see malice and greed in everything he does. Personally I'm glad he's been here to fund us through the last 18 years. Not many other people would have carried pouring money into the basket case that is our football club.

#weerssemifinalmunehgone

 

[Nicolaus_Copernicus]

Before any property development is seriously considered, an appraisal is carried out to assess the viability of the scheme. The viability is based upon the profitability, after land costs, build costs, professional fees & sales values are taken into account. The % return in most cases needs to be above 20%. In the case of Hotels, the figure is higher because they are more risky. It is usually the case that pre-construction a tenant is sought, the terms of the lease are agreed and an agreement for a lease entered into, contractually binding the parties. It is usually the case that the Lease is for at least 25 years, and has rent reviewed every fifth year upwards. The Tenant is usually an established hotel operator. The finished building, the quality of the Tenant and the level/duration of the income stream when combined, represent an investment which is then sold by the developer to an investor. For whatever reason, this strategy wasn't followed at the hotel, as it seems that copthorne operate the place on behalf of us. Although the whole thing appears to lose us money, it also gives us greater flexibility on what we do with the property, as there is no Lease to break. It may be the case that we have a strategy to enter into a Lease at some point in the future, or it may be the case that we will apply for PP for a change of use in the future for either private residential or student accommodation, which evidence of the financial unsuitability of a hotel would support. If KM wanted to sell the Hotel, it would be relatively straight forward and could be achieved within 6mths.

 

[raul]

People conveniently forget the rationale for building it in the first place. Like the Business Centre, the aim was to give the club additional revenue that was not dependent on the form of the team and earned all year round.

For whatever reasons the hotel is not profitable, so rather than leave it as a drain on the club, KM swapped it for further loans. Of course we all know he really swapped it to personally benefit from the oil/ gold/ frankincense/ myrrh underneath it, that only he knew about.

If you don't like McCabe then you see malice and greed in everything he does. Personally I'm glad he's been here to fund us through the last 18 years. Not many other people would have carried pouring money into the basket case that is our football club.

#weerssemifinalmunehgone

2/10. You forgot to mention wages.

 

[UnitedBlade]

People conveniently forget the rationale for building it in the first place. Like the Business Centre, the aim was to give the club additional revenue that was not dependent on the form of the team and earned all year round.

For whatever reasons the hotel is not profitable, so rather than leave it as a drain on the club, KM swapped it for further loans. Of course we all know he really swapped it to personally benefit from the oil/ gold/ frankincense/ myrrh underneath it, that only he knew about.

If you don't like McCabe then you see malice and greed in everything he does. Personally I'm glad he's been here to fund us through the last 18 years. Not many other people would have carried pouring money into the basket case that is our football club.

#weerssemifinalmunehgone

Exactly. The hotel forms part of the revenue base to help the football club. It was devised and built around the financial crash so will have suffered from higher lending costs and valuation write downs.

I thought I’d look up the pay back period for hotels and it’s 15 years. No idea if this is on track or way behind but it makes sense to be included in the property sales when McCabe decides to go subject to a price negotiation.

Looks good value compared to the current payback of running a football club. People still seem to believe that McCabe and the Prince aren’t both pouring millions in every season.

And as Nic Cop says if it is a long term basket case they could apply for change of use.

 

[Nicolaus_Copernicus]

Exactly. The hotel forms part of the revenue base to help the football club. It was devised and built around the financial crash so will have suffered from higher lending costs and valuation write downs.

I thought I’d look up the pay back period for hotels and it’s 15 years. No idea if this is on track or way behind but it makes sense to be included in the property sales when McCabe decides to go subject to a price negotiation.

Looks good value compared to the current payback of running a football club. People still seem to believe that McCabe and the Prince aren’t both pouring millions in every season.

And as Nic Cop says if it is a long term basket case they could apply for change of use.

The fit out of a new hotel is a massive cost.

 

[Sean Thornton]

Exactly. The hotel forms part of the revenue base to help the football club. It was devised and built around the financial crash so will have suffered from higher lending costs and valuation write downs.

I thought I’d look up the pay back period for hotels and it’s 15 years. No idea if this is on track or way behind but it makes sense to be included in the property sales when McCabe decides to go subject to a price negotiation.

Looks good value compared to the current payback of running a football club. People still seem to believe that McCabe and the Prince aren’t both pouring millions in every season.

And as Nic Cop says if it is a long term basket case they could apply for change of use.

Well apparently the Prince hasn't put £17m in despite legal documentation showing that he has being available for free. I'm just glad I didn't "speculate" on McCabes input into BL and SUFC. what a can of worms that could have opened.

 

[Sean Thornton]

Before any property development is seriously considered, an appraisal is carried out to assess the viability of the scheme. The viability is based upon the profitability, after land costs, build costs, professional fees & sales values are taken into account. The % return in most cases needs to be above 20%. In the case of Hotels, the figure is higher because they are more risky. It is usually the case that pre-construction a tenant is sought, the terms of the lease are agreed and an agreement for a lease entered into, contractually binding the parties. It is usually the case that the Lease is for at least 25 years, and has rent reviewed every fifth year upwards. The Tenant is usually an established hotel operator. The finished building, the quality of the Tenant and the level/duration of the income stream when combined, represent an investment which is then sold by the developer to an investor. For whatever reason, this strategy wasn't followed at the hotel, as it seems that copthorne operate the place on behalf of us. Although the whole thing appears to lose us money, it also gives us greater flexibility on what we do with the property, as there is no Lease to break. It may be the case that we have a strategy to enter into a Lease at some point in the future, or it may be the case that we will apply for PP for a change of use in the future for either private residential or student accommodation, which evidence of the financial unsuitability of a hotel would support. If KM wanted to sell the Hotel, it would be relatively straight forward and could be achieved within 6mths.

Assuming there's a buyer of course. But.

Depending on the initial agreement with the Prince, it may not have been possible to sell it to anyone other than HRH with an option to purchase in place.

 

[I should coco]

The hotel forms part of the revenue base to help the football club.

How many time have people stated that it is not owned by the club? KM took it in exchange for further loans to plug losses years ago.

People still seem to believe that McCabe and the Prince aren’t both pouring millions in every season.

Good point and we know that really they're taking millions out. The Prince didn't have two bob to rub together before he got involved and now he's buying clubs in Belgium and investing in property.

Paying a £1 for 50% of United has been a right money spinner for both of them.

 

[Sean Thornton]

The fit out of a new hotel is a massive cost.

The accounts valuation of the hotel is considerably less than the actual building costs.

 

[Nicolaus_Copernicus]

Assuming there's a buyer of course. But.

Depending on the initial agreement with the Prince, it may not have been possible to sell it to anyone other than HRH with an option to purchase in place.

And that's probably a fair description of the current situation.

 

[RedandWhite]

That picture looks weird on so many levels, for one it looks like the chap on the right is about to bash the Prince off but we need to confirm whose hand it is first?

I'm hoping he has his hand in his pocket. If not, then he's seen something he really likes

 

[The Crab]

For whatever reasons the hotel is not profitable, so rather than leave it as a drain on the club, KM swapped it for further loans. Of course we all know he really swapped it to personally benefit from the oil/ gold/ frankincense/ myrrh underneath it, that only he knew about.

Utter bollocks. Underneath there is a Jam Butty Mine. Can you not connect the dots between the boardroom battle and the demise of dear old Ken Dodd? Ken wanted a bigger cut, and that wasn't going to happen.

 

[Sean Thornton]

Utter bollocks. Underneath there is a Jam Butty Mine. Can you not connect the dots between the boardroom battle and the demise of dear old Ken Dodd? Ken wanted a bigger cut, and that wasn't going to happen.

Dodds Dads dead dog couldn't even get in the Lane when it was alive even owning a slice.

 

[Maidenhead]

Yes, that has been pointed out by Sean Thornton and others previously, but I still ask what prompted this action weeks ago if HRH is not interested in buying KM 's assets until he knows which division we are in next season?

Maybe McCabe has other wealthier backers lined up but needs the Prince out of the way first.

I would be very surprised if the Prince isn't gone at almost the same moment it becomes impossible for us to be promoted this season.

If we should happen to fluke promotion it could get really interesting but also a distraction that we don't need.

 

[Maidenhead]

Invoking the clause could be Mr McCabes way of saying show us your money or ship out, who knows. The Prince hasn't made public as to what he intends to do so it's all guesswork at the moment. Hopefully it will become clearer at Saturday morning meeting.

Exactly as I see it, and understand it to be.