Wednesday, 18 July 2018

Club given new terms for £100,000 loan

HENLEY Rugby Club says the £475,000 redevelopment of its clubhouse is on track despite Henley Town

HENLEY Rugby Club says the £475,000 redevelopment of its clubhouse is on track despite Henley Town Council changing the terms of its loan.

The council has already approved the £100,000 loan and a separate grant of £100,000 towards the work.

It has agreed the club can pay back the money over 20 years with an interest rate of 2.78 per cent for at least five years and for a two-year “holiday” before any payments are due.

But it has rejected a request for the rate to be fixed for the whole repayment period.

At a meeting last week, members of the council&rsquos finance committee said the interest rate should be reviewed every five years to protect taxpayers&rsquo money.

The club says it will now have to go back to its members, who had approved its suggested terms.

The move comes just weeks after work on the redevelopment at Dry Leas began. The initial phase is due to be completed before the Hawks&rsquo first home game of the season against Chinnor in September.

Club chairman Mike Trethewey said that while the change in the terms of the loan was unexpected, it would not affect the building work.

He said: “We have been discussing the loan for some considerable time. There&rsquos no doubt we will get it, it was just about the conditions attached to it.

“We thought we had come to an agreement with those conditions but at the meeting they were slightly different from what we had anticipated.

“We are quite happy apart from the one point of dispute, which is the interest rate. We got membership and board approval for the fixed 2.78 per cent rate and now we have to go back to them.

“The fixed rate allowed us to calculate forward with absolute certainty. When it&rsquos variable you don&rsquot have that certainty. We are talking about 20 years here and the board will be a completely different set of people in 20 years and we can&rsquot commit the club to terms and conditions we aren&rsquot totally happy with.

“We will have to sit down and consider the best way to manage that and find a solution. We have a good relationship with the council.

“It won&rsquot put the project in jeopardy at all. The work itself is fine and proceeding as scheduled.”

The first phase of the four-year redevelopment involves internal refurbishment including a new kitchen and a bar extension.

The second phase, costing £300,000, will be to add a changing room block with a single-storey extension on the western side of the building. This will include toilets and means the club will meet Rugby Football Union standards.

The club also has a £100,000 loan from the RFU, a £100,000 grant from South Oxfordshire District Council and has raised £300,000 from members.

Speaking at the meeting, Mr Trethewey revealed that Invesco Perpetual, the Hawks&rsquo major sponsor, had recently scaled back its investment, costing the club about £50,000 a year.

He said: “The fact that hasn&rsquot put us under is testament to how far we have come. The first time I stood here and spoke years ago, our finances were in a shocking state and we were close to not existing. A council working group and a grant got us back on track.

“Within a few years we can have a clubhouse that will bring in £40,000 but that won&rsquot happen from day one. With everything else we pay we are about breaking even.

“We have been too dependent on sponsorship income which, as we have found out, can be there one day and gone the next.”

Mr Trethewey said the clubhouse would generate income through parties and events and caterers 81 Events would pay commission on food and drink sold.

Councillors said they were happy with the repayment schedule, provided interest continued to accrue during the two years before the repayments began.

Councillor Stefan Gawrysiak said: “This is a £100,000 loan that I think the council should be investing in the rugby club and a repayment period of 22 years is perfectly reasonable.

“I would have thought we should be helping the rugby club and making sure the new things they are doing are well-embedded. This is a loan to a club which is providing a sport service to Henley.”

Councillor Dylan Thomas suggested the interest rate should be reviewed every five years.

He said: “I want us to be fair to all the sports clubs in the town and the cricket club recently came to negotiate on their loan and interest. This seems to be more favourable than what we agreed with them. It&rsquos a fantastic interest rate and I&rsquom concerned that it&rsquos fixed for the whole period.”

Councillor Ian Reissmann said a five-year review was “perfectly fair and reasonable”, adding: “It is to protect both ourselves and the rugby club. Interest rates can go down and up.”

Councillor Jane Smewing said she wouldn&rsquot accept an interest-free period on the loan.

She said: “We have given £100,000, which is three times what we have given to anyone before, excluding the YMCA. Loaning another £100,000 and an interest-free period of two years is too much. We have to insist on getting the interest one way or another.”

Councillor Martin Akehurst added: “I have every faith in the rugby club but as councillors we have a responsibility to taxpayers. We need to be seen to be doing the right thing.”

• Invesco Perpetual, the main shirt sponsor last season, is set to be replaced by housebuilder Crest Nicholson, which hopes to redevelop Highlands Farm in Henley.

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