PERTH Glory remains in the box seat to secure the naming, management and catering rights for Perth Oval even though the Town of Vincent rejected its tender.
Allia Holdings, a subsidiary of Perth Glory, was the only company to bid for the three tenders that were advertised by the council earlier this year. Burswood Catering was the only other company to put in a bid and that was only for the catering rights. Council rejected that tender too.
Town of Vincent CEO John Giorgi said council had been forced to reject Perth Glory’s bid because it did not meet the strictures of the Local Government Act, even though it offered the sort of deal the town had been looking for.
Mr Giorgi said he would negotiate with Perth Glory CEO Jeff Dennis to try and strike a suitable deal for Perth Oval.
Allia had insisted that it would not enter into a deal with council unless it accepted all three of its tenders.
Mr Dennis said it had been important to Perth Glory that it had control of the three aspects of the stadium management tenders so it could keep its costs down and bring in revenue to the club.
“At the moment we’re running a $1 million loss,” he said. “We’ve controlled the catering for the past seven years and been able to keep the costs down.”
Mr Dennis said Glory would need the revenue to cover the cost of running the stadium.
“Stadiums don’t make money,” he said.
Allia offered to pay council $250,000 a year for the catering rights plus $350,000 for fitouts that would remain the property of the Town of Vincent. Allia also offered to pay $150,000 a year for naming rights.
Mr Dennis said Perth Glory would onsell those naming rights.
Mr Giorgi said that Allia told council that anything over $250,000 in profit would go to the town.
In its management tender Allia had offered to pay no rent but said it would pick up all of the operating losses.
Those losses are expected to be $352,000 in year one, $221,500 in year two and $191,000 in year three.
Mr Giorgi said Allia had also offered assets including lights, signage and a scoreboard that were valued at more than $1 million.
However, he said one of the best points from the council’s point of view was that Allia was looking for a 20-year term because council had been looking for someone who would be there for the 20-year duration of the loan it would have to take to fund its $4.5 million contribution to the redevelopment of Perth Oval. Burswood Catering had only offered a five-year deal. It offered to pay council $70,000 for 12 games and $98,000 for 17 games and $175,000 for a fitout.
Mr Giorgi said Burswood had not offered to make any contribution towards capital works and would only contribute $2,000 a year into a sinking fund.
“They said they would contribute $2,500 towards premises maintenance and $15,000 total per annum for equipment,” he said.
Mr Giorgi said even if Allia was awarded the three tenders, Perth Glory would only be one of the tenants at the oval and would not own it.
“The days of councils giving clubs a peppercorn rent are gone,” he said.
It is understood Glory’s licence fee to use the ground could be $150,000 a year.
Tenders for the construction of the redevelopment have also closed and it looks to be a four-horse race between Broad Constructions, Entact Clough, John Holland and BGC.
While it has drawn the most attention, the Perth Oval deal is only a small part of the $20 million of capital works that is taking place in Vincent. Besides the oval reconstruction, council has spent $4.02 million on redeveloping Leederville Oval into a home ground for the East Perth and Subiaco Western Australian Football League clubs.
It is the first time two WAFL teams have shared the same home ground in WAFL history.
Council also voted to prepare a business plan for the construction of offices for the Department of Sport and Recreation at 246 Vincent Street, Leederville and put it out for six week’s public comment.
That project is valued at $6.5 million.
Mr Giorgi said the department had agreed to enter into a 15-year lease over those premises with an option of another 15-year extension and the loan would take 22.7 years to repay.
“After that time we’ll be gaining revenue of $414,000 a year based on today’s prices,” Mr Giorgi said.
The other major project for the Town will be the $3.5 million multi-purpose indoor sports centre. Vincent is expected to pay $1.3 million which Mr Giorgi said council expected to gain from the sale of seven blocks of land it owns.
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