Suppose the SMC was run by an independent company.

City come along and say "We want a new pitch". The other tenants say "We're happy with the pitch as it is - it's got another 5 years projected life in it anyway."

City come along and say "We want new floodlights (for Sky HD broadcasts)". The other tenants say "We're happy with the floodlights as they are. Lamps have all been replaced every 2 or 3 years during regular maintenance."

City say they'll fund what they want, but it'll cost the SMC £300k a year. And they'll want all the loans repaid in full.

Tricky.

Nothing will come of this. Allam will probably move his pitch to the bubble and the council will leave it there with Allam still controlling the SMC. Only way out of this is Council give Allam the KC on the proviso he then funds our own new ground

I agree its complex which is why getting the Council lease back of Assem Allam isn't the end of the KC's problems. It may be the start of more problems.

In the first 4 years the SMC was making profits of over £300,000 a year to give the Council income of around £15,000. A large chunk of that profit came from the Council renting space for the library and other offices. That was when maintenance costs were low, it was a brand new stadium covered by various warranties. The KC isn't a goldmine that has been badly mismanaged, it struggled to make a decent profit in the good times without the help of the Council and now it faces a sorry looking structure in need of lots of tender loving care. But that is becoming increasingly expensive.

When it was sold to Bartlett he received a salary, took out a charge on the lease and the profits dropped as did the payments to the Council. Assem Allam said that under Bartlett maintenance was neglected and he has had to pay for improvements that should have been done under the previous regime. I have no reason to doubt him and he has invested money in the KC and the pitch.

Under Assem Allam the SMC has made losses. There is no obvious payments out to Assem Allam, Allamhouse or Hull City Tigers Limited. In fact money has flowed in from the football club as loans. To me that suggests running the KC and the Arena isn't profitable. The only was to make it profitable is to increase the rents paid by FC and City. If the Council terminate the lease and try and get someone to take over the running of the KC they will face the same problem. The people taking it over will have to pay for the repairs and hand it back in a pristine condition. They may find somebody but would they be the right person? I have my doubts.

We cannot change the past but we can learn from its mistakes.

I want to see the Council terminate the lease, take on the running of the KC, issue proper tenancies to City and FC, increase the capacity, develop the land around the KC to provide additional sources of income for the running costs and if, a big if, Assem Allam sells Hull City develop a partnership similar to the one Manchester Council has with Manchester City, albeit on a smaller scale.

If Assem Allam was capable with working with others in a spirit of cooperation we'd have had all that already.

Obadiah, I edited my earlier post as I mentioned you as making the error with regard to the financials, it was of course Phil Webbo I should have attributed it to as part of my point re the complexity of the situation
Apologies

Apology accepted. I didn't think the comment was aimed at me personally but a general its not just about the money. If it was just the money a solution would be simple. Assem Allam's hatred of the Council makes everything ten times more difficult then it should be, in my view.

I may be wrong and will check the SMC accounts later. But your view of "the good times" is probably different to mine. IIRC the SMC was set up around 2003 and made a cumulative modest profit until the Allams took over, ie for 7-8 years, but importantly even since then the underlying profit before dealing the mortgage/debt exceptionals is not the disaster you imply. Think back to 2003, FC's gates were low and City weren't in the Premiership. I don't know what the increase in utilisation/combined attendances is, but reckon it's substantial and leveraging that should at least partially offset the increased maintenance costs. I'll have a look tonight at underlying profit over the full period. As we've discussed on here before, the supposed P&L impact of Hull FC between 2010 and the latest "view" implies a seismic escalation in costs since the first set of accounts Assem approved as director. Convenient.

Even though I left Hull many moons ago the actions of councils and various trusts (we have a very powerful so called charitable 'foundation' here in Letchworth Garden City whom own most of the towns land and commercial property) are very much to the fore for me. They are entrusted to do the right thing for the community and often as not they don't.

This is a classic situation where the council's hand has been forced to act, if it could have being allowed to just ignore the situation it would have done, otherwise why wait so late in the day to act?
I completely agree with Mrs Barista, what Phil Webbo describes is the MINIMUM EXPECTED action that the council should be doing to resolve this. It's being pretty obvious to all and sundry that the mismanagement of the SMC has had a direct effect not only on the rugby club but also the soccer club too, add in the the rest of the community issues that crop up and anything else you might want to throw in it's just incredible that the council have buried their heads for so long going back years. Failing to act to ensure proper management & running of their assets.
Not content with swishing down the gurgler the opportunity to actually make the stadium/arena etc into a real community place they allowed private individuals (the present meglamaniac included) to push and push, take and take and act without any consideration or integrity to the citizens of Hull.

Frankly it makes my blood boil seeing such an amazing stadium/set up that could have been so so much more, squandered and wasted on the back of rank and brazen profiteering.

Obadiah - do you have any idea what actually happened at that very first meeting to make Allam hate Geraghty and the council so much? Could the cause of the offence really be so trivial as to be the clothes the councillors were wearing, for example, as some reports suggest? I also find it unbelievable that he hasn't been philosophical regarding the "slights" whatever they were bearing in mind that cooperation with the council was crucial to acquiring the stadium - the whole pivot to the success of this venture as far as he's concerned - and try to overcome the feud. Instead, he's quite happy to never, ever forget even to the detriment of his own strategy. Crazy business decision.

If Allam is as petty as he appears, it's astonishing he's made the fortune in business he has - how has he ever managed to successfully negotiate business deals without mass fallouts?

Allam is an enigma which makes no sense.

Bob on the money, if it smells like a rat and looks like a rat under the gerbil coat it probably is a rat, it certainly doesn't add up the huge disparity, it's not even that difficult to conjur it up but the council as I've hinted at weren't interested so long as it wasn't 'costing' them..

I've only got the last set of Bartlett's accounts and they are abbreviated so I've no idea how the profit figure is made up.

Since Assem Allam has taken over the Council have closed the library and abandoned the offices. The £80,000 that the Council paid will have boosted the profits of the SMC. As far as I can see this loss of income has not been replaced. Given the current state of the Council's finances its unlikely to be replaced under a different owner.

Yes there has been an increase in income, especially from Hull City, but that has been eaten up by the costs of maintaining the stadium. Some of the balance sheet items are one offs but the trend under Assem Allam has been for operating costs to be greater than revenue. I see in evidence of any directors remuneration, management charges or other direct benefits to Assem Allam or his companies. It looks like loans from Hull City have funded the losses and the payments to RBS.

I have ignored the City/FC comparisons they include assumptions about how much you should contribute to the SMC staff and other expenditure. As with all assumptions they show different things if they change.

It is possible that the overall costs are genuine and rising. Which is what I'd expect as the stadium ages.

I don't imply any disaster. I just like to have a rough idea of how deep the water is before I jump in. The world has changed since 2003, not least by how much investment Bartlett should have made in the stadium but didn't and what the long term consequences of that will be.