Decision details

The Cabinet Member with the Health and Housing Portfolio introduced the report of the Director of Economic Growth and Neighbourhood Services (previously circulated) updating Cabinet on Darlington Mowden Park’s (DMP) proposal for a Darlington Sports Village (DSV) and seeking agreement to the approach as detailed in the submitted report.

The submitted report outlined the background to the proposal to develop the DSV and its funding; the proposals contained in the DMP business plan that had been received in October 2019; stated that the Council commissioned Grant Thornton to carry out a due diligence exercise to assess the deliverability of the scheme and test the key assumptions and the risks which could be potentially exposed to the Council; and outlined the areas analysed in relation to the development of the Sports Village including a financial analysis of DMP and two subsidiary companies, a review of key assumptions in the business plan and a valuation of tangible Joint Value inputs.

It was reported that following receipt of the Due Diligence report officers had met with representatives of Darlington Mowden Park Rugby Club (DMPRC) and explained that due to the conclusions of that report, it was highly unlikely that the Joint Venture with DMPRC to develop the Sports Village would be supported; DMPRC had now confirmed that they had identified a new source of financial support which they had used to settle their outstanding debt; this had released the Council from the £2.1m guarantee had been agreed by Cabinet; and that this did not in any way compromise the ongoing interest the Council holds in the Arena land relating to overage payments and covenants on future use of the land.

Discussion ensued on how that funding could be used for the development and provision of sports facilities in the Borough.

RESOLVED - (a)  That given the risks, as detailed within the due diligence report on the Sports Village Business Case, it be agreed that the plans for a Joint Venture with Darlington Mowden Park, on the development of a Sports Village, not be progressed.

(b)  That the Council maintains its interest in the Arena and surrounding land in terms of overage payments and covenants relating to future land use.

REASONS - (a)  The conclusions of the due diligence report highlight several financial and reputation risks to the Council which cannot be mitigated.

(b)  Protects the Council from future financial implications and commitments.