As we near the end of another very successful football season, and with the holiday period looming, it seems a good time to issue another CEO update to ensure all supporters are aware of what is planned over the summer.
1. Firstly, on the footballing front, Craig, Robbie and the coaching and backroom staff will be focused on implementing the squad changes they feel are necessary to ensure we continue to grow and improve as a major force in Scottish football. There will be changes. Some of our current squad will move on to new opportunities…and they will go with our sincere thanks and our very best wishes…other new faces will join the squad…and they will be warmly welcomed. The core of our young team will continue to develop, flourish and get stronger with each season that passes.
Following a break, which starts on 16th May, we look forward to seeing them all report back to training on 15th June…raring to go…as we prepare to take part in our first European competition since 2012. The draw will take place on 20th June, and as soon as possible thereafter we will keep you all fully aware of arrangements for both home and away games.
The fact that we are in Europe means, of course, that the pre-season programme will be somewhat limited. It is also worth noting that the new performance centre at Riccarton is scheduled to open officially in August, and will then provide the best training facilities in the country for our squads and our academy.
2. Off the field, too, we will be extremely busy. You all know about our plans to develop our main stand. A number of you came along to the public meetings which were held at Tynecastle last week, where you heard more detail of what we are planning, of how we are approaching the development and of the likely timescales.
In short, we are hoping to create the space needed for the larger stand by knocking down, not the current main stand, but the buildings behind the stand – the admin building, the shop building and the nursery. Before we can do this we will, of course, have to provide new temporary facilities which will be used during construction. The nursery will move to new facilities in Gerard’s Yard and everyone else will move into new facilities in the Wheatfield undercroft. Plans for these temporary facilities are currently being finalised. They should be ready for occupation in October, to allow the demolition of the old buildings in November of this year.
We will then commence the structural work for the new stand, building up and over and behind the current main stand…without impacting our use of current facilities throughout next season. We may seek to play the last two or three fixtures away at the end of the season, to allow us to start the work on the new seating and facilities in May 2017. Our objective is to complete the seating and essential services over next summer, enabling us to open the new stand for the beginning of the 2017/18 season. We will then continue the work behind the stand, to provide a new nursery, a new shop/ticket office, new community hub, etc, throughout the 2017/18 season, again without major disruption to match-day operations.
So, in short, we have a two-year development plan, starting very soon, which will see us have one of the finest stadiums in Scotland…with a capacity of 20-21,000…and UEFA standard facilities.
However, all of this is still at pre-planning stage and we still have to get the Health & Safety Executive (HSE) approval and be granted full planning permission by the City of Edinburgh Council before this can go ahead. So…yes, it is exciting…but let’s not get ahead of ourselves. There are still obstacles to overcome. We will do everything in our power to overcome these obstacles but nothing is, as yet, guaranteed…and it is possible that delays could put things back by up to a year. We will, of course, keep you all posted.
3. Funding plan for stadium redevelopment
I am sure you all want to understand how we are planning to fund this major project. Our estimates of cost are circa £11m. Allowing for some contingency (10%), we are working to a budget of £12m.
Our funding plan is, in summary, as follows.
- Financial Reserves from the club: £3m
- Benefactor Contributions: £2.5m
- Commercial Contributions: £0.5m
- Total available today: £6m
Clearly, this leaves a potential funding gap of up to £6 million. However, I would ask you all to remember this. Over the last two years, with the support of the fans and with sound financial management, we have built up a financial reserve of £3 million. There is nothing to stop us doing the same again, over the next two years, with your continued support.
What does this mean? Unashamedly, I am asking you to keep doing what you have been doing.
- We need season ticket holders to sign up again in their numbers.
- We need corporate members and sponsors to continue to back the club across the season.
- We need FOH pledgers to keep pledging.
- We need to continue to sell-out the stadium…and our hospitality suites…on match days.
- We need to make our new in-house retail operation a big success, by offering our supporters goods they want to buy.
In short, we need to continue to work together…the Club…the Foundation of Hearts…and the supporters…to deliver this project. By doing nothing more than has been done over the last two years, the club can once again build up £3 million of reserves.
While that will be a wonderful achievement, it would still leave a £3 million gap. So, what else are we planning to do?
We will shortly be announcing details of a debenture scheme – which we are confident will be a great success. We have also been asked by many fans to consider a number of other ideas in relation to the new stand development. More information will be provided on these schemes over the next few months.
The other major initiative revolves around the FOH/BIDCO agreement. According to that agreement, repayment to BIDCO should start on 1st June 2016. I have made an offer to the FOH Board that they can defer repaying the BIDCO loan for a period of up to two years, and that all donations made during that period, should continue to be paid to the club. This money would be allocated to the new main stand project. At current levels of contribution (£125,000 per month), this would generate £3 million.
At the end of the two-year period, or when £3 million has been donated, if earlier, FOH contributions would then revert to repaying the BIDCO loan.
What would this mean to FOH pledgers?
Assuming contributions continued at today’s levels, majority ownership would pass to FOH only eight months later than originally envisaged. However, they would be taking over a club with everything in place to ensure financial stability and to position the club for continued growth. It is worth noting that should the number of pledgers increase over this period, the original five-year plan could still be achieved.
To demonstrate that fans’ ownership still has my full support, I have also offered to transfer 20% shareholding to FOH when £1.5 million has been donated; and a further 15% on reaching the £3 million target. This is by way of a “thank you” and a demonstration of my faith in the FOH pledgers. The balance of 40.1% shareholding would be transferred on full repayment of the BIDCO loan, as per the original FOH/BIDCO agreement.
Finally, I have also offered to waive all interest payments due to BIDCO, during the period of up to two years when this deferral is in operation. This would effectively be my personal contribution of £300,000 to the main stand fund.
In short, I have every confidence that by simply continuing to work together as we have been doing, we can fund a magnificent main stand and position the club for continued success… all while continuing to invest in our academy and our squad.
4. Last but by no means least, I would like to mention the official opening of our museum, which is being planned for mid-June. This is a magnificent facility which I know you will enjoy. Be sure to fit in a visit over the summer!
Also…the stunning 1914 Memorial Trust bronze statue will be unveiled on June 5th, above the Memorial Garden at Tynecastle.
Once again, thank you all for your wonderful support over the season.