Stamford Bridge is the spiritual home of Chelsea football club and its billionaire owner Roman Abramovich. While Abramovich can flash his millions of pounds on the football field it is not common knowledge but the Chelsea owner does not actually own the leasehold on the club’s football ground. This leasehold is held by a fan owned group called Chelsea Pitch Owners (CPO) and it looks as though there is a very interesting battle ahead as the owners of Chelsea football club look to redevelop the stadium.
Is CPO pro-Chelsea?
While there is no doubt that Roman Abramovich would rather own the leasehold to Chelsea’s football ground that is in the hands of fan-based group CPO. While the group was painted as a stumbling block to the development of Stamford Bridge back in 2011, when Abramovich tried an aggressive takeover, in many ways they are the custodians of Chelsea’s spiritual home. While there is no doubt that Abramovich has poured millions upon millions of pounds into Chelsea football club no fan wants to see the club move away from Stamford Bridge. So, what is the next challenge ahead?
This month Chelsea football club received clearance from Hammersmith and Fulham Council with regards to a £500 million plus redevelopment project. The football ground will effectively be rebuilt in the design of a 60,000 capacity Gothic modernist Cathedral which looks absolutely stunning. These plans have been rumoured for many years but clearance from the council effectively takes the club to the next stage. While Roman Abramovich could himself fund the £500 million plus project there will be external finance and perhaps investment partners joining the development. However, the fact that Abramovich does not own the leasehold to Stamford Bridge could cause some issues.
Extension of the lease
While Abramovich would love to own the leasehold for Stamford Bridge this is not going to happen with CPO adamant they will not sell. So, a compromise seems to have been reached with the current lease, believed to have 180 years to run, set to be increased to a 999 year lease. In common law this is basically a permanent agreement to lease the land to a third party. When you bear in mind the value of this land, prime property in Chelsea, the shareholders of CPO must be serious fans of the club!
The next step is a section 106 agreement to be signed off by the leasehold company which formulates the benefits of the development to the local community and should allow the project to begin. Chelsea football club will at some point, probably around 2019, be forced to play some of their home games away from Stamford Bridge while the development continues.
This has become something of a political hot potato with the Lord Mayor of London involved, fans eager to protect their spiritual home and the leaseholders fighting the billions of pounds behind Roman Abramovich. It will be interesting to see how this development progresses because there will be no doubt be twists and turns along the way. In an ideal world Roman Abramovich would prefer to own the leasehold but that is not an option and unlikely to be for the foreseeable future. Therefore, the extended lease should be enough to allow Chelsea football club to attract investors and financiers for the project.