Catalist home page | Case studies | Our team

Public Procurement - case studies

Working with a Regional Development Agency

We have been working with a Regional Development Agency to identify appropriate structures for the delivery of infrastructure improvements associated with a proposed new community stadium.

We have advised on landlord and tenant issues, site re-development matters, planning, construction, joint ventures, taxation, state aid, public procurement and contract law.

The Development Agency initially believed that the best mechanism would be for all public sector funding to be controlled by establishing a new trust. However, from our discussions with them, it quickly became clear that they were uncomfortable in providing funding directly to the stadium developers and wished to find alternative mechanisms for the funding.

We have provided advice on trust and charity legislation to confirm that the stadium developers will not be eligible for charitable status as it is only available to amateur sport because of recent changes in legislation. We have also advised on state aid issues which would arise if the grant funding were to be provided to the stadium developers.

We have advised the Development Agency on an alternative mechanism for their public funding as the infrastructure works to be funded by them can be viewed independently from the stadium. This is because the works have wider benefits, in particular, to the educational bodies neighbouring the stadium. We have suggested that the Agency’s grant funding be directed through another interested party, namely the City Council as this would be a neat way for infrastructure works to be carried out separately from, but in tandem with, the stadium development. There are other advantages in following this route, namely that local authorities have well practised procurement regimes and the City Council will be able to recover any shortfall for VAT on their statutory functions. Therefore, our advice and guidance to the Agency has not only resulted in a clear route for the grant funding, it will prove to be significantly more cost effective than procurement through the stadium developers.

It has also been necessary to establish how the Development Agency can incorporate controls so that the stadium will be built on time and the community aspirations of the stadium met. We have advised them of a joint venture agreement structure whereby they, the City Council and the stadium developers will respectively agree to carry out their works according to a certain timetable. As far as the use of the stadium for community purpose is concerned, we have advised on a leasing and covenant structure which will ensure that these requirements are delivered.

We have also advised on the construction elements of the transaction, giving appropriate advice to protect the Development Agency against cost overruns.


Working with Bevan Brittan