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					                                                         REPORT TO CABINET
                                                         16 March 2004



TITLE OF REPORT: Gateshead International Stadium Development

REPORT OF:          Leslie Elton, Chief Executive
                    Maggie Atkinson, Group Director, Learning and Culture
                    Derek Coates, Strategic Director, Finance and ICT

                               EXECUTIVE SUMMARY

The report informs Cabinet of the current status of the proposed Gateshead
International Stadium development and asks Cabinet to agree the submission of
funding bids, extend the appointment of design consultants and to place an advert
in the European Journal.


Policy Context

1.      The proposals in this report support Towards 2010 and in particular the key
        outcomes for Leisure & Culture “Local people who participate in a rich
        array of cultural and leisure opportunities, including sport”. The proposed
        project will also support community involvement via Lifelong Learning thus
        enabling “Local people who learn throughout their lives and have life skills
        to realise their full potential as individuals and active”

Consultation

2.      Consultation has taken place with Gateshead College, Sport England, Tyne
        and Wear Partnership, Learning and Skills Partnership and Government
        Office North East.

Implications

3.      The Strategic Director Finance and ICT confirms that initial estimates of
        cost for the project are £13.5m. this would be approximately £9.8m for the
        Council development and £3.7m for the college facilities.

4.      Bids will be submitted to a number of organisations to raise the required
        funding for this project. A key element of the funding package would be a
        bid to Sport England for a potential £2.5m funding. This funding would be
        at risk if the project were not operational by December 31 2005.

5.      In order to achieve this date, the Council would need to fund the
        continuation of the design process. This would be for a maximum of 3
        months from April 2004 and the Strategic Director, Finance and ICT
        confirms that the estimated cost of £100 000 could be met from approved




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        SRB funding. These would be abortive costs if the funding applications were
        not successful.

6.      Should funding applications for the project be successful and the project be
        agreed by Cabinet, there are increased revenue implications for the Council
        which are currently estimated at up to £300,000. A full business plan will
        be prepared to finalise the additional cost and will be reported to Cabinet.

Recommendations

7.      The Cabinet is asked:

        (i)     For approval to submit bids for Single Programme, Sport England,
                ERDF and Football Foundation funding.
        (ii)    For approval to extend the appointment of the design consultants,
                FaulknerBrowns, to the next stage of project development
        (iii)   To note that an OJEU (Official Journal of the European Union) notice
                will be advertised for the project.

        For the following reason :

        To enable the project planning and design to proceed on a timetable which
        will meet the project completion date imposed by Sport England and
        enable funding applications to be submitted in line with the requirements
        of funding bodies.




CONTACT: David Bunce extension 2051                            PLAN REF: SE3/04




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                                                                       APPENDIX 1
Background

1.     Following Sports England’s rejection of the original project for Lottery
       funding in July 2003 it was agreed that the development should still be
       pursued with an amended brief. The preferred option was to develop the           site
       as a Regional Performance Centre incorporating English Institute of
       Sport (EIS) with indoor athletics facilities, improved community facilities
       and to facilitate a permanent presence by Gateshead College.

2.     This option has now been investigated further and a specification has been
       prepared reflecting the requirements of the Council, Gateshead College and
       Regional Performance Centre. This is described in Appendix 2.

3.     This development will position the International Stadium as a strategic hub
       for community sporting and healthy living activity providing a focal point for
       sport and physical activity development work particularly in priority areas.
       The International Stadium’s standing as a sporting venue will be enhanced
       through the development of an improved infrastructure which will improve the
       venue’s ability to attract major events. The integrated nature of the project
       encompassing club, community, schools, Gateshead College and English
       Institute of Sport use provides the platform for optimum use of the site while
       creating the prospect for mutual benefits to be gained through the respective
       groups working together.

4.     A firm of architects, FaulknerBrowns, were appointed to undertake a
       feasibility study which will provide a design to meet the specifications and the
       ground conditions of the site, a programme for delivering the facility and a
       cost estimate for the design. This feasibility study, which will be used to
       support funding bids, will be complete by mid March 2004 and the cost is
       funded by a £100,000 grant from Single Programme. As part of the feasibility
       study FaulknerBrowns will report on site masterplanning issues and consider
       capacity for potential future commercial developments.

       The study will also consider the Stadium’s current spectator facilities
       particularly issues of toilet provision, lack of cover and protection from the
       elements and inadequate facilities for people with disabilities although the
       current funding arrangements are unable to finance any of these
       developments.




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Funding Update

5.     Initial estimates of cost from the feasibility study based on the outline
       specification are as follows:

                                      Gateshead         College           Total
                                      £m                £m                £m
        Building Costs                5.2               2.8               8.0
        External Works                1.4               -                 1.4
        Fixtures & Fittings           0.9               -                 0.9
        Fees, Tech costs &            1.0               0.4               1.4
        statutory fees
        Project Contingency           1.3               0.5               1.8

        TOTAL                         9.8               3.7               13.5

6.     These costs are based upon estimates from FaulknerBrowns.

7.     The following funding will be targeted for this project:
         Sport England
         Single Programme (and One North East Culture10)
         ERDF
         Gateshead College
         Football Foundation
         SRB

       SRB is the only secured funding at this point.

       Sport England - Active England Process
       Regional Sport England has £10.2m funding to allocate to projects in the
       region. Bids must be submitted by 31 March 2004, with an expected ‘outline’
       approval to stage 1 by mid May. This ring fences the funding to the project
       but does not give approval to spend. This would require a further submission
       including a Capital Project Delivery Plan and Operational Business Plan with
       final grant approval given in September 2004.

       A key condition of funding is that the sports elements of the facility must be
       open and operational by 31 December 2005.

       Single Programme
       The original lottery project had an indicative allocation of £2.95m of Single
       Programme funding. As the timescale for the project has changed, a new
       application will be submitted for an increased level of funding. A bid will be
       submitted in early April 2004 with confirmation of funding expected by
       September 2004. Confirmation is subject to inclusion of the project within the
       05/06 Single Programme Delivery Plan and as the total of the anticipated
       Single Programme resource exceeds £5m the application will be subject to
       approval from ONE NorthEast board.




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       ERDF
       Consultants have been appointed to appraise the project for inclusion in the
       Tyne Corridor package. Currently there is a break in the ERDF funding
       process to enable a review of finance to take place. This is likely to result in
       significant delays in dealing with applications and almost certainly to reduce
       the amount of funding available under Objective 3.1. If a bid to ERDF is made
       the Single Programme approval timing may be delayed as the two bids would
       be twin tracked through the appraisal process.

       Gateshead College
       Gateshead College moved into modular accommodation on the Stadium site
       in September 2003 with the support of Single Programme funding. The Sport
       & Leisure courses and development of Sports Academies have proved
       popular with students and the College has expanded its requirements from the
       new facility.

       The College is responsible for funding this development and it is probable that
       the College development will proceed as a second phase to enable Learning
       and Skills Council (LSC) funding applications to be processed.

       The College do not require the facility to be ready until September 2006 at the
       earliest in order to meet LSC funding timetable and to open for the academic
       year. The deadline imposed by Sport England does not relate to the College
       facilities.

       Football Foundation
       Football Foundation may fund up to 50% of the cost of new football facilities.
       It is proposed to submit a bid for a contribution to one 3 rd generation artificial
       pitch .

       SRB
       SRB funding has already been used to resurface the athletics track and
       provide a new artificial turf pitch at the Stadium. The remaining funding of
       £220k from the SRB allocation is being held for the future development.


Financial Implications for the proposed Gateshead Council scheme

       Sport England Funding

8.     An important funding component for this project is the support from Sport
       England, however at a national level Sport England have imposed an
       extremely tight timescale. The operational date of 31 December 2005 is
       fixed nationally and will result in a 100% clawback of grant if the funded
       sporting elements of the facility are not operational.

9.     The submitted bid to Sport England will request £2.5m of capital funding,
       however any final approved allocation will depend upon the quality of the
       Council’s bid and the quality of other regional schemes. This funding would
       be at risk if the December 31st 2005 date were not met.




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10.    The Regional dimension of the development is hinged on the Indoor Athletic
       Centre and the Regional Performance Centre. These components require
       external funding contributions and funders would expect a contribution from
       Sport England.

11.    The feasibility study will produce a programme for the delivery of the
       project and this has already highlighted that delivery by 31 December 2005
       is achievable but will be challenging with little scope for delays to the
       programme. There is a real risk that the imposed date will not be met. The
       delivery date imposed by Sport England does not require the College
       facilities to be completed in this timescale, and there is greater chance of
       meeting the deadline if the project is developed in two phases.

12.    To be able to meet the December 31 2005 date, the Council would need to
       fund the continuation of the design process, submit bids to the prospective
       funders and begin the tendering process.

13.    There would be abortive costs if the funding applications were not
       successful.

       Revenue Costs

14.    An Operational Business Plan would have to be produced in order to secure
       Sport England funding. This will identify the additional cost to the Council of
       the new facility, taking into account the contributions to overheads from the
       College and English Institute of Sport. At this stage, the best estimate of the
       additional costs is approximately £300k assuming that EIS and
       Gateshead College facilities are funded by those respective organisations.

15.    The Leisure Best Value review is investigating alternative procurement
       options. Potential revenue savings for the Stadium operation that may
       accrue as a result of a different procurement model would be considered as
       part of this process.

       Second Phase Development - Gateshead College

16.    The College is a very keen partner in taking forward this development and we
       see this element as important to the overall revitalisation of the site.
       The College has received an in principal approval to a Learning & Skills
       Council bid to redevelop their properties. The College has a package of
       funding available to take forward the main redevelopment scheme but
       would need to source match funding for the Stadium scheme. This could be
       from Single Programme and ERDF.

17.    At this stage the College does not have funding secured for the Stadium
       development and a design and construction programme will need to be
       agreed to meet their funding and completion deadlines. These will be
       different from Gateshead’s deadlines. In addition there is a need to agree
       terms for occupation of the site and a service level agreement for sharing of
       costs and use of Council facilities.




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Consultation

18.    Consultation has taken place with Gateshead College, Sport England,
       Learning and Skill Partnership, Tyne and Wear Partnership and Government
       Office North East.

Alternative Options

19.    The alternative is not to proceed with the project development and funding
       applications which would result in the proposed site on the remediated land
       being left in its current derelict state.

Implications of Recommended Option

20.    Equal Opportunities Implications - There are no direct implications arising
       from this report

21.    Crime and Disorder Implications - There are no direct implications arising
       from this report

22.    Environmental Implications - The proposed project would result in a more
       attractive environment as a result of the development of a remediated site.

23.    Human Rights Implications - There may be interference or disturbance to
       residents while construction work is carried out. However such interference
       will be kept to a minimum and the project will result in benefits to residents.

24.    Ward Implications - Bede




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APPENDIX 2
Background Information

   Indoor Athletics Centre to meet the requirements of the UK Athletics Facilities
    Strategy and regional performance needs. The Centre would incorporate a 6
    lane 82m sprint straight along with throws and jumps areas. This Centre would
    provide the training environment for world class athletes but would also provide
    the focal point for regional athletics development as proposed in the sports
    development plan. Importantly, the Centre would be used by Gateshead clubs
    and school children. The Centre would be used by athletes in the generic sense
    under the auspices of the Regional Performance Centre and EIS.

    A key part of the project will be dual use function of the athletics facility with
    regard to the EIS support work with athletes from sports other than athletics. For
    example, the athletics sprint straight will be used for speed development for a
    number of sports and for fitness testing eg Rugby Union Academy testing. The
    throws and jumps areas will be utilised for strength and conditioning work. The
    placement of force platforms and digital cameras at various points in the athletics
    area will allow for performance analysis work to occur across a number of sports.
    With EIS laboratories situated adjacent to the track it will be possible for the
    analysis of training, conducted in the athletics areas, to be easily undertaken. The
    design is crucial to maximise the functionality of the space.

   Regional Performance Centre – The regional hub facility incorporating EIS
    would incorporate spaces for sports science, sports medicine, consulting rooms,
    offices, meeting/lecture rooms and specialist conditioning. The hub site will
    provide an identity for EIS in the region which performers will soon learn to
    recognise as a ‘one stop shop’ where services, training and advice can be rapidly
    obtained. It will also be the co-ordinating site for support work undertaken at
    other sites in the regional network.

   Fitness Facility – to meet the needs of the community, world class athletes,
    regional development squads, clubs and college users.

   Third Generation Artificial Turf Pitches (1 or 2) – This is the latest artificial turf
    technology providing a long artificial grass pile on a rubber crumb base to provide
    training, match and recreational facilities to meet football and rugby development,
    educational, club and community needs.

   Grass Pitches (1 or 2) – to provide a high quality pitch for team sports with
    ancillary space to support track and field activity.

   Floodlit Outdoor Athletics Throws Area to provide a year round full size
    athletics throws facility for training and competition purposes.

In addition the project will be developed to include

   Gateshead College Accommodation – to provide teaching/office
    accommodation to service its sports related training provision and space for




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   sport-related business development and support. This provision will be funded
   separately by Gateshead College.




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