The football club has tied Laing O’Rourke to a construction contract for its new 53,000 capacity stadium at Bramley-Moore Dock, a move that the club said “brings clarity” to the cost of the project in an “ever-fluctuating marketplace”.
The contractor has been on site since last summer under a pre-construction services agreement, and Laing O’Rourke and Everton have now inked a contract understood to be worth around half a billion pounds for the remainder of the project.
Under the new agreement, Laing O’Rourke will deliver a programme of works that includes the completion of any outstanding enabling works, the full construction of the stadium and public realm, and remedial works to the grade two-listed Hydraulic Tower, which will be brought back into public use.
“This is an important agreement at a crucial time for the club and the stadium project,” said Everton chief executive Denise Barrett-Baxendale.
“Our agreement with Laing O’Rourke follows on from last year’s pre-contract services and enabling works agreements and brings clarity on the overall costs of our new stadium.
“We are now able to lock in construction costs, while also benefiting from Laing O’ Rourke’s economies of scale in what is an ever-fluctuating marketplace.”
The construction of the stadium is being funded in part by Everton’s owner Fahad Moshiri, who is expected to contribute around £150m.
“Mr Moshiri and the board’s commitment to the project remains unwavering and we’ve been delighted by the progress so far,” Barrett-Baxendale added.
“Our new agreement signifies that we have the utmost confidence in Laing O’Rourke, which is using the very best digital engineering expertise and industry-leading knowledge of modern construction methods to bring our stadium vision to life.”
The remainder of the cost of the stadium will be funded through private borrowing, details of which are expected to be announced later in the year.
At a fixed cost of £500m, the future Everton stadium will be half the price of Tottenham Hotspur Stadium, the most recent new stadium to be constructed for a Premier League side. In 2014, it was estimated the ground for the Tottenham Hotspurs would cost £400m to build. This rose to £750m in 2017 and, by the time the project completed in 2019, it is estimated the cost had risen to £1bn, according to various media outlets.
Earlier this year it came to light that Everton had turned down a £30m offer of a loan from the Liverpool City Region Combined Authority for the project, opting to go down the private route instead.
Liverpool City Council had also considered providing funding for the project, although ultimately it did not agree on a loan arrangement.
The council has been criticised over how it pursued offering the possible loan, with commissioners noting that the council had not only incurred significant expenses in investigating the possibility of a loan but that it had done so without any formal council approval or budget provisional approval.
Commissioners called the potential loan “a failure of governance” in a report ahead of the council’s cabinet meeting on 22 April.
“The council failed to adequately manage costs, some of which are now irrecoverable,” the report reads. “The council failed to secure a cost indemnity to protect its position on fees and has been in negotiations with EFC for a number of years to reach a settlement, again without any council approvals in place.
Everton Football Club had provisionally agreed to cover the due diligence costs if the loan arrangement was not met, which ended up being the case. During the 22 April meeting, the council will vote to give the chief executive the power to agree the final settlement with the football club and for the deputy chief executive and director of finance and resources to write off any subsequent outstanding sums.
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Source: Place North West