City have to win another Lane battle (From Worcester News)

City have to win another Lane battle

7:30am Monday 8th March 2010

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By Steve Carley »

WORCESTER City have hit another stumbling block in their bid to sell St George’s Lane and safeguard the club’s future.

City want to sell their home of more than 100 years so they can pay off their £1.5 million debt to the Royal Bank of Scotland and move to a new stadium.

The Blue Square South club are hoping to get £3.5m from Careys New Homes subject to planning permission, which has yet to be granted as the Wembley company tweak their designs.

However, it has emerged that St Modwen, the developer looking to build a stadium for City at Nun-nery Way, have a clause in their contract with the club currently preventing the sale of the Lane Known as a legal charge, it gives the Birmingham firm a financial security should the football club not be able to fulfil their side of the bargain.

Because City did the deal for a Football League-standard ground at Nunnery Way a year before they agreed to sell the Lane to Careys, St Modwen want an assurance the club can afford to move.

Consequently, the property developer negotiated a clause to recoup any cash spent on the project should City go out of business. In that scenario, RBS would get first priority on the sale of assets — chiefly the Lane — followed by St Modwen.

Until St Modwen are satisfied City will have the funds to press ahead, they will not release the charge.

That stops the sale of the Lane because Careys will not exchange contracts with the club until the situation is resolved.

According to Worcester chairman Anthony Hampson, the contract also gives St Modwen until 2017 to decide on their plans for Nunnery Way.

City director Andrew Watson said: “They were protecting their investment in Nunnery Way by taking a charge on the St George’s Lane site. The Careys contract has been renegotiated to allow a two-stage payment to pay off the bank debt and let WCFC remain on a lease at the Lane for two seasons.

“But since the second stage payment does not happen until WCFC vacate the Lane at the end of the lease, there is no money to pay anything towards the cost of the new ground and St Modwen lose the security of their charge over the land because the club will no longer be the owner.”

Hampson added: “Without St Modwen’s agreement, the sale to Careys cannot go forward.”

John Dodds, Midlands regional director for St Modwen, said: “We are continuing to work closely with Worcester City Football Club and are in ongoing discussions regarding the relocation to Nunnery Way.”