The Council of the Western Province Rugby Football Union (WPRFU) has voted in favour of a proposed agreement regarding the development of its historic Newlands home, a move that intends to accelerate its switch to Cape Town Stadium.
Newlands has a current capacity of around 52,000 and opened in 1888, staging its first official rugby match in 1890. It currently serves as the home of the Stormers Super Rugby franchise and domestic team Western Province, along with being a regular venue for South Africa games.
However, the WPRFU in November said it would seek to move to Cape Town Stadium in 2021, a decision that placed the future of Newlands Stadium in doubt. The loan agreement approved by an “overwhelming majority” yesterday (Tuesday), will enable the WPRFU to pay off its debt to investment holding company Remgro and Investec Bank, subject to final ratification at a WPRFU meeting on July 8.
The WPRFU Council also approved a proposal that will see the Union and Flyt Property Group incorporate a new company called Newlands DevCo. This company will be owned equally by both parties with the objective of developing the Newlands property into a mixed-use development consisting of residential and office property.
Importantly, the WPRFU said it will have a 50% share in all economic benefits derived from the future development of the site. Additionally, the WPRFU Council also approved a proposal that another new company be incorporated between the WPRFU and Flyt, called Brookside DevCo.
This new company will purchase the Union’s Brookside property and its purpose will be to develop this site as a mixed-use development. The deal will give the WPRFU access to an estimated R40m (£1.88m/€2.08m/$2.33m) in cash, plus 50% of development profits down the line.
South African broadcaster SuperSport said the agreements will allow the Union to borrow what will effectively amount to R144m in order to pay off the R112m they currently owe Investec and Remgro. The Union is made up of around 100 clubs and it is said that the bigger ones were against the deal as it effectively places the cash-strapped body further into debt while reportedly putting all of its assets up as security.
The money owed to Investec is what was paid to the Union under the deal finalised last year for the purchase of Newlands. In a statement, WPRFU president Zelt Marais said: “This agreement will allow the Union to unlock the value in its properties, so it can invest in the long-term development of clubs and players in the province. This bodes well for the sustainability of Western Province rugby.
“We look forward to working with our development partners, Flyt Property Group. Flyt has an excellent track record in the design, development and management of residential, hospitality, industrial and commercial projects. It has a strong balance sheet, with projects being financed by shareholders’ own capital and it is not reliant on bank funding.
“This is the beginning of an exciting new era for rugby in the Western Cape. Rugby fans will be soon be able to enjoy world class facilities including a better viewing experience, top notch safety and security measures and modern corporate hospitality suites at the Cape Town Stadium.
“Of course, DHL Newlands will always have its place in the history of the sport and we will certainly pay tribute to our heritage at our new home in the heart of Cape Town.”
The City of Cape Town’s Council in November approved a binding heads of agreement between the city, Cape Town Stadium and Western Province for the team to make the venue its home from February 1, 2021. The deal will potentially span the next 99 years.
A “mutually beneficial” revenue share model has been agreed upon that grants Western Province preferential access to play all of its matches at Cape Town Stadium. Under the agreement, the city will be responsible for repairs, maintenance and operational costs at the stadium, which will retain its multi-purpose status and continue staging other sports and events.
As part of the deal, additional suites will be constructed at Cape Town Stadium, which has a capacity of 55,000 and was built for the 2010 FIFA World Cup in South Africa.
Image: Stormers
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