Agenda item

To approve proposed wording for clarification of the terms of the debt from Alexandra Palace and Park Charitable Trust to Haringey Council.

Received the report proposing wording to clarify the terms of the debt from the Charitable Trust to Haringey Council, pages 65-66 of the agenda pack, introduced by Duncan Wilson, Chief Executive, Alexandra Palace. 

Board members discussed the issue at length and the following was noted:

i.          It was necessary to clarify the terms of the debt for the purpose of encouraging future investors in Alexandra Palace and also to satisfy the concerns of the Heritage Lottery Fund (HLF) Committee.  The debt would be removed from the Trust’s balance sheet and would make investment more attractive to potential partners.

ii.         Board members raised concerns that the wording would mean that the Trust accepted the debt permanently and urged the Trust to push for the debt to be written-off.  Mr Wilson agreed that writing-off the debt was the preferred option and maintained that the proposed wording would not reduce the potential for the debt to be written-off in the future but would protect the Trust from the debt being unilaterally recovered.

iii.        Mr Wilson would draft a letter to the Council stating that the Board still expected the debt to be written-off and this letter would be public.  The letter would emphasise the commercial objectives of APTL (Alexandra Palace Trading Ltd).

Action: Chief Executive

iv.        Robert Kidby, Advisory Board Member, expressed agreement with the wording and advised the Board that it would be illogical to invite market investment when the Council’s books stated it owed such a large sum.  Mr Kidby also highlighted the risk of the Council attempting to recover the fund if the wording was not agreed.  He said it was important to include in the definition of “obligations” contractural as well as statutory obligations

v.         The Council remained the freeholder of and had a statutory duty towards Alexandra Palace and Park.

vi.        If approved the agreement would be put in place by end March 2014 and may require annual agreement.   

Resolved that

i.          The wording set out below be approved as the basis for further discussion and agreement with the Council, including the word “arbiter” being replaced with “arbitrator”:

The Trustees of the APPCT (“the Charity”) acknowledge that as at 31^st March 2014 the total amount advanced by the London Borough of Haringey (“Haringey”) and its predecessors to the Charity and not repaid by the charity was stated in the Trust’s accounts at £48.747m on a conservative basis.

Haringey and the Charity have agreed that this amount will not be repayable in whole or in part by the Charity unless and until full financial provision has been made for the statutory and contractual obligations of the Charity for the foreseeable future.  Any assessment of these obligations must be to the satisfaction of both the Charity and Haringey, both parties acting reasonably, before any such repayment is initiated.  Should the parties be unable to reach an agreement, the issue to be settled by an independent arbitrator, answerable to both the Council and the Trust.

ii.         The Chief Executive write a letter to the Council stating that the Board still expected the debt to be written-off in the future and highlighting the commercial objectives of Alexandra Palace and Park Trading Ltd.