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A deal that could see Southend Council manage an ambitious new housing development on Roots Hall is to be explored by the council.
Senior council leaders agreed on Tuesday that investigations should begin into whether it would be financially viable to enter into a deal with developer Citizen Housing to become the leaseholder of the proposed development on the site of the Roots Hall stadium.
It is expected to come at a significant cost to the council in the short-term but will help to fund the construction of more than 500 new homes and lead to long-term benefits including allowing the council to retain all income earned through properties rented at the site.
It will also give a cash boost to the developer, which will help pay for the initial housing costs.
Council leader Ian Gilbert said: “We as council have been approached by the football club in order to be a development partner of the Roots Hall site and are proposing a model of finance called income strip.
“It is a relatively new model of financing that will see the council take a lease of the development and in turn gain a fixed income.”
A council officer explained that the cabinet was only agreeing that the deal should be explored in relation to whether it would be financially sustainable in the long-term so that they can be confident it is “financially sustainable”.
Councillor Anne Jones stressed that the deal should only go ahead if it is beneficial for Southend residents.
Details of how much the council will actually need to pay and where that money will come from remains unclear because the final housing plans have not been confirmed.
The plan to build homes on the site will only move forward if the football club successfully gains planning permission to build a new 21,000-seater stadium at Fossetts Farm.
Southend United boss Ron Martin said earlier this week that the cabinet’s decision on the Roots Hall deal would “determine the club’s future” and the meeting represented the culmination of discussions over the stadium move.
But Mr Gilbert said he was “surprised” to see the remarks and said they appeared “premature”.
Southend Council has said a decision on the Fossetts Farm stadium would be determined at a future development committee.