Sports stadia developments: your guide for avoiding construction delays

Introduction

Last year witnessed a spike in activity for stadium construction and redevelopment projects across the UK. The construction of the new and significantly enlarged White Hart Lane was well underway for Tottenham Hotspur FC in the first quarter of the year; MCC approved a 15-year masterplan to redevelop Lord’s Cricket Ground; and the ongoing redevelopment of Headingley (home to both Yorkshire County Cricket Club and Leeds Rhinos rugby league club) received a timely boost with the announcement of a £35m funding package.

Looking ahead, Surrey County Cricket Club remains committed to redeveloping the Kia Oval, making it the largest cricket stadium in the UK with a capacity of 40,000; and there are plans for the construction of new stadia by Bath Rugby and Everton Football Club.

These are just a few examples underlining that the enhancement of stadia is a key objective for many sports organisations, and understandably so. The construction of a new stadia or redevelopment of a current home can be vital income generators for sports clubs, facilitating sustainable economic growth and adding a valuable asset on the balance sheet, as well as providing a highly effective way of re-engaging with fans and the local community. For many sports clubs, though, the initial wave of optimism and excitement, from both fans and club management alike, can fade once the construction process is in full swing.

An intricate game

Construction projects are by their very nature complex and constructing or redeveloping stadia is no exception: from creating a vision for the project and the initial decision-making process, to the planning and feasibility stage, through to obtaining all necessary consents, securing suitable funding arrangements and procuring the designs. All this before the actual development works start. There are numerous players in the game and an even greater number of potential hurdles along the way to unveiling a completed stadium fit to host big ticket sporting events.

The level of complexity and range of technical experts required for stadia developments are perhaps unique. The amount of effort and time required during the pre-construction phase is seldom acknowledged (or appreciated) by outsiders, but often years pass before the contractor even sets foot on site, as Cornish Pirates fans will attest. Construction works have yet to commence at the £14.3m Stadium for Cornwall, the proposed multi-purpose stadium in Threemilestone, that is also set to be occupied by Truro City FC, due to funding issues.

However, it is during this construction phase where delays frequently materialise and, with the eyes of the outside world beginning to focus on the outcome, plans for champagne corks popping at a grand opening ceremony can seem remote.

Growing injury list

It is a consequence of the complexity of construction projects that delays are commonplace, and the larger the project means that the likelihood of late delivery invariably increases.

It is not a difficult exercise to find (current) high-profile cases of delays in sports stadia. Tottenham Hotspur FC had originally hoped to be in their new 62,000-seater home at the start of the 2018/2019 Premier League season but, at the date of writing, there is no fixed date for their first competitive fixture at the new stadium following alleged issues with critical safety systems. Elsewhere in London, it was initially planned that Brentford Community Stadium – due to be a home for both Brentford Football Club and London Irish RFC – would be ready for occupation by December 2019, but the move-in date for the new 17,250-seater stadium is now scheduled for the start of the 2020/21 season.

Equally, the recent history of new stadia projects reveals further examples of the difficulty contractors face with sticking to tight schedules, with Wembley Stadium – beset by years of delays before finally opening in 2007 – being the most notable instance.

The legal basics

Delays can be caused by many factors including inclement weather, variations to the scope of the works, impediment from the developer, poor or difficult to construct design solutions, inadequate performance and management of the project from the contractor, lack of availability of labour and materials, and adverse site conditions. This list is by no means exhaustive.

Some elements of construction works can be delayed without affecting the overall programme length, in contrast to critical delays which will impact on the completion date. A properly drafted building contract will typically allocate the risk of delay between the employer and the contractor depending on the cause (or causes) of the delay. It is generally the case for most contracts that, if the delay is caused by the employer, the contractor will be entitled to apply for an extension of time to complete the works and may also be entitled to claim additional costs. If the delay is caused by the contractor, then the employer is often permitted to claim predetermined sums (liquidated damages) from the contractor, though works eventually extend beyond the date for completion fixed in the contract.

There are also those delays caused by “neutral” events (being neither the fault of the contractor or the developer). Normally these entitle the contractor to an extension of time, but ordinarily they do not provide for the contractor to claim additional costs from the employer.

Avoiding own goals

Delays are part and parcel of construction projects. Sports clubs looking to develop stadia can help themselves, however, with careful planning at the outset. A feasible design established at an early stage is vital, as are ensuring all statutory consents are in place in good time and the retention of an experienced project manager to implement a rigorous project plan.

During the construction phase, adopting a collaborative relationship with the contractor and avoiding or minimising changes to the design or specification are key, and, if delays are unavoidable, the ability to adopt flexible and creative measures to minimise these delays is a must.

Sports stadia developments, whilst undeniably complex, have every chance of being delivered on time if managed correctly. One of the most iconic stadia in recent years, the Velodrome, which hosted the Olympic and Paralympic indoor track cycling events at London 2012, was completed ahead of schedule and was the first venue to be completed on the Olympic Park. “On time, on budget, the best in the world” (The Guardian) – the dream held by every club building a new home.

If you require further information about anything covered in this briefing note, please contact Clive Lovatt or your usual contact at the firm on +44 (0)20 3375 7000.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, February 2019