Birmingham City Council to take control of NEC management company
The lump sum payment to the Chamber is not being disclosed by the council, but it is thought to be less than £500,000. With the Chamber facing its own cashflow difficulties and intent on replacing its offices in Edgbaston, the guarantee of significant annual income is likely to be too much to resist.
The deal ends more than 20 years of behind the scenes negotiations, which have resulted in the Chamber’s interest in the NEC gradually being bought out.
When the National Exhibition Centre was built in the 1970s the council and Chamber agreed to a 50-50 split of ownership and future profits.
A decision in the 1980s to combine the NEC, the ICC and the NIA under a joint operating company made it far more challenging for the group to deliver net annual profits and began a process whereby the Chamber agreed to offload shares in return for an annual payment regardless of profit.
The Chamber is expected to provide expert business advice to the NEC in return for the annual service agreement with the council.
The NEC Group chalked up operating profits of £36.5 million in 2008/09.
But after interest payments on loans were taken out, a surplus of £2.7 million was left.
A Chamber spokesman said: “The city council has always owned the assets of the NEC and that will not change.
“At the same time as these discussions are taking place, the Chamber is renegotiating renewal of its long-standing service agreement with the city under which the Chamber is paid to provide promotional and support services to the NEC.
“The Chamber has a long relationship with the NEC and its existence was largely due to the Chamber’s vision in the 1960s.”
