Guarantees are planned to secure the required investment in the Arena

3.14  A key objective of the sale process was to secure the future of the Dome. The Government would not want to see the development of the rest of the Peninsula proceeding without the required investment in the Dome. Conversely, the Dome Arena is not scheduled to be completed until June 2007, at the latest, and it would not be sensible to halt the start of development on the rest of the Peninsula until then. So it is desirable that both these elements of the deal should proceed in parallel.

3.15  Anschutz is obligated to develop the Arena under the terms of the various contracts which are backed by an Anschutz Corporation Guarantee. Works have to start by 17 June 2005 and be completed in two years. In the event that Anschutz fails to start it would forfeit its Lease of the Arena site in the Dome and Meridian Delta would have the right to step in to assume the obligations of Anschutz. If Anschutz start but do not complete the Arena, Meridian Delta Limited and English Partnerships have step in rights and, if these rights are not exercised there are rights of termination of the Lease of the Arena and all of Anschutz's other rights in the Peninsula. The contract requires Anschutz Entertainment Group to provide a performance bond or equivalent assurance guaranteeing completion of the Arena, which can be called on if the work is not completed. This assurance is to be in place prior to the work starting, which in turn is required within twelve months of the Unconditional Date i.e. by 17th June 2005. At the time of writing the terms of the assurance are still being negotiated. When agreed it will afford additional protection to the guarantee from the Anschutz Corporation which already exists, and to the contractual and commercial pressures that will be on Anschutz because of other terms in the Legal Agreement.

3.16  English Partnerships take assurance from other sources that the required investment in the Arena will be secured before development land is released to Meridian Delta Ltd. Aside from the legal position, Anschutz have already made an investment in planning and preparing for the Arena business, which indicates their commitment to proceed as soon as possible. The Group is disposing of its existing London Arena and is gearing up to market the new facilities at the Dome.