Arsenal prepare to take £357m stadium gamble

"Today is an historic day in the life of Arsenal Football Club," the chairman, Peter Hill-Wood, said with understandable exuberance yesterday as he announced that a consortium of banks had finally been persuaded to lend the astonishing £260m needed to complete the new 60,000-seat stadium at Ashburton Grove. But it was another comment from the urbane Hill-Wood that stuck in the mind: "The gamble we are taking is that Arsène [Wenger] will continue to work the miracles he has been for six or seven years."

Despite the convincing and constant protestations from the Arsenal directors, the £357m project is indeed a risk. The club is taking on more debt ­ £285m at its height ­ than any other has done before. It is managing one of the country's biggest urban regeneration schemes ­ in London, the hardest place to build ­ and it is doing it all at a time when football's finances are under considerable scrutiny.

It has taken four and a half years to "bring the dream to reality", according to the director Danny Fiszman, with 3,000 legal documents signed and, incredibly, the money agreed despite Arsenal not having what is termed "vacant possession". That is unprecedented. The final compulsory purchase order, the club said, will be completed next month. "I can assure you that everyone I have spoken to has said it's the most complicated scheme they have been involved in," Hill-Wood said.

An agreement has been signed with Sir Robert McAlpine at a "£220m fixed price" to build the stadium and a new waste recycling centre. That cost, Arsenal insist, cannot now rise. "It's just about construction now," Fiszman said. Furthermore, 2,000 jobs will be created and 2,000 new homes built ­ all part of the stipulations put on the club by the local authorities.

The existing Highbury will be converted into housing ­ the East Stand is listed ­ and renamed Highbury Square. The name of the new stadium is also under discussion. It will not be known as Ashburton Grove and may be renamed New Highbury. Arsenal are also "open" to the idea of selling naming rights, as Bolton did with the Reebok Stadium, if the price is right.

Arsenal insist the repayments of the loans ­ set over 14 years ­ are not linked to the club's continued success in the Champions' League. Or on the field at all ­ although that is hard to believe. They are confident that with 34,000 people on the waiting lists for season tickets, it will fill easily and have committed to making 10,000 tickets available to local residents. Eighty per cent of the fans will be expected to arrive by public transport and six "non-football" events a year will be allowed.

"The risk of filling the stadium is being taken by the banks," the managing director, Keith Edelman, insisted. The club have also created a company, Ashburton Holdings Limited, which "owns the stadium". If things go wrong, they claim, Arsenal FC will be ring-fenced. Edelman added: "It's improper for football clubs to take the debt to run their businesses. We are taking the debt to build a new fixed asset, highly revenue-generative, and if you are taking a debt to do that then it's perfectly OK." It would be wrong, he said, to use the money to buy players or pay wages, as others have done.

Arsenal also revealed they had received approaches from companies to build a stadium for them but insisted the long-term future of the club will be healthier if they are in control. And they do not need to share, they claim. Edelman said there would be "more than enough" money to pay off the loans. The rest of the costs will come from Nike, Granada and the sale of land. Edelman said that Wenger would be handed a substantially improved transfer fund, admitting that the manager had been limited in what he could do over the past five years. Now they insist he can assemble a dream team. That is, of course, contingent on Ashburton Grove still not turning into a nightmare.