David Conn: Arsenal go on the attack over stadium plans

Local campaigners and businesses join forces to campaign against Premiership club's ambitious scheme to relocate at nearby industrial site
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A hint for anybody studying Arsenal's proposals to spend up to £1bn on their new stadium scheme: banish mentally any prior knowledge of the fate of London's other grand leisure projects: the Dome, Picketts Lock, Wembley. Read the brochure, see the plans – for a gleaming 60,000-seat stadium, 2,300 new homes, four health centres, plentiful new "work spaces" and improved public transport – and you can be convinced of the club's ability to keep up with the Manchester Uniteds while staying local. "Let Arsenal Support Islington" goes the club's campaign logo.

Serious local opposition persists, however, marshalled by a well-organised group of 16 local organisations, the Islington Stadium Communities Alliance. They argue the plans are over-ambitious, uncosted and will cost real jobs because some 83 businesses on the Ashburton Grove industrial site will have to move to make way for the new stadium. ISCA says the whole area will be transformed and dominated by a single multi-million pound company – Arsenal.

It helps, too, to remember some history. In 1913, Arsenal's rascal chairman, Henry Norris, outraged fans and Highbury residents' groups when he moved the club across London from Plumstead. Then, according to Simon Inglis's book Football Grounds of Britain (Collins Willow, 1996), Arsenal faced no costly planning inquiries, but stitched up a deal for the land, then owned by the Church, with the Archbishop of Canterbury himself – paying £20,000 and promising not to play on Sundays, Good Friday or Christmas Day. The move has been a vital foundation for the club's glittering record since.

Arsenal's modern campaign to escape the 35,000-seat Highbury, which has become financially suffocating, began in 1997. Then they announced they wanted to expand to 48,000 by rebuilding the West Stand and South Bank and it would be necessary to buy and demolish 25 neighbouring homes. Given the amenities it is now promising in order to win planning permission, it is extraordinary to remember how brutal the first plan was. Yet still the residents who opposed it were characterised as anti-football "nimbys". They deny that, but many say it educated them in football's, and Arsenal's, new commercial realities and unpredictability.

A year later Arsenal decided 48,000 would not anyway be enough, and put in a bid for Wembley Stadium. This was ruled out by the Football Association, concerned that having a club as an "anchor tenant" in the new national stadium might prejudice the bid for the 2006 World Cup – remember that? Unlike Manchester's Commonwealth Games Stadium, which will be handed to Manchester City when the games are over, Wembley's £120m Lottery grant stipulates that there can be no anchor tenant.

Arsenal then had the same problem as that which blighted the search for a national stadium site and caused it to end up at Wembley: inner London has no spare sites. So they fell back on their own neighbourhood and are now having to be enthusiastic about Ashburton Grove, a no-frills 27-acre site housing light and heavy industrial companies employing 1,100 people, and a council-owned waste station. The project is staggeringly complicated: just to relocate the waste station will, said their director Ken Friar, cost Arsenal £40m – more than it cost Sunderland to build their 48,000-seat Stadium of Light.

Arsenal officials admit they might never have embarked on the scheme had they realised what the modern planning system can extract in exchange for permissions. They have spent around £10m on architects and consultants, and delivered the planning application in November last year, which they have since revised three times. The result is the application that will sit before Islington Council on Monday night: all 83 Ashburton Grove businesses are to be moved, 2,300 new homes are to be built, along with office and warehousing spaces and the health centres, and £8m spent on Holloway Road tube station and other public transport improvements. The council's officers, citing the benefits of "local identity, heritage and civic pride" of keeping Arsenal in Islington, have recommended that councillors grant it.

"We have to compete with football's big players," explained Friar, who has worked at Arsenal an astonishing 52 years. "Manchester United have a 67,000 capacity and we have 35,000, so we're competing on an uneven playing field. We've got 20,000 people on a season-ticket waiting list so the demand is there. We've tried to do everything to meet local concerns." He did not say how much the scheme will cost, although the stadium alone will cost £300m. An Arsenal estate agent, Anthony Spencer, has put the cost overall at between £700m and £1bn. Nor would Friar say how Arsenal hope to fund it, just that the City's disaffection with football means that a flotation of the club, still substantially owned by the multi-millionaire directors David Dein and Danny Fiszman, is not likely. Arsenal received £77m in 1999 from Granada for options on 9.9 per cent of the shares; otherwise the club will have to borrow.

"It will be a mix which will inevitably involve some debt," said Friar. The campaigners are furious, in part, that Arsenal stand to profit by selling lucratively for housing the industrial land they will buy more cheaply by forcing businesses out. Arsenal's agents have been offering to buy out or move the businesses, threatening that if the companies refuse they will apply for compulsory purchase orders. Most are holding out.

"I'm absolutely demoralised," said David Harvey, managing director of Lawsons, a builders merchants which employs 39 people. "We've been here since the 1920s. I wouldn't mind as much if it was to make way for the stadium itself, but I really object to moving so they can build houses."

ISCA opposes the scheme in detail – the 1,800 jobs Arsenal claims it will create are in fact only the maximum number of people who can be fitted into the new workspaces, not actual jobs. They also contest the principle that Arsenal benefits the borough; a 1997 study by the Highbury Community Association found that more local traders lost business on matchdays than the few, mainly pubs and fast-food shops, which made money. They have hit on an uncomfortable truth: for all the collective emotion inspired in fans by football clubs, local areas are often blighted, not enhanced, by their presence. Arsenal, however, maintain they try to be good neighbours and do extensive local charitable work.

"Arsenal is a corporation," said Alison Carmichael of ISCA. "Yet they get special treatment from the council because they're a football business. These plans do not stack up. We're also concerned the council has a conflict of interest because they own half the Ashburton Grove land and stand to profit from selling it. We're calling for the Government to hold a public inquiry so we can have all the issues aired objectively."

Arsenal point to the substantial benefits the scheme will bring, singing the benefits of the redevelopment. "This is the biggest regeneration scheme in London," claimed Paul Dimoldenberg, Arsenal's PR executive.

Some of the PR, though, is embarrassing. Yesterday's announcement that the club's manager, Arsène Wenger, had signed a new four-year contract was undoubtedly timed to create a feel-good factor before Monday's meeting. Arsenal's website this week, following the Champions' League victory over Juventus, proclaimed: "Arsenal players support stadium plans". A click revealed pictures of Thierry Henry and other players training in "Let Arsenal Support Islington" bibs.

Dimoldenberg claims 70 per cent of residents support the plans, but this turns out to be the result of mail drops of 24,000 residents, only 690 of whom replied, 513 in favour. Replies to the council's official consultation process showed a majority against the proposals.

Perhaps most worrying for the councillors is the scheme's scale and complexity, fuelled by Arsenal's need to make as much money from their fans as Manchester United, who, unlike them, have acres of Old Trafford car park to sprawl into. Then there is the uncertainty over funding, the issue that scuppered Wembley. Arsenal, like all other clubs, are wrestling with players' wage inflation and the City is wary.

I suggested to Dimoldenberg there are troubles ahead, and that Wembley, rotting away 10 miles north, must look even more attractive now. "I couldn't disagree with you," was his answer. Yesterday, Friar implied Arsenal would be forced to look outside Islington if permission is refused. This seems the most viable eventual prospect for Arsenal, whose commercial needs have simply outgrown the inner city on which they landed, controversially, 88 years ago.