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Financing sport facility construction – make use of all possibilities!
The problems are well known by many communities and sport clubs: Existing sports facilities are out-dated and require renovation work while the state coffers have no funds available. How can construction of new facilities or renovation of the old ones still be possible? There are various possibilities for financing this kind of project, but they require focussed planning and a long preparation time. This makes it even more important that all parties involved – administration, users and politicians – are involved together in the planning work to make financing possible.
A new synthetic turf surface for the local clay football pitch, a new roof for the gym, a new running track for the stadium or a sports arena for the new city suburbs: In many areas the future of sports facilities are uncertain as they are either urgently in need of renovation work, are no longer state of the art or are already closed down completely. In other areas there is no existing infrastructure at all and construction of new facilities is urgently required, in both cases usually influenced by the same factor: Funding. At the same time, modern and functioning sports facilities are extremely important for cities and communities. Sporting activities improve the health of the population, sports clubs provide added social value for everyone and modern sports centres are good advertising for many communities – especially when well-known athletes or sportsmen can use them and important competitions can take place there.
Include all interested parties
At the start of a funding project for a new sports centre or renovation of existing facilities, all interested groups should be included, independent of who actually took the initiative to start the project. The community sport authorities or sport centre administration, political representatives and the members of the population or sports clubs in the urban district involved should meet together to discuss which measures are required and the range of possibilities available. The larger the number of parties working towards a mutual project goal, the more possibilities there will be later to achieve funding. When the project is then in the planning stage, it must be decided who will represent the project as contractor – communities or club(s) – and a corresponding call for tenders announced. In many cases, in particular when only low community funding is available, it is advantageous when a sports club takes the role of contractor as it has more freedom to allocate tenders and more possibilities to find funding. In addition, it is important that other framework conditions for this kind of project are created such as application for building permits, clarification of noise protection conditions, conditions of use, requirements and agreement of regional sports associations. When all these steps have been taken, it is important that a financing scheme should also be drawn up for the project. The following is an overview of the different possibilities for generating funding for sports facility construction projects in Germany:
Funds from federal states / regional sports associations
Basically, every federal German state promotes construction of sports facilities but the amount of money made available is dependent on existing funds and the overall demands. In North Rhine Westphalia, for example, communities are awarded money for the promotion of sport in a so-called “Sports Allowance” which is allocated according to the community financing legislation and where each community can decide themselves how the funds are used. The current allowance is around € 3 per person or a minimum amount of € 40,000 per community.
It is intended that this amount is invested in local sporting infrastructures. In addition, outstanding sports facilities are given additional funding and a system has been initiated providing sports clubs with security to enable them to gain access to the credit market and take out loans. The clubs also have the opportunity of receiving money for construction of sports facilities from the regional sports associations in each case. Up to 35% of the investment costs can be provided to clubs in advance although in this case, comprehensive stipulations must be met. For this reason it is also advisable that the clubs contact the regional associations responsible in good time.
Funds from communities / regions
Along with promotional funding from federal states, it is naturally also possible to receive further funds from communities or regions. The financial situation of the local communities is of course decisive for the possibility of funds being provided. As already mentioned, funding is currently tight in many communities which makes it difficult to gain financial support for construction of new sporting infrastructure. In direct discussions between the authorities and clubs, however, financial models are conceivable which make funding easier. These include take-over of a sports location by a club, readiness of a club to be responsible for and carry out care and maintenance work for the infrastructure or to create a project where as many users as possible, including schools and nursery schools, can make use of the sports facilities. These and other similar measures can help save money which can be used to build new sports structures.
Funds from the EU
Earlier considered an “insider tip” to gain funding, this possibility to gain money is now quite well known: Money from EU funds. The money made available by the EU is not intended solely for the construction of sports facilities, but as a regional development programmes for towns or rural areas. For this reason, it is important not to concentrate the sporting aspect of the project on its own, but to clearly emphasise the added value it would bring for the community itself or the region. For example, would the new infrastructure attract more tourists to the locality? Would it promote regional sustainability? Would the quality of life of the local population be improved? Achieving funding for construction of sporting infrastructure in this way requires creativity and good networking as only community politicians can propose subvention projects for EU funding. The current funding period of the Structure Funds was recently extended until 2020, but less money is available than some years ago which makes it more difficult to obtain finances in this way. The most important structure funds are the European Regional Development Fund (ERDF) and the European Agricultural Fund for Rural Development (EAFRD).
Participation and personal contributions by sports clubs
Sport clubs always have more possibilities to gain funds for construction of sports facilities than the communities themselves. When the all funds available from the community are not sufficient to finance a sports construction or renovation project, an initiative from the sports clubs, optimally supported by the community authorities becomes necessary. Along with the already mentioned systems of a take-over or maintenance work carried out by club members, a sports club can naturally also make use of its own funds for a new construction project. Different means of support from development banks can be made use of - above all low interest loans and long credit periods offer clubs the possibility of investing large sums. Care should be taken however, as club debts can also be transferred to voluntarily active private persons. For this reason it is good advice to gain external security or to take corresponding hedging measures. Follow-on costs and measures which will become necessary at a later date, renewal of a synthetic turf pitch after 15 years for example, should also be taken into consideration right from the start as it may otherwise be necessary to take out a new loan before the old one has been paid off and the clubs never get out of debt.
Financial help from industry
Private industry also offers many options support of sport. In recent years an increasing number of companies have recognised that it is right and important to promote sporting activities among the employees. In addition, local support is always good for a company’s image. It does not need to be a sports park on the company grounds, advertising on sports grounds or support for club activities are alternative solutions for a company to provide active support to sports organisations. Direct participation in construction of new sports grounds is possible, at least when the club is named as contractor. As the companies themselves also have a founded interest in promoting local sport, they are often ready to help.
Crowdfunding / Donations
This possibility is only available to clubs and requires a great deal of work and good networking. It is of course difficult to generate sufficient funds for a construction project by selling biscuits locally or small-scale donation requests, a more pro-active approach is required. It is now possible to find ready-to-use crowdfunding concepts in the market but these remain to be proven successful. With ‘lomigo’ for example, sponsors can purchase single parcels of a virtual sports ground in order to provide funds for the actual construction. Advertising and requests must still be made however to gain support and “sell” the product. This project plan is also used by large clubs in Germany such as Arminia Bielefeld. In addition, the internet offers sports clubs numerous opportunities to generate money for club projects, one of these is klubkasse.de in Germany for example. But all these projects are only successful if a large circle of sponsors can be reached.
Financing a new sports ground or renovating an existing one can be a very complex matter. Even when community and regional funding is basically available, it can be difficult to access these funds due to location and the financial situation in the region. For this reason sports clubs in many areas are making great efforts to find financing for urgently required measures. And great effort is also required to make the right connections, find networking contacts and obtain the right addresses to gain help with funding. Regional sports associations provide comprehensive information on this subject and further help can be found with professional sports grounds construction companies. Communities also have possibilities for promoting construction of sports facilities. The best and most promising approach is a cooperation project between the community and sports clubs where all available options can be considered and focus placed on the best possible ones. With successful projects where all those involved have provided their maximum support possible and cooperation has been good, identification with the project is usually so good that users and operators take care of “their” facilities so that renovation or new construction is not needed again in the near future.