Brussels will decide whether a reduced rent for Limassol’s three topflight teams, AEL, Apollon and Aris, for their newly-built stadium, the Alpha Mega Arena, constitutes illegal state aid.
The dispute landed on the European Commission’s doorstep following a letter by Auditor General, Odysseas Michaelides, arguing the reduced rent offered to the Limassol football clubs constitutes state aid.
The European Commission must establish whether the €400,000 per year granted by the government to the clubs for managing the stadium constitutes state aid, as the rent was originally set at €865,000.
Should it be found that the yearly rent price for the stadium is lower than the government grant, the clubs will be obliged to pay the owed rent to KOA or leave the stadium.
However, if estimates based on real estate market evaluations reveal that €400,000 is a fair yearly rent, the matter will be closed.
The Alpha Mega arena was inaugurated in November after it was built by the Cyprus Sports Organisation (KOA) as the new home for the three clubs after their old home, Tsirion stadium, was deemed unsafe.
The teams were told just weeks before moving in that they would have to collectively pay the amount of €865,000 a year.
Upon a pushback, with the argument that the teams would not be viable, KOA accepted a reduced rent of €400,000.
Before taking the case to the EU, Michaelides sent letters to both KOA and the state aid control commissioner, Stella Michaelidou, stressing that, as a matter of principle, the management of state property should not be given to private businesses or individuals through direct grants.
The state aid control commissioner said she had secured a ‘pre-approval’ from the European Commission for the stadium’s operation.
However, following Michaelides’ letter, Brussels now needs to vet the final contract between KOA and the clubs.
One of the arguments put forward by the Auditor General is that selling the naming rights to Alpha Mega supermarkets should have generated €328,000.
If Michaelides is proven right, the Limassol clubs will have every right to feel they got the short end of the stick, as they have been suffering.
The new football stadium in Limassol was plagued with problems from the outset.
The rent was initially set at €865,000, considering the stadium cost, which ballooned to €40 mln from an initial €28 mln.
Bad planning also saw the stadium’s capacity reduced from 12,000 to just over 10,000 after it emerged that developers had ordered larger seats than the ones designated on the blueprint.
The objective of building the new stadium was to help the Limassol clubs; however, as they claim, they were hit with rent which they could not afford, without warning.
The three clubs had clarified they would not stay at the new stadium should authorities demand the full amount of €865,000.
If Brussels delivers an opinion forcing the teams to pay up, then this could see them leave the Alpha Mega arena in search of a new stadium, while the €40 mln stadium goes to waste.
The only other stadium large enough to host first division games is the Tsirion, which is falling apart.