The Problem
Glasgow city council have decided to move the Museum of Transport out of the Kelvin Hall to a larger space at Glasgow Harbour.
The problem as it stands now is what to do with the rest of the building, there are a variety of options available, and the main ones are as follows.
- To sell Kelvin Hall to developers who would create ‘high value housing on the site’ whilst still keeping the façade of the original building as it is a listed part of Kelvin hall. This would however mean losing the sports arena and all competitions that are held there. Although it has been stated that they could relocate the sports arena in another area of Glasgow, where it who be housed in a purpose built building.
- The other suggestion is to gain investment from SportScotland and totally redevelop the inside of Kelvin Hall into a large international sports arena as they can expand into the void where the Transport Museum was originally located.
The problems are that there may be opposition on both sides of the argument. On one hand Glasgow City Council may be building a purpose built sports centre for the residents but unfortunately it is planned to be on the other side of Glasgow meaning the residence would have to travel to get to a sports facility. Also the residents living around Kelvin Hall will also be angered, as the area would undoubtedly turn into a building site by the developers, causing a lot of disruption to the residents.
Where as if they choose to go with turning Kelvin Hall into an international sports arena, all the building work would be internal and an international sports arena will bring a lot of money and people into the area. It will also make that area of Glasgow recognisable to people out with Glasgow.
The main thing to be taken into account is that without funding from a defined source then the building will have to be sold in order for the building to be looked after in the appropriate way.
Glasgow City Councils Main Objectives
The council will take this into account but they also have to keep to their main objectives and decide whether either of these suggestions does comply with these or whether they have to look for other alternatives.
The objectives that the council will be considering are:
- Prioritising education and social inclusion
- Promoting community sports participation
- Promoting the local area (Glasgow)
- Tackle the poverty and poor health experienced by Glasgow’s citizens and provide accessible and relevant services to the city’s diverse communities through the development of Glasgow as a caring city.
If they agree to go ahead with the national sports arena then they are dealing with social inclusion, community sports participation and looking after and promoting the social area.
Where as if they sell to developers then they will gain money from the sale but it is unlikely that they will be able to meet the other objectives.
2.0 Stakeholders
Stakeholders are defined as individuals or groups of people who have an interest in, and stand to be affected by, the success or failure of an organisation.
There are many different groups who can an exert an influence over the strategy chosen for the Kelvin Hall and who also stand to be affected by the outcome/strategy chosen for the Kelvin Hall
The main parties that stand to be affected by the development of the Kelvin Hall are:
- Glasgow City Council
- The Scottish Executive
- SportScotland
- Residents and local people
- Investors/banks
- Historic Scotland
- Developers
- The tourist board
- Employees
- International users
Glasgow City Council
Glasgow City Council is one of the main and most important stakeholders, as it is the councils’ job to choose the most suitable development strategy for the Kelvin Hall. The council must take into account all the opinions of other stakeholders as well as opinions expressed within the council itself.
If the council does not choose the right strategy it stands to gain bad publicity and may also have repercussions in the form of loss of profits.
The Scottish Executive
The Scottish Executive is another very important stakeholder. It has a great influence on the Kelvin Hall project as it can choose how much to invest in the project.
The Scottish executive will be interested in whether the strategy proves successful or not. If it is not there will be a bad public reaction, which would not be good news for them.
SportScotland
SportScotland has an interest in the development of the Kelvin Hall as it is one of the main investors in the project and therefore has a great influence on the project.
If SportScotland does fund the project and it is successful it will benefit from good publicity and awareness of the scheme.
Local community
Members of the public will want to be kept informed about the development of the Kelvin Hall as it has facilities that are used by the public. The new strategy may mean less/more facilities open to them and they will want to be informed. The development may also mean new jobs and/or new services are available.
The public can influence the council’s decision to some degree by signing petitions, protests, media etc.
Investors/Banks
Investors in the Kelvin Hall project will be interested in the project as they will want to be sure their money is being used correctly and any loans will be able to be repaid.
Sponsors will want to know their name is being used for a successful project.
Historic Scotland
Historic Scotland holds a stake in the development of the Kelvin Hall as the building has been listed. This means they will have to be informed of the chosen strategy and any structural developments, as they will have to give the go ahead before these developments can take place.
Developers
Developers will be interested in the project as the initial plans were for them to build flats. If the council does not go ahead with plans to renovate the Kelvin Hall they will want to be informed.
The Tourist Board
The tourist board will be interested in the project, as a successful development may mean more visitors from abroad. Therefore there will be a boost for the Scottish tourist industry.
Employees
Employees of the Kelvin Hall will want to be kept informed of any changes to be implemented as it could affect their position. A change of strategy could mean more/less jobs available.
They are able to influence the decision by using trade unions.
International Users
International users hold a small stake in the project as if the development strategy is implemented they may want to use the facilities. If the Kelvin Hall is completely renovated international users will be wanted in order to maximise the profitability of the scheme.
3.0 Creativity in Generating Decision Making Options
We have decided to keep the Kelvin Hall in its current position in the Kelvinbridge area of Glasgow. We discussed the alternatives of re-locating to another area and selling the existing position to developers for the introduction of new west end flats or offices, while relocating the Kelvin Hall to another area or keeping the sports venue in its current position, modernising the current facilities. We looked at both the positive and negative aspects of these ideas.
Positive Reasons for Relocation
- Would be able to plan and design the building from scratch
- Would enable us to occupy some outside land – offer further range of facilities
- By selling off the Kelvin Hall site to developers we would have a greater amount of money to spend on the new facilities
Negative Reasons for Relocation
- By selling off the current site, the council would become unpopular with local businesses and residents who are against this idea – bad press
- By re-locating our costs could spiral out of control – similar to the Scottish Parliament, not enough funding available for such things to take place
- Then there is the question of where to relocate?
- What would become of the Kelvin Hall?
When both the positive and negative points for the relocation of the Kelvin Hall were considered we decided that it would be in the best interest of the council, local residents and businesses and Sport Scotland, that the Kelvin Hall should remain in its existing position.
We realised that the Kelvin Hall had many positive points, which can be expanded upon:
- The Transport Museum is moving, freeing up lots of space for new facilities
- Although dated, the Kelvin Hall has existing facilities that just need re-modernisation, cheaper than starting from scratch in a new build
- Local support from surrounding area
- Character of new facilities in an old building, eye catching for international spectators.
- Nearby to lots of facilities, underground, hotels and city centre, ideal for international competitors competing in indoor events.
We also took into account our stakeholders:
- Local residents
- Taxpayers
- The sports association
- Kelvin Hall staff
- Sponsors
- Investors
- Bystanders
After looking at the consequences for them it seemed in the best interest for all that the Kelvin Hall remained in its current position.
Taking each stakeholder individually – local residents, were against the idea of flats, more congestion and parking problems. Taxpayers – less tax will be spent, as the costs will not be as high as those of relocation costs. Kelvin Hall staff – jobs are safe do not have to worry about commuting to work. Sponsors – do not win or lose either way would have been happy. Bystanders e.g. hotels – more city centre hotels will be used local businesses will keep benefiting from the Kelvin Hall staying put. And investors – less money will be required in updating the facilities than would be required in building bespoke indoor facilities.
Due to all of the above reasons our final decision was to leave the Kelvin Hall in its existing position as we felt as a group that it was in the best interest of the majority of people involved, and would in turn be a less costly exercise than relocating and building bespoke facilities.
4.0 DEVELOPMENT OF A NEGOTIATION STRATEGY BASED ON THE 4-STAGE PDBM MODEL
Prepare:
Negotiation Scenario
At this point the council is faced with the following scenario:
- It is faced with a difficult problem, which includes developing a strategy, for the future of the Kelvin Hall. This must take account of not only of the various opinions expressed within the council, but also those of the many stakeholders.
- Raise the fund necessary to re-develop the Kelvin Hall. Some money available from Sport Scotland and the Scottish executive, but strategy has to fit in with the over-all plans of sport Scotland and the Scottish Executive for the future development of national sport.
- The Kelvin Hall arena needs £17m in funding to be able to provide a venue for training and competitions. Its primary focus is to be in athletics.
What do you wish to gain from the negotiation?
- As much funds as possible to be able to re-furnish the Kelvin hall.
- Develop a good relationship with between the Glasgow city council and Sport Scotland as a provision for future agreements.
What are our minimum requirements from the negotiation?
- Not to affect any previous finding deals agreed with other party’s.
-
That SportScotland supply us with 30%of the total cost of the project (£5.1m)
What do you think the other side will require from the negotiation?
a. A consistency with there main aims, which includes the promotion of health and social inclusion.
b. A indoor sport arena with a 200-meter athletic track and facilities for other sports
- A relocation of the Sport Scotland headquarters to the city of Glasgow, based in the Kelvin Hall.
What are the main obstacles to a successful agreement likely to be?
- Satisfying all the 32 local authorities (monies distributed fairly)
- Not enough money funds available.
- Political pressure.
- Bidding wars.
- Other deals.
Debate
What confidential information is appropriate or not appropriate to disclose?
- Details of other agreements.
- Key sponsors.
What information would we like from the other side.
- Amount of funds available
- Other bidders names
- What are other bidders they offering?
- How are the funds to be allocated?
- Risk.
- What SportScotland want from the investment.
How would you go about getting this information?
Before.
- Asking the media.
- Looking at the SportScotland web site.
- Sources within SportScotland.
During the negotiation
a. Asking questions for clarification.
b. Look for clues and signals and test their commitment.
c. Be non -committal.
Will we consider trading information with the other side?
Yes, if we believe its necessary to achieve our goal.
Propose
What should be our initial position?
- Respect any minimum requirements pre agreed with other party’s.
- We require 40% of the total cost to go ahead with the project.
- We offer to reallocate the SportScotland HQ to the refurbish Kelvin Hall.
- To provide the most comprehensive Sport Facility available
Bargain.
What are we prepared to compromise over?
- The design of the new facilities that allows the Kelvin Hall to integrate more sports and not just athletics, assuming we get the funds required.
- A larger space to bill the new HQ.
- A % of the funds.
- The involvement of other investors.
How much are we prepared to compromise?
£1.7m
What requirements will there be no compromise over?
Deals agreed previously with other party’s.
Outcome
- 30%-40% of total cost funded.
- A reallocation of the sport Scotland HQ to Kelvin Hall.
- A sports facility that Glasgow will be proud of.
4.1Negotiation Briefing
Overview
The negotiation scenario is between Glasgow City Council and SportScotland. An agreement is to be reached on the level of funding that SportScotland will supply for the regeneration of the Kelvin Hall sports facilities. The council will want to ensure that the maximum levels of funds available are obtained and that Sport Scotland will have minimum intervention in the way that the project is conducted. The proposed outcome of the negotiation is that SportScotland will fund between 30% and 40% of the total cost of the Kelvin Hall project and that the Head Quarters of SportScotland are relocated to the Kelvin Hall as well.
The Negotiation Process
The minimum requirements of the council are that they obtain 30% of the total cost to refurbish the Kelvin Hall by means of funding from SportScotland, and that any previous agreements with other parties are not affected by agreements reached with SportScotland. The reason being that other organisations will be investing as well and we have to honour any compromises that we made with them. The council will also hope to build a good working relationship between themselves and SportScotland.
SportScotland are going to want something in return for their investment. The council have proposed that the organisations head quarters are relocated to the Kelvin Hall. However, they are going to want maximum return for minimal investment. This could mean that they are looking towards sole sponsorship for some of the events, which will have to be considered during the negotiation process as this may conflict with the agreements made with other parties.
There are many obstacles to overcome in order to reach a decision about the involvement of SportScotland. The council are going to have to ensure that the stakeholders are satisfied with the agreement, which has been reached. For example local residents should be asked about their views on SpotScotland Relocating to the Kelvin Hall. There is also the problem that there are not enough funds available this means that the council will have to look at other resources in order to raise the capital required. The council will also be subject to political pressure from people who believe that the money should be invested in other projects or that the Kelvin Hall project is a waste of time and should be scrapped altogether. The other main obstacle is that the council must ensure that they honour any agreements made with other parties.
Information from the other party in a negotiation scenario can be very valuable. In terms of SportScotland it would be useful to know the total amount of funds actually available and what percentage they are willing to invest in the Kelvin Hall. This would give the council a more realistic idea of the level of funding they should be asking for. It would also be helpful to know what SportScotland want to from the investment in terms of return. This would enable the council to make a more accurate proposal to the organisation, which may aid in coming to a final agreement. In terms of the information required it could be obtained in a variety of ways. The council could use the SportScotland website to discover what they go in return from previous projects. The media is another medium that could be explored in an effort to gain information. Finally, the council could try and get inside information from members of SportScotland who are involved in the project.
There is also the option of trading information with the other side. However, this approach should only be adopted if it is believed that this is necessary in order to achieve our goal.
The council are prepared to compromise over certain areas of the negotiation process. In terms of the design of the new facilities the council are willing to allow SportScotland to have a say in the way which it is set up and organised assuming that the council receive the funds that they require. They will also allow a larger space for the head quarters of SportScotland to be built on and are willing to compromise over the percentage of the funds (around £1.7 million) that they receive from SportScotland. There will however be no compromise on the agreements reached between the council and other investors involved in the project.
Outcome and Conclusions
The predicted outcome is that SportScotland will fund 30% to 40% of the cost of the Kelvin Hall project. It also believed that SportScotland would be relocating their head quarters to where the museum of transport used to be. In accepting such a proposal the council will still have to find a large majority of funding in order to proceed with the project this could be done through organising sponsorship deals and encouraging new investors to enter the project. The main priority for the council is to ensure the completion of a sports facility that Glasgow will be proud and which will generate healthy revenues for the city. This would be accomplished by important sporting events taking place in the refurbished Kelvin Hall. The council must also ensure that the outcome of any negotiation satisfies the stakeholders involved in the project. They must ensure that any decision that is made involves the stakeholders and keeps their interest in mind. It is however going to be difficult to keep the intervention of SportScotland to a minimum, the reason for this being that they may be financing a great deal of the project and will have a say in the way which the project is conducted. This should not pose a problem to the council as long as they receive the funding required for the successful completion of the project.
5.0 Conclusion
This report has investigated the future of Kelvin Hall: Selling to the developers for the high value housing or relocated to another area, while the alternatives of re-locating to another area or keeping the sport venue in its current position, refurbished the current facilities.
By using the both positive and negative decision-making and negotiation analysis presented above, it gives an indication that keeps the Kelvin Hall in the location is the most effective option for its future plan.
According to our findings above, we are not only emphasize on the role of the Kelvin Hall itself, but also the role of Glasgow City Council, local residents, businesses and sport associations.
In 2002 –2003, the council’s priorities and the key objective is to improve the well being of Glasgow and its citizens, which aims to improve the effectiveness and giving the “best” value for money of all Council services; promoting communicating sports participation and Tackle the poverty and poor health experienced by Glasgow’s citizens and provide accessible and relevant services to the city’s diverse communities through the development of Glasgow as a caring city.
For the view of the local residents, they want to have more facilities open to them that they can used in public and want to be kept informed about the development of the Kelvin Hall as the development may also mean new jobs and/or new services are available.
In the role of the investors in the Kelvin Hall project, they will be interested in the project as they will invested if the Council make sure the money is being used correctly and any loans will be able to be repaid to them, also sponsors will want to know their name is being used for a successful project.
SportScotland has an interest in the development of the Kelvin Hall as it is one of the main investors in the project and therefore has a great influence on the project.
In order to achieve the objectives above and keep the best interest of the council, local residents and businesses and Sport Scotland, we decided that the Kelvin Hall should remain in its existing position and we also suggest that if there is an opportunity to combining a SportScotland headquarter with the modernizing indoor arena, the following benefits may be achievable:
- It will build cost savings due to the design economies, one set of prelims & contingencies, fees will be reduced and savings from larger build contract
- Travel time and expense will be saved by meeting athletes / facilities managers on site
- Staff morale will be improved and greater attractiveness to potential employees through working in a ‘sports village’, and having the opportunity to mix with international athletes
- Reduced staff loss from relocation process and more job security
- Improved Glasgow’s economic– greater job creation through the new facilities
- In accepting such a proposal, the council will still have to find a large majority of funding in order to proceed with the project this could be done through organising sponsorship deals and encouraging new investors to enter the project
To summarize all the above analysis and reasons, we decided to keep the Kelvin Hall and suggest that there is an ideal opportunity if SportScotland adopt a combined approach to facilities provision, we believe there to be a unique opportunity to deliver the sporting infrastructure across its corporate objectives and, in particular, to achieving excellence goals. By combining a SportScotland HQ with a refurbished indoor arena would bring a multi-million-pound boost to Glasgow and generate healthy revenues for the city.
Reference
www.historic-scotland.gov.uk
www.glasgow.gov.uk
www.glasgow.gov.uk/html/council/councilidiary2.htm
www.glasgow.gov.uk/cityplan/index.htm
www.sportscotland.org.uk
“Herald” newspaper, 4 May 2001 (by john Mac Calman)
“Rampant Scotland” newsletter, 5 May 2001
Press Release issued by Sandra White MSP 15 April, 2002
Minutes of the Policy and Resources Committee of Glasgow city Council 19th June 2002
Final report on the Best Value Review of Sport and Active Recreation, by Director of Culture and Leisure Services, 17 Dec, 2002
Minutes of the West End Area committee, Glasgow City Council, 2 Sept 2003
“Sunday Herald” newspaper, 28 Sept, 2003 by Natasha Woods
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