MANCHESTER, England — In the 14 years since an investment vehicle linked to the state of Abu Dhabi bought Manchester City, the emirate’s wealth has transformed the football club from a Premier League-run into a serial domestic champion and one of the world’s powerhouses. the sport .
However, the scope of that investment extends well beyond the boundaries of the club’s Etihad Stadium, according to a report published Thursday by researchers in England. In it, the report’s authors said the club’s owners took advantage of what they called a “sweetheart deal” with local lawmakers, which allowed them to purchase large tracts of public land in Manchester at significantly lower prices.
The 65-page report, published by academics from the University of Sheffield, found that Manchester Life, a joint venture between Manchester City Council and the Abu Dhabi United Group – a private equity firm owned by Sheikh Mansour bin Zayed al Nahyan United Arab Emirates’ deputy prime minister and brother of the country’s president — has led to a “transfer of public wealth into private hands that is difficult to justify as prudent”.
Manchester has in recent years ceased to be a standard-bearer for the regeneration of Britain’s cities, revisiting years of post-industrial decline to reshape the inner city as dynamic and desirable. The construction and property boom has only been surpassed by London; according to some statistics it is the fastest growing city in England.
Manchester City’s ownership group took center stage, investing millions of dollars in the deprived areas in the immediate vicinity of the stadium that bears the name of the UAE-backed airline, Etihad. When the Manchester Life venture was launched in 2014, six years after the group bought the football team, it aimed to extend that investment into Ancoats, a neighborhood sandwiched between the stadium and Manchester city centre.
However, the researchers claim that ADUG outperformed its partner before. They found that nine locations in the Ancoats district had been sold to holding companies registered in Jersey’s offshore tax haven — but ultimately owned by the investment vehicle — at prices below the comparable market value of comparable locations.
The Manchester City Council insisted that each of the deals – which granted the United Group’s holding companies 999-year leases for the properties – told investigators that all proposals “provided the best consideration”. But despite a chronic homelessness problem in the city, the developers were exempted from fulfilling commitments to include affordable housing by planning officials who decided there was enough supply in the area to meet demand, the report found.
The report also concluded that the “traceable rental and sale revenues” from the 1,468 homes built so far on the sites “flow only into the interests of Abu Dhabi”. Although the Manchester City Council claims to have a revenue-sharing scheme with its partners, the researchers said they had found “no revenue from the Manchester Life investment in the council’s accounts”.
Although the management company overseeing the developments posted £0.1 million in rental income in 2021 (just over $12 million), the researchers found that because the ultimate owner is a Jersey-based holding company, it paid just £4,000 in corporate tax.
“Our assessment of the development of Manchester Life is that Manchester City Council ‘sold the family silver too cheaply,'” the researchers concluded.
That’s particularly damaging, they said, given the “reputational risks” to lawmakers in a British city becoming entangled enough with a group backed by the elite of an autocratic state, one described by Amnesty International as one of the “brutal cops”. states in the Middle East.” In recent years, countries like Russia, China, Qatar and Saudi Arabia have all been accused of using money and influence, particularly in sports, as a way to “wash” their reputation. But investments in real estate and other ventures, and the people who make them possible, have also been criticized.
“In the longer term, it raises questions about what values and whose values the city represents,” the researchers wrote of the land deals approved by Manchester City Council, adding: “This is important as Manchester is heralded as a urban renewal model that other authorities should follow, but if that model is based on attracting developers in the short term by selling access to its assets at a discount, then that may not be a healthy and sustainable model for others.
