CASH-STRAPPED Plymouth Argyle Football Club has been accused of being more concerned with property development than football after it unveiled plans to "sell" Home Park stadium for £7.5 million.

Shareholders will this month be asked to consider whether they want to offload their home ground to a newly created property company wholly owned by the club.

Argyle directors say dividing club and ground – which will mean the team are effectively tenants at the ground – could make it easier to secure investment to transform the half-refurbished Home Park ground into a Wembley-style events stadium capable of holding rock concerts and World Cup matches.

But questions were raised last night over fears commercial interests were being put ahead of severe problems on the pitch, which commentators argue is at the heart of the relegation-threatened club's financial strife.

Peter Jones, a former member of the Argyle board, said the move was "another step on the road to Plymouth Argyle being more concerned with property development than it is in maintaining a football team of which the city can be proud".

He went on: "I do worry about a football club being beholden to a private property company.

"Whatever the ownership of that private property company is now, what will the ownership be in three years? How much of the prospective income of the property company will be (from) the football club and how much will be hotels and fast food restaurants and things that are all very nice but not much to do with Argyle?"

The Coca-Cola Championship club yesterday revealed plans to sell the ground to a property company, which is wholly owned by Plymouth Argyle Football Company Holdings Ltd, at a market value of £7.5 million. In 2006, the club bought the ground's freehold from Plymouth City Council for £2.7 million.

It came as the Westcountry club revealed a loss of £2.8 million for the year ending May 31, 2009, against a backdrop of Argyle having the highest wage bill in the club's history and a fall in attendances. The club also plans to offer 90,000 shares to existing shareholders at £22.22 each in a bid to raise just short of £2 million.

Argyle were hit with a transfer embargo in December last year due to unpaid debts, but that was lifted by the Football League in January.

A statement from the club said the aim of the ground sell-off and the share issue was to "reduce debt levels in Plymouth Argyle Football Club and thus strengthening its balance sheet. In addition, they should provide a basis for commercial property and development finance to be raised in order to develop the stadium in support of the club's ambitions, as well as Plymouth's support for England's bid to host the 2018/22 World Cup."

The club was yesterday reluctant to release details ahead of its AGM on March 31 when shareholders will discuss the proposed restructuring.

The Western Morning News understands, however, that the sale would be significantly more than a paper transfer and millions of pounds would appear in the credit column of the football club's balance sheet.

In a complicated arrangement, the proposal involves the ground being bought by Home Park Properties Ltd. The company, which is registered at Companies House, would be wholly owned by Plymouth Argyle Football Company Holdings Limited – the club's holding company.

In the current climate, it is hoped banks and other lenders would look more favourably on a property company that is separate from a football club subject to the vagaries of promotion and relegation.

Increased revenue will help to spread the costs of running the stadium, which is currently propped up by 23 home games a season and infrequent rock concerts by the likes of Elton John and George Michael.

Argyle executive director Keith Todd is the only named director of Home Park Properties Ltd, but that is thought to be merely for the purpose of registering the company.

However, it is thought that the directors running the property company will be drawn from the current Argyle board, who would buy the ground through a combination of loans and write-offs.

At present, directors Yasuaki Kagami and George Synan effectively own 38 per cent of the shares in Argyle's parent company. Sir Roy Gardner, the Pilgrims' chairman, and Mr Todd own 13 per cent to give the two camps a majority stake. The remaining 49 per cent is split equally between deputy chairman Paul Stapleton and directors Robert Dennerly and Tony Wrathall.

There are also about 1,000 smaller shareholders.

Peter Jones, vice-chairman of Argyle until he resigned in 2005, said the "core business" of the club should remain football: "A lot of supporters feel far more energy was spent on getting the World Cup bid sorted out than worrying about the fact the club was in the bottom two of the league. That to me says an awful lot."

There was mixed reaction yesterday from commentators on the Plymouth Argyle Supporters on the Internet (PASOTI) website.

One said that while the club "needs refinancing and maybe this is the only way forward in today's world", they "wouldn't want over 100 years of history wasted on a property gamble".