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Last Updated: Friday, 15 February 2008, 01:50 GMT
Tesco agrees football ground deal
Palmerston Park
The Tesco site is next to Queen of the South's home ground
Supermarket firm Tesco is to hand back a former store site in south west Scotland to the local football club.

A spokesman for the company said it was ready to end its lease agreement with Dumfries side Queen of the South and "gift" the premises back to them.

The site has been sitting empty for a number of years but was still owned on a long lease by the supermarket firm.

Club chairman David Rae said the deal was not yet official but hoped the land could be used to generate extra income.

Tesco leased the site next to Palmerston Park and operated a store out of it for a number of years.

The Saturday gate money is not adequate to cover costs
David Rae
Queen of the South chairman

However, it closed down when the company opened new premises at nearby Cuckoo Bridge in 2004.

There were still many years left to run on the lease but it is understood both sides will now agree to end that deal.

"We have gifted it back to Queen of the South football club," said a Tesco spokesman.

"They have aspirations to develop the site and in the next week or so it will no longer be in our ownership."

He added that with one large store already in the town and another two also planned this location was now surplus to requirements.

The Queen of the South chairman said the deal still had to be completely secured.

Tesco trolley
Tesco has one store in the town and plans another two

"We believe it is going to go through but it is not official yet," said Mr Rae.

However, he said that if the plans went ahead they could help improve the club's financial situation.

"The Saturday gate money is not adequate to cover costs," he said.

"What we need is income outside of Saturday's football.

"This is where this might be suitable to bridge that gap."

Among the uses being considered are for indoor training facilities, ten-pin bowling, office accommodation or storage space.

"We will have a look at all the options," said Mr Rae.

"There is even land beyond the site which belongs to us as well."

'Very cheap'

He added that he believed the income potential of the land would greatly exceed the fixed 50,000-a-year lease payments from Tesco.

"I think the rent was very cheap - maybe back in the early days that was fine," he said.

"We should have been getting 200,000 to 250,000-a-year."

Queen of the South currently sit fourth in the Scottish first division.

The Dumfries club is also through to the Scottish Cup quarter finals next month.

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