The Liverpool mayor, Joe Anderson, has defended the city council’s decision to lend Everton £280m to help build a stadium at Bramley Moore dock, arguing the arrangement fits in with an existing invest-to-earn strategy and will make money for the region over the next 25 years.

Bill Kenwright, the Everton chairman, confirmed at the club’s AGM on Tuesday the present estimate for completion of the stadium was £500m, but there was unexpected consternation when it was revealed the council would be chipping in with a loan for more than half the cost. It was initially assumed Liverpool City Council might simply be acting as guarantor for a private loan, until Anderson clarified the situation by explaining the council intended to borrow the money itself.

Everton’s new stadium costs ‘escalate significantly’ with 2022 target now set Read more

“There is no risk to the city or the council from what we are doing,” the Labour mayor told the Liverpool Echo. “We are trying to bring in more revenue and this should make a profit of nearly £200m over the next 25 years.

“There are restrictions on what we can do with revenue support grant money and council tax. They pay for services, so no one need worry about that. What we can do as a council is borrow at cheap rates and with that money we can help regenerate a wide area of north Liverpool as well as helping Everton. People have got to understand this is a commercial deal to enable us to make money.”

It is estimated the city council could make £7m-a-year profit from interest charged on a loan of £280m over 25 years, plus extra revenue from business rates and related developments once the stadium is up and running.

Facebook Twitter Pinterest The Liverpool mayor, Joe Anderson, said: ‘We are trying to raise money to protect services.’ Photograph: Peter Byrne/PA

Opposition councillors have questioned why the city needs to get involved as a partner when they believe the club would be able to raise finance through private means, and not for the first time Anderson has had to deny going out of his way to favour the club he is known to support.

“I’m a mayor first and an Everton supporter second,” he said. “To people who ask why Everton FC should benefit from the city council at a time when Liverpool faces austerity, I would point out we are trying to raise money to protect services.

“The development site we call Liverpool Waters, from the Pier Head to the docks at Seaforth, was planned to take 30 years and a $5bn investment. We think this is a way of accelerating the regeneration of the region, bringing in jobs, investment and new housing. First it will be a deal that benefits Liverpool, and second it will be a deal that benefits Everton FC.”