The Crystal Palace chairman, Steve Parish, has said funds for next month’s transfer window are ring-fenced and will not be affected by the club’s determination to pursue an ambitious £100m redevelopment of Selhurst Park’s main stand.

Palace, 18th in the Premier League after the worst-ever start to a top-flight campaign and no away goal in the division since April, have unveiled eye-catching plans for the redevelopment of their home of more than 93 years which would increase the capacity from 26,300 to 34,000. The original main stand would be rebuilt as a glass-fronted, 13,500-seat stand with the design, drawn up by KSS, who oversaw Liverpool’s revamp of Anfield, to be submitted for planning permission to Croydon council next month.

The club intend to lean on their major shareholders – Parish and the American businessmen Josh Harris and David Blitzer – and will explore debentures and advance season-ticket sales to fund the two-year build, which they would hope to complete by the start of the 2020-21 season. Yet Palace still intend to flex their muscles in next month’s transfer window, when Roy Hodgson hopes to recruit a goalkeeper, striker and, potentially, another attacking midfielder.

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“That transfer budget is ring-fenced,” said Parish. “If you look at the 14 clubs below the top six, pretty much everyone is spending – apart from the promoted clubs, where you almost can’t spend it all. You’ve pretty much got to spend everything on the playing side or you run an even bigger risk of relegation. It’s impossible not to spend almost all your turnover on the playing side if you want to compete. Sometimes you’re smarter and get a good player for less, but other times you have to pay. It’s the nature of the beast, really.”

Dialogue began with the council’s planning department last month and is ongoing with Sainsbury’s, whose store adjoins the ground, with Palace seeking “a tiny sliver of land” from the supermarket. “I can’t imagine for a minute that Sainsbury’s want to be the people who hold up the development of a new iconic venue for south London,” said Parish, who admitted residents would need to be appeased. “We’ve deliberately chosen something with the minimal potential roadblocks, and Croydon council have been outstanding so far. We’ve put them under pressure, time-wise, and they’ve responded brilliantly. I’m sure they’re not going to want to drop this. I’m sure they’re going to want to be sensible.

“For the long-term future of this football club, it’s essential we improve this facility here. There might be some things that are easier to do in the Championship, with the number of spectators coming in not being as high, albeit the financing would be more difficult. But, as a club, we’ve got to get past relegation being the be-all and end-all. People think we’ve stalled, asking: ‘What are we here to do? Avoid relegation every year?’ That’s our reality at the moment, and we can’t run away from the mistakes that have got us into this position, but that’s on-the-pitch stuff. This is the long-term future of the club. It’s got to happen.” The plans would also have to be approved by the regional planning authority at the mayor of London’s office.

Palace will benefit from around £2m in compensation due after their former manager, Sam Allardyce, joined Everton last week, with the Merseyside club also hoping to prise the goalkeeping coach, Martyn Margetson, away from Selhurst Park. “Sam did a great job for us, he was 100% honest for me the entire time he worked for the club,” added Parish. “I was asked by Everton what I thought and I said he was a brilliant manager to work with.

“He feels a bit better about life and this is a different kind of challenge with the ownership they’ve got. We all know the kind of money they are going to be prepared to spend. I don’t begrudge him it. I like the people at Everton and wish him every success. I wish they weren’t trying to nick our goalkeeping coach but other than that, I like them.”