Queen of the South have been approached by an investment company who want to build a new grandstand at the Dumfries ground complete with business park.
The club has been approached by investors who want to build a new grandstand and create a business park at Palmerston.
The move would form part of the £200 million Crichton Trust initiative announced at the Easterbrook Hall in Dumfries on Monday.
Despite negotiations being at an early stage, Queens’ chairman Billy Hewitson is cautiously optimistic.
He said: “The deal would have to be right for Queen of the South and for the investor.
“They’re not going to be investing for nothing so I need to know what that deal is and how that gets repaid, or does it get repaid? Certainly the club won’t be going in to debt to do it.
“When John McGee (the Crichton Trust’s managing director) came along and offered the money I said ‘put me down for that’ but we’ll wait and see what the deal is.
“It depends on what sort of community benefit they are looking for or if it’s just a financial benefit. If it’s a financial benefit only then it might be difficult to make that work.”
However, the chairman admits that no matter what happens with the Crichton Trust, the club will have to upgrade their 96-year-old ground soon.
The main stand opened 50 years ago and is in desperate need of upgrading.
Mr Hewiston said: “We only need a new main stand then probably two covered terraces. We won’t be getting rid of them because they’ll come back into fashion.
“Parkhead (Celtic) is creating them again and they will come back.
“We need a new plan drawn up with a new main stand and two covered terraces. We’ll tidy up the terraces and make sure they are fit for purpose.
“But at the end of the day any work has to be sustainable and not impact at all on the football club. We’ll work away at it.”
A new main stand could cost in the region of £3.5 million but adding in the offices would cost an extra £7 million with other ground developments adding further expense.
The Doonhamers’ last new stand – the East Stand – was opened in April, 1995.
In recent years the club has replaced its grass pitch with a synthetic one and redeveloped a former supermarket building on site into the Palmerston Arena which includes two indoor pitches, a cafe, the club office and shop as well as numerous other businesses.
Palmerston with its artificial pitch is now used by many local clubs and players of all ages