There is a power under Section 19 of the Local Government (Miscellaneous Provisions) Act 1976 to provide outdoor sports pitches or to contribute to the costs incurred by any voluntary organisation providing such facilities.
Many Councils at all levels have externalised the provision of recreational facilities through one of several mechanisms, but this is always done to reduce expenditure and spread the financial risk attached to these facilities. The idea of handing over control with a guaranteed subsidy of up to 100% from the public purse makes no sense whatsoever. How realistic is the development plan for the facilities? I've had several football clubs promise me state-of-the-art changing facilities on my sports grounds in return for long leases, but when I talk to the funders, there is no chance whatsoever of securing the necessary finance. Ironically, the Parish Council would be more likely to secure funding, as it's an established body with the requisite knowledge, policies and procedures.
This has the hallmarks of a takeover bid, with the Council losing control of one of its most significant assets. Does the draft lease include a detailed maintenance specification with break clauses for non-compliance? Who will make the decisions regarding the future of the site? Does the Council retain control?