West Ham bid to take over Olympic Stadium given greenlight by Legacy Company but safety net put in place
Wednesday, 05 December 2012
December 5 - Premier League club West Ham United have taken a major step towards moving into the Olympic Stadium after they were "ranked highest of the bids received", according to the London Legacy Development Corporation (LLDC).
But the Legacy Company, whose 19-member Board, chaired by London Mayor Boris Johnson met this morning to discuss the options following London 2012, is also planning to have a non-football option in case a deal with West Ham for a 99-year lease on the £429 million ($691 million/€528 million) Stadium falls through.
This includes the Stadium hosting major concerts and other events.
The Legacy Company decided that any deal with West Ham should be dependent on a number of criteria being agreed after they were, as widely expected, chosen ahead of rival bidders League One club Leyton Orient, UCFB College of Football Business and Intelligent Transport Services in association with Formula One.
This included the final specification for adaptations to the Stadium and associated funding; securing planning permission; obtaining appropriate national governing body approvals; and the finalisation of commercial terms, including a mechanism to protect the taxpayers' investment in the Stadium were the value of the club to increase significantly through a change in location.
"Today's decision on the stadium represents an important milestone towards reopening the Olympic Stadium," said Denis Hone, chief executive of the Legacy Company.
"If we are to have a football tenant, West Ham and other parties will need to meet the conditions that the Board has set out today.
"If a deal is not possible then we will bring the Stadium back into use as soon as possible."
Converting the Stadium from its current configuration into a 60,000 arena capable of hosting world-class football and athletics will cost between £130 million ($209 million/€160 million) and £200 million ($322 million/€246 million), it is estimated.
The Stadium is due to be configured to provide a retractable/moveable seating solution so there could be a quick change over between athletics and football use.
The Stadium has already been chosen to host the 2017 International Association of Athletics Federations (IAAF) World Championships.
Retaining the track after London 2012 was one of the key legacy promises that was made by the capital during its successful bid.
West Ham have offered £15 million ($24 million/€18 million) in cash plus a minimum £9 million ($14million/€11 million)-a-year in rent and share of commercial revenues to help pay for the renovation costs.
Newham Borough Council are expected to contribute up to £60 million ($97 million/€74 million) to ensure the viability of the project while the Treasury are also contributing £38 million ($61 million/€47 million).
However, West Ham will also be expected help to fill the funding gap in the building work necessary to transform a track and field venue into a multi-sports arena.
There is currently estimated to be a £20 million ($32 million/€25 million) shortfall in what is needed to renovate the Stadium but West Ham are optimistic that can be covered.
"For the last three years it has been my firm, unwavering belief that the Stadium can truly become a multi-use destination of which East London and the nation as a whole can be proud," said Karren Brady, West Ham's vice-chairman, who has led the negotiations with the LLDC.
"I have never lost sight of our vision to play our part, along with the Stadium's major stakeholders, in ensuring it grows into a global asset.
"It is the 'jewel in the crown' of the Park, watched by the world.
"Our vision for the Stadium has always been about standing up for the promises made for London back in Singapore in 2005 [where the 2012 Olympics and Paralympics were awarded].
"We are committed to delivering our promises as set out in our bid."
Having a back-up plan would appear to be as much a bargaining chip by the Legacy Company to ensure that they get the best financial deal out of West Ham.
"My position on the future of the Stadium remains what it has always been: that we can secure a terrific future for this much loved and iconic venue with or without a football team playing there," said Johnson.
"I hope the detailed negotiations with West Ham can succeed, but I am determined that any deal should protect the interests of taxpayers who have paid for the Stadium and would have to pay more for adaptations to make it suitable for football."
In the meantime, the Legacy Corporation has already started the process to procure a Stadium operator to manage the venue, coordinate community and sporting use, and to bring in various concerts and events, whichever option is eventually pursued.
It hoping too use the Stadium for concerts next year before the reconstruction begins.
It follows criticism when it was revealed that the Stadium may not reopen until after the start of the next Summer Olympics in Rio de Janeiro in 2016.
West Ham be hoping there is no repeat of the problems that led to their initial successful bid last year being scrapped following the threat of a legal challenge from Tottenham Hotspur and Leyton Orient.
But, even once a deal is agreed, West Ham are not set to move there from their current ground at Upton Park until the start of the 2016-2017 season, although they are optimistic they could be in the season before.
"The hard work really does start here and work is already well underway to ensure that we really bring our community, which includes 500,000 supporters in East London and Essex alone, with us," said Brady.
"We are already working with key strategic partners to ensure that unemployed East Londoners in key target groups will have access to sustainable employment in the Olympic Park via the 700-plus job opportunities that West Ham's tenancy will create.
"We guarantee millions of visitors and customers, which will galvanise the Park and act as the catalyst to spark a thriving economy in this part of East London.
"In selecting West Ham United, the LLDC have secured a long-term viable financial future for the Park."
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