Spurs force West Ham Olympic Stadium deal collapse

11 October 2011 03:46
West Ham's deal to take over the Olympic Stadium has dramatically collapsed.

The Hammers and Newham Council had agreed a move into the ?486million arena after next summer's Games.

But the Government, who insist the stadium will not become a 'white elephant', pulled the plug on the deal after legal challenges by Tottenham and Leyton Orient - plus an anonymous complaint to the European Commission - led to fears that court action could drag on for years while the stadium remains empty.

It will now remain in public ownership after the Olympics and be rented out to the winner of a new bidding process. West Ham have already announced that they will bid to become tenants.

Nearing completion: An aerial view of the Olympic Stadium in Stratford

So, what next?January 2012: Expected deadline for bidding clubs to submit proposals to become the stadium's tenants

February/March: Decision likely on who will become the new tenants

July 27 to August 12 - Olympic Games

August 29 - September 9 - Paralympic Games

September - Work begins on transforming 80,000-seater stadium into 60,000 venue

August 2014 - Football club to move into their new stadium for the start of the 2014-15 season

That would mean a similar deal to the one Manchester City set up with the Commonwealth Games stadium after 2002.

It is likely that under the new tender process any costs of transforming the stadium after the 2012 Games will be covered by the Olympic Park Legacy Company.

Prospective tenants will then be asked to bid for the stadium with the running track remaining in place.

The tenants would pay an annual rent to the OPLC which could actually prove to be less costly for the likes of West Ham.

The collapse of the deal for West Ham to buy the stadium has left a funding gap of up to ?60m needed to transform the venue before it can be leased out.

The deal would have seen the ?95m cost split with ?35m from the Olympics budget, ?20m from West Ham and ?40m from Newham Council. If similar changes are to be made then only the ?35m is guaranteed and a gap of ?60m will have to be filled.

But London Mayor Boris Johnson insisted the stadium would not become a burden to the taxpayer.

He said: 'I am confident that this decision is the best way to ensure we have certainty over the stadium's future.

'Ibelieve it will also put us in the place where we always intended to be- delivering a lasting sustainable legacy for the stadium backed up by arobust but flexible business plan that provides a very good return to the taxpayer.'

All smiles: West Ham pose outside the 2012 stadium after their initial victory

Vow: Boris Johnson

Sports minister Hugh Robertson added: 'The key point is the action we have taken today is about removing the uncertainty. The process had become bogged down in legal paralysis.

'Particularly relevant has been the anonymous complaint to the EC over "state aid" and the OPLC received a letter from Newham Council yesterday saying because of the uncertainty they no longer wanted to proceed.

'That was the straw that broke the camel's back and we thought it better to stop it dead in it tracks now. We know there is huge interest in the stadium out there from private operators and football clubs and crucially we remove any uncertainty.'

Around ?35m earmarked under the Olympic Budget will be used to transform the stadium after the Games. Prospective tenants will then be asked to bid for the stadium with the running track remaining in place.

Robertson said: 'This is not a white elephant stadium where no-one wants it, we have had two big clubs fighting tooth and nail to get it.

'The new process will be more like how Manchester City took over the Commonwealth Games stadium which is regarded as a leading example of how to do it.'

The move will also remove uncertaintyover the stadium ahead of London's bid for the 2017 world athletics championships, although that was not a major consideration in the decision to abandon the current deal.

The Government, the London Mayor's office and the OPLC have moved to scrap the current deal in order to tryto end the legal challenges over the stadium's ownership.

Grand designs: Spurs also have plans for redeveloping White Hart Lane

There has been an anonymous complaintto the European Commission, claiming that the ?40million being providedby Newham to West Ham represented 'state aid'. That complaint was regarded with particular concern with worries that it could take years to come to a conclusion.

There were also fears that the application for a judicial review by Spurs and Orient could drag on and even if their bids failed they could appeal.

It is understood that no contract hasbeen signed with West Ham, allowing the move to a fresh tender process,but the club will be encouraged to bid again.

In February, West Ham were selected as the preferred bidder for the stadium. The club planned to downsize from 80,000 to 60,000 seats on a 125-year lease.

A joint statement from West Ham and Newham before the official Government statement read: 'We understand Ministers will make a statement later and will not pre-empt that. 

Moving out: West Ham are keen to leave Upton Park in east London

'Uncertainty caused by the anonymous complaint to the European Commission and ongoing legal challenges have put the Olympic legacy at risk and certainly a stadium, as we envisionedit, may not be in place by 2014 due as a direct result of the legal delay.

'Therefore we would welcome a move by OPLC and government to end that uncertainty and allow a football and athletics stadium to be in place by 2014 under a new process. If the speculation is true, West Ham will look to become a tenant of the stadium while Newham will aim to help deliver the legacy.

'Our bid is the only one that will secure the sporting and community legacy promise of the Olympic Stadium - an amazing year-round home for football, athletics and community events of which the nation could be proud.

'The true legacy of London 2012 will be the creation of jobs and a generation of young people inspired by sport based around a community home for all by 2014. We remain committed to help deliver that legacy promise to the people of London and the nation.'

West Ham had planned to retain the running track after leaving their current home at Upton Park, while Tottenham proposed knocking down most of the stadium and building a 60,000-seater, football-only venueon the same site without any athletics legacy.

High hopes: West Ham want to be playing top-flight football at Stratford

Leyton Orient chairman Barry Hearn welcomed the news and confirmed his club would look to be a tenant when the new tender process opens.

'Today is a fabulous day for Leyton Orient fans,' he told Sky Sports News. 'It puts the whole thing back in the public domain as it should be.

'The system of deliverance was fundamentally flawed and now they have got to go back to the beginning and start again and we will be an interested party in that bidding process.

'West Ham are not a shoo-in, that's very good because they will be competing with a host of other people who have claims on and plans for the Olympic Stadium. It's a legacy operation and at last the OPLC have finally listened to someone with common sense and said 'we messed it up before, let's not mess it up again'. The whole process starts now.

'I can tell you that I am definitely interested in being part of the tender process. If that involves groundshare, we will have to look at the situation and see if it makes sense for everyone.

'But we are a small club and we would be lost in a 60,000-seater. Perhaps it makes more sense to go back to the original plan for 25,000 seats which is fine for athletics - perhaps it makes more sense to spend less money on conversion costs and actually get a proper, community-spirited club in there which fits the ethos of what we're talking about, the Olympic Games.

Delight: Leyton Orient chairman Barry Hearn will fight on

'The expert advice that we got on European law and on state aid showed that the Newham loan was illegal, which we said from day one. No one listened to us at all, they just thought we were little Leyton Orient, just go away and return to the wilderness of the east end of London.'

UK Athletics chairman Ed Warner welcomed the move, telling BBC Radio Five Live: 'It's fantastic for UK Athletics and it is a bold and decisive move by the legacy company.'

Warner also predicted that the decision would help London's bid for the 2017 World Athletics Championships.

He added: 'We had a meeting with the IAAF inspectors last week and we gave Government guarantees that the athletics track will stay in place.

The move you see today is simply confirmation of what we told the IAAF. The IAAF were concerned when they arrived but when they left they told us that the issue was completely resolved. We laid out the legal options and they went away happy. I'm very hopeful that we will get the nod for 2017.'

 Leo's London: Can Chelsea, Tottenham and West Ham really support bigger stadiums?Sports minister blasts Tottenham over 'pointless' Olympic Stadium reviewLondon hailed as IAAF chiefs prepare to make a decision over 2017 World Championships

Source: Daily_Mail