Thursday, 13 October 2011

The truth about the Olympic Stadium

There has been a lot of crap written about the original Olympic Stadium bid, why the bid collapsed and the new tender process. I thought I would share what I know to dispel some of the myths.
In the original bid a stadium holding company jointly owned by West ham and Newham council would own the Olympic Stadium and pay the estimated £5M per year running costs.

The cost to convert the stadium from 80,000 to 60,000 would be £95M with £35M from the original Olympic budget plus £20m from West Ham and £40m from the local authority, Newham Council.

West Ham would rent the Stadium from the holding company on a 125 year lease. However it was hoped revenue would also come in from Essex Cricket Club, NFL, Concerts and other sports to contribute towards the £5M running costs and paying back the repayments and interest on the Newham council £40M loan.
West Ham's liability could have been as much as £5M per annum to pay both rent and help pay back the Newham council loan.
Newham withdrew their £40M funding after Spurs, Leyton Orient requested a Judicial review and an anonymous person made a complaint to the European commission saying that Newham's £40M loan amounted to state subsidy which is forbidden within Article 87 of the EC Treaty (as well as Chapter 1 of the Competition Act 1998), which states: 
“any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, insofar as it affects trade between Member States, be incompatible with the common market.” 
It is believed the OLPC, Newham Council and the Mayor of London secretly agreed to call Spurs, Leyton Orient bluff by cancelling the original bid and retaining ownership of the stadium in state hands.
Amusingly this same article 87 may also scupper a £17M loan from the Mayor of London to redevelop White Shite Lane.

Anyone can make an anonymous complaint on-line about proposed state aid. Here is the link if you want you get your own back on Daniel Levy.

Most including the London Mayor Boris Johnson believe  West Ham remain the only viable football tenant for the new tender process. Spurs have almost committed to redevelop White Shite Lane and some still say their OS bid was a big ploy to get their own way with regards to planning permission & government support. Leyton Orient say they would consider a ground share with West Ham or reduce the stadium to 25,000 as originally planned. yea right! dream on Barry. He thought his club would be paid off as part of a bargaining deal.
So under the new tender process West Ham are believed not to be required to contribute £20M and only pay £2M per year as a football tenant.
This has huge potential savings for West Ham in the tens of millions and removes the liability of finding other tenants to fulfil the running costs and find other tenants.

Many of suggested we would no longer have an asset. Well the Boleyn is worth £20M at most and probably a lot less the way land & house prices are going in that part of East London.

I would rather pay £20M off the £75M debt than have the old fashioned view that we must own the deeds. The richest club in world Manchester City do not own their stadium and rent it from the council. If it is OK for them it should be OK for us.

Some have suggested we might only get a short term lease of 5-10 years and Spurs could move in later after 2017. David Gold has dispelled this myth on twitter and claimed we would be looking for a 250 year lease on the stadium to play football.
The only big loser in all of this is the tax payer who will be stuck with the extra re-development costs and potential short fall in running costs.
Well done Levy and Hearn you must be very proud of yourselves!
More can be found out in Newham's FAQ here 

Also below is an interview I did on Sports Tonight LIVE on Tuesday 12th October on the OS Debate

No comments:

Post a Comment