West Ham beat Tottenham to win Olympic Stadium battle
Published 10/02/2011 | 11:33
West Ham United are expected to be recommended as the preferred bidder for the Olympic Stadium on Friday, clearing the way for negotiations that could see the club to move into the arena after the 2012 Games.
The Olympic Park Legacy Company board will meet on Friday morning and sources with knowledge of the process have indicated it will be told that West Ham’s is the only bid that satisfies the criteria laid down by Government.
West Ham have promised to retain the Olympic running track in the stadium after the Games in line with the promises made in London’s bid that the Games would leave an athletics legacy in the capital.
Tottenham’s rival bid is based on ripping out the track and rebuilding a football stadium from scratch on the site while refurbishing the Crystal Palace athletics stadium as an alternative legacy.
It is thought this failure to meet the key legacy commitment of the bid, allied to some concerns over the cost and source of some funding in the Tottenham bid, may have counted against them.
The OPLC chair, Baroness Ford, and chief executive Andrew Altman have spent the past week examining final submissions from both bids and are understood to have reached the conclusion that only West Ham satisfactorily fulfil all the criteria laid down for the decision.
These are: to achieve a viable long-term solution for the Olympic Stadium that is deliverable and provides value for money; to secure a partner with the capability to deliver and operate a legacy solution for a venue of the stadium’s size and complexity.
To reopen the stadium for operational use as rapidly as possible once the 2012 Games have finished; to ensure that the stadium remains a distinctive physical symbol supporting the economic, physical and social regeneration of the surrounding area and to allow flexible usage of the stadium, accommodating a vibrant programme of events that allows year-round access for schools, the local community, the wider public and elite sport.
Concerns over financial aspects of West Ham’s bid have been raised during an increasingly bitter lobbying campaign, but the fact their construction costs are cheaper than Tottenham’s and involve less borrowing may have counted in their favour.
West Ham have said it will cost £95m to convert the stadium for football, including the addition of a permanent roof and facilities including hospitality, toilets and concessions.
Of this around £40m is covered by a loan from their partner Newham Council, borrowing at prudential rates from the Treasury, considered the safest and among the cheapest forms of credit.
A further £35m comes from a “conversion fund” set aside by the Olympic Delivery Authority and available to whichever bid is successful, with the balance ultimately from the sale of Upton Park.
West Ham owners David Gold and David Sullivan have promised to underwrite a bridging facility to allow work to be completed before the club leaves Upton Park. One of the key issues being addressed in the last week was the strength of the financial guarantees from Gold and Sullivan, but they appear to have satisfied the OPLC they are sound.
Tottenham’s plan relies on up to £250m of borrowing, underwritten by the club’s owners ENIC, a company controlled by currency billionaire Joe Lewis, and their partner in the stadium project AEG. The borrowing is thought to be covered by bank covenants some of which are understood to lie offshore.
On Wednesday night, a spokeswoman for the OPLC confirmed that a board meeting would be held on Friday but declined to comment on the recommendation that will be made.
If West Ham’s selection as preferred bidder is ratified by the 14-member OPLC board it will then pass to London mayor Boris Johnson and government ministers Jeremy Hunt and Eric Pickles for ratification.
Given the government has repeatedly restated its commitment to the Olympic project and the legacy commitments made in Singapore, it would be surprising were they to go against the recommendation of the OPLC.
Opinion polls have also shown overwhelming public support for retaining the track within the stadium, a factor likely to influence the political decision-makers.
Assuming there was no objection from the mayor or ministers West Ham would enter a period of exclusive negotiation with the OPLC during which the details of their lease and the final financial terms of the deal will be settled.
There remains the possibility that West Ham will fail to complete negotiations and the OPLC may then return to Tottenham.
If West Ham are selected it will satisfy the large and vocal Olympic and athletics lobby that has campaigned hard for the East London club to be selected.
Tottenham are unlikely to take rejection lying down, however, and have already indicated that they will consider judicial review of the decision if it goes against them.
They have argued consistently that only their bid would provide a secure financial legacy for the Olympic Park because of the security that a football-only stadium can provide.
On Wednesday, Tim Leiweke, president and chief executive of AEG, predicted that the Olympic stadium will be “bust in 10 years” if West Ham try and combine football with a running track.