Bright new future beckons for West Ham
LONDON 2012 STADIUM LEGACY: West Ham have taken a key step towards relocating to the Olympic Stadium after they were named the highest ranked bidder for the £429million (€528m) venue.
Following a board meeting, the London Legacy Development Corporation announced that the club was its first choice to be the stadium’s main tenant, with a 99-year lease, but concluding a binding deal will require further negotiation.
London mayor and LLDC chair, Boris Johnson, said he was “very pleased” with the agreement, but added that a future without football remains viable if a final deal cannot be concluded with West Ham.
“If it goes through there will be a football legacy for the stadium, but it still needs to be sorted out,” said Johnson. “There are negotiations to go on between the LLDC and West Ham United about the exact terms of the deal.
“If we can’t do a deal that protects taxpayer value, that protects the £9.3billion (€11.4bn) of Olympic investment and the £500 million (€615m) spent building the stadium alone, that’s fine and we’ll go on and the stadium will have a fantastic future in any event.”
He insisted that “plan B” – reopening the stadium more rapidly and cheaply as a venue for concerts and one-off sporting events without the involvement of West Ham – remained viable.
“We have got plenty of time to get a football solution, if this is what we get, in time for 2016-17,” said Johnson. “People will understand my job is to get the best possible deal for the taxpayer. I can see a great future for the stadium with or without association football.”
If the West Ham deal goes ahead, the majority of the £160m-plus (€196m) conversion cost of making the stadium suitable for both football and athletics will be met by the public purse. Newham council will contribute a loan of up to £70m (€86.1m) and £38m (€46.75m) will come from the existing Olympics budget.
West Ham have offered to contribute £15m (€18.5m) but believe that their contribution of £2.5m (€3.07m) a year in rent and a claimed £6m (€7.4m) additional sponsorship and catering income will ensure the conversion work to install a full roof and retractable seats pays for itself.
How the conversion is to be paid for and the terms of the deal will now be subject to further negotiation before final contracts can be signed.
An investment bank is likely to be engaged to help structure the deal in such a way that the public purse shares in any potential upside for West Ham, should the move result in a large boost in revenues or a windfall in the event the club was sold. For their part, West Ham believe that not only do they offer the most viable economic solution to the long running conundrum over what to do with the stadium, but that their presence will give the park a vitality and energy that it would otherwise lack.
West Ham’s vice-chair, Karren Brady, said: “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.
“Our vision for the stadium has always been about standing up for the promises made for London back in Singapore in 2005. We are committed to delivering our promises as set out in our bid. The hard work really does start here and work is already well under way to ensure that we really bring our community, which includes 500,000 supporters in east London and Essex alone, with us.”
UK Athletics will be guaranteed around 20 dates a year in the new stadium and plan to use it for Diamond League meetings as well as for smaller events and the 2017 World Athletics Championships.
It will also be used to host concerts and other one-off sporting events. If the West Ham deal is finalised the club will sell Upton Park to developers and use the proceeds to help pay down the debt on their balance sheet – they will not be able to carry the debt with them as they will no longer have an asset on which to secure it.