West Ham Stadium Deal Collapse to Cost Taxpayers Millions


Tax-payers will now find themselves paying a multi-million pound bill, as West Ham’s plans to buy the Olympic Stadium in Stratford have fallen through.

West Ham were in line to purchase the stadium after the 2012 Games, with the support of a £40 million fund from Newham Council. However, rival bidders Tottenham Hotspur argued that the fund was an ‘unfair advantage’ and claimed that West Ham were receiving ‘illegal state aid’, sparking a legal battle between the two teams.  Challenges from Leyton Orient football club and an anonymous complaint to the European Commission also created a great deal of uncertainty around the deal. As a result Newham Council has now said they no longer want to proceed.

‘…the Olympic Park Legacy Company (OPLC) received a letter from Newham Council yesterday saying because of the uncertainty that they no longer wanted to proceed’

The stadium is now to be state-owned instead and will be rented out to football clubs, rather that sold. Boris Johnson and ministers are claiming that this is the best solution, with the greatest long-term results for taxpayers:

”…We’ve come up with a very good solution to keep it in public hands and rent it to football clubs… that will be a very good deal”

Yet, taxpayers will now have to meet the contribution that would have be made by West Ham and Newham Council towards the conversion of the stadium, resulting in a multi-million pound bill. They may also find themselves paying for any annual losses that the stadium makes – a fate that has been met at previous Olympic sites.

Some experts say it will turn out to be the most expensive venue of its kind in the world- more debt Legacy.

The Olympic Park Legacy Company will now have to begin looking for a new tenant to rent the stadium. It has been confirmed that West Ham will be bidding again, but it is yet to be made clear whether renting the stadium will turn out to be a better deal for the East London football team.

 

 

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Spurs and Leyton Orient to launch review over Olympic Stadium


Tottenham Hotspur and Leyton Orient are applying to the high court for a review of the OPLC’s (Olympic Park Legacy Company) decision to award West Ham United the chance to move into the Olympic stadium after the 2012 Olympic games.  One of the reasons for OPLC’s decison to pick West Ham was that they had said in their bid for the stadium, that they would keep the athletics track, whilst Spurs had argued the only viable option was to rebuild the entire stadium as a dedicated football ground.

Leyton Orient’s chairman said. ‘We will shortly apply to the High Court for judicial review and take action against the Premier League for ignoring their own rules.’

A big concern for Leyton Orient is that because of the size of the stadium, West Ham plans to offer discounted tickets. The worry is that this could significantly effect Orients ability to generate ticket revenue since the clubs current home is the Matchroom Stadium just over 2 miles from Stratford. The club’s fan groups have launched an online petition urging the Government to revoke the decision. Orient have also accused Newham council of granting “unlawful state aid” to West Ham in offering them a £40m to finance their move into the Olympic stadium after the games.

What are they doing lending £40m to a football club? They are not allowed to be involved in commercial deals. This is state subsidy of a commercial operation, which falls foul of European competition laws.‘ Barry Hearn (Orients chairman) said. ‘We are asking them to withdraw it. It is state aid and they don’t have the authority to make this kind of commercial investment under their charter.’

This another incident linked to the Olympics where there is no accountability.  It seems that although the decision to award West Ham the loan is technically illegal, it is allowed to happen because of its connection to the Olympic games. Should allowances such as this be made just because of its links to a major event ? It seems unlikely that West Ham will be able to pay back such a huge loan given football isn’t renowned for financial sustainability and it will be the Newham taxpayers who will be liable for the debt in the event of default.

In January, BBC London found a number of potential ‘abuses’  during the process leading up to the loan. These included:

  • Crucial documents explaining the bid in detail being withheld from councillors until shortly before the vote
  • No explanation as to whether the council would be liable for the debt if relegation-threatened West Ham defaulted
  • A ‘significant number’ of councillors holding reservations – but refusing to speak openly because they are allegedly “afraid” of missing out on lucrative positions
  • Mayor of Newham Sir Robin Wales declaring dozens of gifts from West Ham, with critics saying his impartiality has been compromised

For more information click BBC News

Spurs also intend to take the OPLC to court over a number of concerns they have about the process which led to the decision to give West Ham the £537 million stadium. They released a statement saying that,

‘Our lawyers have written to the OPLC, the Mayor of London, the Minister of Sport and the Secretary of State for Local Government and a separate letter to the London Borough of Newham raising a number of concerns with the processes which led to the award.’

‘The letters also requested – in the interests of transparency – for the provision of certain information concerning the processes, which the Club considers that it is entitled to. Tottenham Hotspur will determine its next step as and when it receives a response to these letters.’

Tottenham also plan to challenge the £40m loan which West Ham will be given at preferential rates that was not been offered to any other bidders for the stadium believed that this will form a key argument  for Spurs’ claims against the decision.

Tottenham said that they have now ‘sought permission from the High Court to bring a claim against the London Borough of Newham (“Newham”) for judicial review of Newham’s process in providing a loan for the conversion of the Olympic Stadium after the 2012 Games.’

A spokesperson from the OPLC stated that, ‘We have been consistent, fair, objective and entirely equal in our dealings with the bidders from start to finish. We are confident that if these judicial review proceedings are pursued, our approach will be entirely vindicated by the courts.’

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Park to be tarmaced for Olympics

Drapers Field, a park in Leyton that consists of all-weather football pitches, playing fields and an arts centre, is to be tarmaced over to serve as a storage depot for the London Olympics. While Waltham Forest council admitted that this would be a significant loss to the community – the park is used by around 100,000 people every year, including the Norlington School for Boys as well as 23 clubs – it still went ahead with the proposal, in the hope that the community will be granted substantial compensation.

Hackney Marshes – one of several parks to be redeveloped for Olympic facilities

This decision has caused uproar with local people because of the glaring contradiction of trying to promote sport as a co-operative, public activity whilst reducing opportunities for actively participating in sport. It also seems to be nonsensical to turn a park into a depot, search for alternative sites for sports activities and then restore the original site after 2012, when all the council or the ODA (Olympic Delivery Authority) would have to do is find an already existing depot in the area. These admittedly are of course hard to find in East London.

This is not the first requisition of public green space in the interest of the upcoming mega-event; a substantial chunk of Hackney Marshes has already been pocketed for the development of a VIP coach park.

This must also be frustrating for residents in a location where local sport – particularly in the shape of Leyton Orient FC who make use of the amenities – plays a positive role in the community. In the meantime, Norlington School for Boys face an uphill struggle to find fields for activities, and most likely a further dip into the school budget.

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