Khan Announces Deal To Take Control Of London Stadium
The Mayor of London, Sadiq Khan, has announced a deal to take control over the London Stadium, following an independent review that revealed significant losses.
The stadium, built for the London 2012 Olympic Games, is now home to West Ham United football club. The club pay £2.5m in rent, with costs to convert the arena to a football stadium coming to more than £323m – far beyond the original estimate of £190m.
Projected loses for the stadium, which also hosts athletics events and concerts, stand at £24m for the 2017/18 season, while E20 – the public sector company set up to run the London Stadium – is projected to make a loss of £20m next year and a total loss of £140m over its first 10 years.
The report found that the costs were “in excess of £10m per annum, which is over 300 times greater than the figure budgeted (£300k). This cost is not just limited to one year, but is an ongoing issue as the movements of seats is required every year.”
Khan said: “Not for the first time, it reveals a bungled decision-making process that has the previous Mayor’s fingerprints all over it.
“Boris Johnson clearly panicked when faced with legal challenges about West Ham and Newham’s joint bid to take ownership of the Stadium and then decided to re-run the bid process with the taxpayer taking all the risks and footing almost the whole bill. You simply couldn’t make it up.
“The fact he also failed to properly examine the transformation costs or the entirely inadequate estimates for moving the retractable seats leaves us squarely in the dire financial situation we are in.”
The report also puts blame on the decision not to take the option from the outset to build the stadium with the capability to host Premier League football once London 2012 had finished. This option was rejected at the time to keep the ‘Olympic Legacy’ of the stadium.
The report added: “Alternatives and optionality can be retro-fitted at reasonable cost if built in to some degree to original designs.
“To do so is usually far less expensive than seeking to retro-fit and, as is the case here, sometimes retrofitting proves extremely difficult; in this case necessitating large scale rebuilding of the Stadium.
“It would have been better to spend money at the outset of the Stadium and in its construction design and build to facilitate greater optionality
“In reality only a Premier League football club could occupy and commercially operate a stadium of the scale of the Olympic Stadium.
“Because demolition or deconstruction was likely to be very unpopular and was unlikely to fulfil commercial or legacy objectives, occupation by a Premier League football club should have been accepted, irrespective of any objections as to sports legacy and then the necessary sports legacy accommodated.”
Image: ©Getty Images
