Olympic Stadium: West Ham United’s takeover collapses

The government has confirmed today that West Ham United's deal to take over the Olympic Stadium after the Olympic Games has collapsed.

Government ministers and the Olympic Park Legacy Company are concerned that legal action by Tottenham Hotspur and Leyton Orient could drag on during which time the stadium would remain empty.

Spurs and Orient are contesting the original decision to award the stadium to West Ham United because of the �40m loan from Newham Council, which they say is 'state aid'.

Spurs are seeking a judicial review of the decision and the next hearing at the High Court is still due to be held next Tuesday.

An anonymous complaint was made to the European Commission last week which could have meant even further delays.

The Stratford stadium will now be leased out to a tenant following a new tender process.

It is understood that the board of the Olympic Park Legacy Company (OPLC) has ended negotiations amid concerns over the delays caused by the ongoing legal dispute The OPLC, government and Mayor of London have instead agreed the stadium will remain in public ownership.

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A new tender process will be opened for a main tenant who will now lease the stadium for an an annual rent.

The winning bidder will rent the stadium rather than purchase it outright and bear the majority of any redevelopment costs. The new tender process will ask interested bidders to submit proposals by January.

A fund of �50m has been set aside from public money to convert the 80,000-capacity stadium at Games time to a 60,000-seater venue afterwards.

The post-Games stadium will be capable of hosting major athletics events and football.

It still means that the Hammers and partners Newham Council could submit a new, lower risk proposal which could still see them move in after London 2012.

It would cost around �2m a year to lease the stadium, contributing to the estimated running costs of more than �5m a year.

Sports minister Hugh Robertson said: 'The government is committed to securing a legacy from the Olympic Stadium, and wants to see it re-opening in 2014.

'The process to sell the stadium has become bogged down. We are acting today to end the legal paralysis that has put that legacy at risk.

'Ending the current sale process and looking for a leasehold solution will remove the current uncertainty and allows us to help secure the future use of the stadium with more confidence.'

Some �35 million already earmarked under the Olympic budget will be used to transform the stadium after the Games. Prospective tenants will then be asked to bid for the stadium, with the running track remaining in place.

Mr Robertson added: 'This is not a white elephant stadium where no one wants it. We have had two big clubs fighting tooth and nail to get it.

'The new process will be more like how Manchester City took over the Commonwealth Games stadium, which is regarded as a leading example of how to do it.'

London Mayor Boris Johnson insisted the stadium would not become a burden to the taxpayer.

He said: 'I am confident that this decision is the best way to ensure we have certainty over the stadium's future.

'I believe it will also put us in the place where we always intended to be - delivering a lasting sustainable legacy for the stadium backed up by a robust but flexible business plan that provides a very good return to the taxpayer.'

Andrew Boff, Olympic spokesman for the Conservative group on the London Assembly, said: 'This catastrophe is entirely down to Sebastian Coe's insistence that the stadium should retain an athletics track after the Olympics.

'That criterion reduced the number of bidders for the site and prevented any serious sustainable regeneration plans, with the exception of that by Spurs, coming forward.

'Conservatives on the London Assembly warned the OPLC that sticking to this demand would threaten the long-term sustainable use of the site.

'Coe's masterplan has turned the Olympic legacy into the Millennium Dome mark two but with a financial climate that gives it a less positive future.

'If the government had insisted that an athletics track had been at the Dome, would it have been rescued by AEG?

'The OPLC, the mayor and the coalition have inherited some deeply-flawed legacy plans from the previous government. They must now put those plans right.

'The government and OPLC must now drop their demand for an athletics track to be part of any future regeneration.'

Dee Doocey, the Liberal Democrat London Assembly Olympic spokeswoman, said there are some difficult questions that need to be answered.

She said: 'How much taxpayers' money have the OPLC spent so far in the tendering process?

'How much taxpayers' money is the new round of negotiations likely to cost?

'What steps have the OPLC taken to ensure that all of their staff and contractors will not be compromised in the next round of bidding?

'Since West Ham's finances under strain, and no other football club is likely to be interested in a stadium which requires them to keep a running track, doesn't this mean that like at all previous Olympics the taxpayer is going to end up picking up the bill for the next 20 years?'

Don't miss our latest edition of London Calling on October 25.