West Ham were today confirmed as the future tenants of the Olympic stadium in a deal which takes the public cost of the venue to at least £600m. Months of wrangling over who will pay to make the arena suitable for football concluded with an agreement that will see the East End club kick off the 2016-17 season in Stratford. Chancellor George Osborne has agreed an extra £25m investment, with a £20m loan from the mayor, bringing the total the cost of adapting the venue after the Games to £160m - the vast majority from the public purse.
West Ham’s owners agreed to meet £15m towards the cost in return for a 99-year lease that will see the Premier League team play in Stratford.
The 80,000-seat venue will be reduced in capacity to 54,000, with temporary seats over the running track to improve spectators’ view, and a new roof. The stadium has proved the most difficult of the Olympic venues to sustain after the Games and mayor Boris Johnson took personal charge by installing himself boss the legacy body.
He said today: “This is a truly momentous milestone for London’s spectacular Olympic stadium ensuring its credible and sustainable future. Through this deal with West Ham United, we are defying the gloomsters who predicted this landmark would become a dusty relic.”
Karren Brady, vice chairman of West Ham, said the club had a “bright future” having swapped their 35,000-seat Upton Park home for Stratford. She said: “It was important to me that we struck a deal that would stand the test of time that represented the right deal for West Ham and our loyal and patient supporters. We will create a stunning new home that befits the pride, passion and tradition that the world associates with West Ham.”
West Ham were selected as “preferred bidder” last year and have been in talks with the freeholders, the mayor’s London Legacy Development Corporation (LLDC) over the club’s contribution to building costs and safeguards for the taxpayer if the owners sell up.
Owners David Gold and David Sullivan have agreed to make an windfall payment to the freeholders if they sell within a decade, although the details remain undisclosed.
West Ham will pay an annual £2m rent and take all receipts from tickets and merchandise, although they will share catering and hospitality revenues with the LLDC. A multi-million pound deal will be struck for the naming rights to the stadium with proceeds going to the legacy body which is confident of charging a premium because of the prestige of the site.
Leyton Orient chairman Barry Hearn is seeking a judicial review of the decision but the LLDC is confident that will not stall the process. It is understood Hearn is contesting the LLDC’s failure to do a joint deal with the Premier League team and Leyton Orient, rather than the decision to place West Ham in the stadium.
West Ham will vacate the Olympic stadium during the summertime when the venue is used for athletics events. Local clubs and schools will have priority use of the stadium and warm-up athletics track in an agreement with Newham council which has a 35 per cent stake in the venue in return for a £40m loan.
Today’s deal raises hopes that the stadium will be ready in time to host several matches as part of 2015 Rugby World cup. Rugby chiefs are expected to confirm next month that Stratford can play host to semi-final games in the autumn of 2015.
Building work will then resume after the rugby and be completed by spring 2016 with an athletics test event staged in the summer just weeks before West Ham kick off the 2016-17 season.
Stratford will play host to the World Athletics Championships in the summer of 2017 which means West Ham are likely to be forced to play away from home at the start of their second season in Stratford.
The mayor came under pressure today to clarify the potential exposure to London council taxpayers. Assembly member Andrew Boff said: “The Mayor must confirm who will be responsible for paying for the costs of converting the stadium to be fit for football. Londoners will want to know how much they will have to cough up, given the vast amounts that the tax payer has already contributed, and also how much West Ham will be contributing.”
The official cost of building the stadium is £429m. Estimates of the cost of conversion range between £160m and £200m. The Government will provide £60m (£35m from the Olympic budget and a further £25m unveiled today), with a £40m loan from Newham and a £20m loan from the LLDC. Legacy sources insist estimates contain a contingency cash which may not be needed.