Olympic Stadium Deal Collapses

West Ham United’s bid to occupy London’s Olympic Stadium after the 2012 Games has been derailed because of legal action from rival soccer clubs and an anonymous complaint to the European Commission.

The government confirmed the deal has collapsed and the Department for Culture, Media and Sport was expected to make a formal statement Oct. 11.

Ministers are concerned that legal action by London soccer clubs Tottenham Hotspur and Leyton Orient, which both failed with their bids to occupy the new stadium, could drag on for years.

In the meantime, the stadium would have to remain empty, thereby jeopardising the English capital’s chances of hosting the 2017 World Athletics Championships.

The east London stadium will now remain in public ownership and be leased out to a tenant following a new tender process, which will stipulate that whoever eventually occupies the building must keep the athletics track in place.

Tottenham’s bid for the stadium included removing the running track, while West Ham elected to keep it and allow the venue to remain central to London’s bid for the 2017 World Athletics Championships.

Tottenham is already in talks with the government aimed at getting the club to commit to building a new stadium next to its current home at White Hart Lane.

London Mayor Boris Johnson was so intent on Spurs remaining in north London that he was said to have offered a £17 million sweetener for the club to abandon its legal action over the Olympic venue and remain in Haringey.

Spurs are balking at the cost of preserving protected buildings near to their current home and the amount the club is expected to contribute to upgrading the local tube and overground railway stations if ground capacity was to increase from 33,000 to 60,000-plus.

Apart from the ongoing legal wrangle, which focuses on how the original bidding process was conducted, Tottenham chairman Daniel Levy has suggested the £40 million that Newham Council was prepared to lend to the West Ham bid constitutes “state aid.”

Tottenham says that means the loan breaches European laws barring state aid for private companies.

The final blow appears to have come when the European Commission, which oversees such laws, received an anonymous complaint to this effect, prompting the Newham authority to withdraw its support.

“The key point of the action we have taken today is about removing the uncertainty. The process had become bogged down in legal paralysis,” explained sports minister Hugh Robertson.

“Particularly relevant has been the anonymous complaint to the EC over ‘state aid’ and the Olympic Park Legacy Company receiving a letter from Newham Council saying – because of the uncertainty – they no longer wanted to proceed.

“That was the straw that broke the camel’s back and we thought it better to stop it dead in its tracks now,” he said.

West Ham wanted to convert the £537 million stadium into a 60,000-capacity venue for football, athletics, and concerts, which would have been run by Live Nation.

However, the club may well experience financial problems following its relegation from the Premier League. Levy has suggested the club’s bid isn’t financially sustainable.

Under the reopened bidding process, the cost of transforming the building after the games will be met by the Olympic Park Legacy Company (OPLC), which could make it a better deal for the Hammers.

The £35 million conversion cost will now come out of public money, while the new tenant will be pay about £2 million per year.

The move has been welcomed by West Ham vice chairman Karren Brady and the London Borough of Newham.

They released a joint statement saying, “Uncertainty caused by the anonymous complaint to the European Commission and ongoing legal challenges have put the Olympic legacy at risk and certainly a stadium, as we envisioned it, may not be in place by 2014 due as a direct result of the legal delay.

“Therefore we would welcome a move by OPLC and government to end that uncertainty and allow a football and athletics stadium to be in place by 2014 under a new process.

“If the speculation is true, West Ham will look to become a tenant of the stadium while Newham will aim to help deliver the legacy.”