Deal for London stadium falls through

Updated: October 11, 2011, 9:06 AM ET
Associated Press

LONDON -- The future of London's Olympic Stadium will be opened up to a new bidding process after a deal to award the flagship venue to West Ham soccer club was scrapped Tuesday amid "legal paralysis."

The British government was forced to abandon its long-term solution for the $760 million stadium amid concerns the venue could remain empty for years after the 2012 Olympics.

The stadium will remain in public ownership after the 2012 Olympics and be rented out to an anchor tenant, the government said.

West Ham said it will bid again and the new terms will be more financially favorable for the club recently relegated from the Premier League. A $31 million up-front payment will be replaced by smaller annual rent.

London Mayor Boris Johnson said the stadium will "almost certainly" go to West Ham and will definitely retain the running track that losing bidder Tottenham wanted to rip out.

The drawn-out wrangling for control of the stadium has been increasingly acrimonious since West Ham was selected ahead of Tottenham in February as the preferred long-term tenant.

"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," Sports Minister Hugh Robertson said. "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."

Tottenham mounted a full legal challenge against the decision by West Ham's local authority to provide a $63 million loan to fund the second-tier club's move into the stadium. The case was due to be heard in court next week, but appeals could have dragged on for years.

"That could have put at risk the reopening of the stadium in 2014," Robertson said.

Johnson said the move would put an end to "the great deal of legal to-ing and fro-ing" over the stadium, which West Ham wants to downsize from an 80,000 to a 60,000-seat capacity. Some $55 million has already earmarked under the Olympic budget to downsize the stadium.

"We will keep it in public hands," he said. "We will effectively rent it to a football club, almost certainly West Ham, and that will cover the costs. I think it will be a very, very good deal for the taxpayer.

"The crucial thing is it will simultaneously deliver a football solution for the stadium and an athletics legacy at the same time."

John Biggs, a city council member representing the area that hosts the stadium, described the collapse of the deal as "a fiasco and a tremendous waste of public money."

Fourth-tier east London club Leyton Orient also was challenging the decision, while an anonymous complaint to the European Commission about the apparent use of Newham Council funds by West Ham fueled concerns that the legal disputes could drag on for years.

One certainty is that the running track will remain in the stadium regardless of the outcome, with London bidding to host the 2017 world track and field championships.

"It's fantastic for UK Athletics and it is a bold and decisive move by the legacy company," UK Athletics chairman Ed Warner said.

Leyton Orient chairman Barry Hearn confirmed his club would also bid for the stadium, including the possibility of sharing the ground with another club.

"The OPLC have finally listened to someone with common sense and said, 'We messed it up before, let's not mess it up again.' The whole process starts now," Hearn said.


Copyright 2011 by The Associated Press

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