London: Olympic Stadium to cost even £200m more?!

source: Guardian.co.uk

London: Olympic Stadium to cost even £200m more?! West Ham’s tenancy offer raises more doubts after it came out the real cost of Olympic Stadium might get close to £700m with football conversion included. Is a multi-sport vision more viable?

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2012 Olympics are memories now, but one thing hasn’t changed – no-one knows what will happen to the Olympic Stadium. The 80,000-seat venue is becoming victim of its vision – a stadium more sustainable and better planned than other Olympic venues that become ‘white elephants’.

So far it is nothing but a white elephant with no decision over the future being made yet. One thing that seems out of the question is following the initial scheme of decreasing capacity to 25,000 and making it centerpiece of British athletics.

Still favourite is West Ham’s bid, filed again in a newer, updated version last Friday. The offer for 99-year tenancy of the venue suggests annual income for the London Legacy Development Company at some £8.5 million (£2.5m rent and £6m from catering and naming rights). But this vision also comes at a price. Sources suggest that LLDC would have to pay £2.5m per year as contribution to event organizing. This decreases revenues, but isn’t the worst part.

Conversion to football mode is likely to cost even £200 million (€250m), a massive increase and addition to the overall bill of £486m (€605m) spent so far. If that is the case, Olympic Stadium would be more expensive than any stadium of its size (at 60,000 with football capacity) and throughout Europe matching only Wembley and the Zenit Arena in Russia. Both of the mentioned venues received immense criticism over cost overruns, though.

Why the £200m? Initially it was though that conversion (retractable seating, cantilever roof covering all fans, permanent corporate facilities) might cost £100-120m, but these figures are outdated as Guardian suggests even £160m may prove far below the final price tag with no tender or detailed cost examination are ready.  

This may be the reason for lack of final decision so far. Sources indicate some LLDC board members would prefer to leave the venue with few changes to its current structure and with an operator managing it without permanent football tenants. This would save a lot on conversion costs, though financial risk with hosting large events would increase significantly.

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