January 2012 Archives

The Government has hit back at Sky News' claim that the "real cost" of the Olympics will be £12bn.

As I understand it, government chiefs spent the last week arguing Sky down from a story they initially planned to run saying it would cost more than £20bn.

In essence, the government's argument is that it is a bit disingenuous to add many of the things that Sky have added to the bill - things the Government have argued would happen anyway.

And you can see their point. Just because a council or any other body says they will carry out a piece of work in time for the Olympics, doesn't necessarily make it an Olympic cost.

For instance, Sky's original take on the situation would have included £6.5bn of transport improvements which it said have been brought forward due to the Olympics and can't now be cancelled as part of Government cuts.

The government's take is something along the lines that the work would have been carried out regardless of the Olympics.

It argues that perhaps, if anything, having the deadline of the Games hanging over the country has sharpened the focus to get the job done.

According to the department for culture, media and sport, the public sector budget for the Games is £9.3bn and that currently there is more than £500m of that money sitting in a contingency pot.

Around £7bn of the money that has been spent has gone into regenerating East London, what was previously one of Europe's poorest areas.

Around 75p in every pound spent on the Olympic Park can directly be described as regeneration spend  for East London - money that almost certainly would never have been spent so quickly without the Olympics as a catalyst.

Football may now play no role in the legacy of the Olympic stadium, it has emerged.

A report today in the Evening Standard suggests West Ham United may scrap its plans for a move to the stadium after the 2012 Olympics.

Almost a year ago, at the beginning of February 2011 The Hammers were chosen ahead of Tottenham Hotspur in a competitive bidding process to takeover the £486m stadium.

But that deal fell through due to the threat of legal action and a new competitive bidding process was launched to find a long term tenant for the stadium.

Spurs immediately ruled themselves out of the race, stating they were only interested in the stadium if they could own it outright.

West Ham quickly became the favourites in the race to lease the stadium.

However, todays reports suggest West Ham's interest has waned and that the club is reluctant to spend more money on another bid without greater certainty.

The club is reported to have spent nearly £1m on the first bidding process which collapsed in October following an anonymous complaint that a £40m loan to West Ham from Newham council constituted illegal state aid.

West Ham are also not keen to start the process of selling Upton Park, valued at £66.3m in the latest accounts, unless the Olympic stadium will be their new home.

Interestingly, in a video interview with Estates Gazette last week, see below, Olympic Park Legacy Company chief executive Andrew Altman was clear to state that football was not the only option for the stadium.

He added that the OPLC was called for parties to register their interest by the end of the month. Formal bids will then be invited up to March and a decision will be made by May.

Andrew Altman will become boss of the new Mayoral Development Corporation as the implications of the transformation from the Olympic Park Legacy Company begin to take shape.

The London Assembly's unanimous vote in favour of the MDC was somewhat overshadowed last week by the shortlist for a long term occupier for the media centre.

To some extent the implications of the new MDC have been overlooked.

The Mayor of London Boris Johnson has previously stated that the existing OPLC will form the core of the Corporation with all "properties, rights and liabilities" transferring across.

These property, rights and liabilities, I understand, include all staff as well as the existing OPLC chief executive Altman, who will head up the new larger MDC.

The Olympic Delivery Authority's planning decisions team is also expected to transfer over to the OPLC on Oct 1.

Yesterday it was announced that consultation has opened on the London Thames Gateway Development Corporation's transfer of £34m of its assets to the MDC.

All LTGDC projects outside the MDC area will transfer to the Greater London Authority.

Three consortia are vying for gold, silver and bronze in the race to occupy the 1m sq ft 2012 Olympic Media Centre.

The Olympic Park Legacy Company today unveiled its final three bidders to be the long term tenant of the media centre - more about each of which is written below.

The media centre holds the key to the success of the economic legacy of the Olympic Park.

The stated aim of the OPLC, Mayor of London Boris Johnson, UK Government and Mayor of Hackney Jules Pipe is to see it create thousands of "high quality" jobs.

Importantly there is also a strong political will to see the media centre form the outer perimeter of a new silicon valley running from Shoreditch to the Olympic Park.

The shortlisted bids are:

• UK Fashion Hub - a dedicated centre that will unite the fashion and textile manufacturing sectors, creating a world-class destination for wholesalers, buyers and the creative industries. Headed by Resolution Property and anchored by Brandboxx and Workspace Group, the bid involves the broadcast centre becoming a fashion centre with offices, an incubator, manufacturing and creative uses. The press centre would become a fashion college, a fashion e-tailing centre and a media centre.

• Oxylane Group - a sports orientated mixed-use offer in partnership with Loughborough University. The broadcast centre would become 'Oxylane Village' offering leisure, events space, research and education and retail including a major Decathlon store. The press centre would be used as office space and a technology centre.

• iCITY - an 'Innovation City' anchored by Infinity with the broadcast centre accommodating a cloud computing centre, research labs, post production, graphic designers and digital education. The press centre would become an innovation and research centre with links to higher education that would showcase British technology.

With a fashion wholesaling centre, fashion college and e-tailing centre, the Fashion Hub bid appears to tick the boxes of job creation with a technological feel.

Oxylane's suggestion of a technology centre in the press centre will get big thumbs up.

But it's the bid from Infinity, which is backed by Lord Rothschild's Rothschild Investment Trust, that may prove most seductive.

The Financial Times is reporting that the bid comes with £500m investment in a technology and research centre.

More gold for Lord Rothschild perhaps...

A 30-tonne piece of artwork being installed in the Olympic Park provides good advice for the athletes at this Summers Olympics, as the images below show.

The RUN artwork is the largest standalone piece to be installed in the Park. It will be situated on the plaza of the 6,500-capacity Copper Box - the new name for the Handball Arena.

It has been created by artist Monica Bonvicini who says it is a cultural reflection of popular music titles, including The Velvet Underground's Run Run Run, Neil Young's Running Dry and Bruce Springsteen's Born to Run.

The nine-metre tall letters each weigh 10 tonnes and are constructed from steel and reflective glass - producing a mirrored effect during the day and a glow at night through the use of LED lighting that will reflect off a series of internal curved mirrors.

It will take around six weeks to fit all the components to the letters, including the glass and 305 metres of energy efficient LED lighting.

Bonvicini said: "RUN will blend in perfectly in the landscape, avoiding monumentality through the mirroring of the surroundings. At night the psychedelic light reflections will illuminate it in a vigorous, elegant and witty way, reflecting the great liveliness of London."

Phew... glad that monumentality has been avoided.

The BBC is running a piece today about a backlash from residents in Stratford against University College London's plans for a new campus on the Carpenters Estate

The video piece includes interviews with several Carpenters residents who make it clear in no uncertain terms that they do not want to be moved on.

A six-month agreement was signed between Newham council and UCL in November earmarking the Greater Carpenters neighbourhood to the east of the Queen Elizabeth Olympic Park for a 20-acre campus.

It would be in addition to UCL's existing campus in Bloomsbury, WC1.

There is no obligation from either Newham council or UCL to proceed with the plans after the six-month period ends.

But the Mayor of Newham Sir Robin Wales says the plans have the potential to transform the lives of local children.

The BBC article says Newham will give money to residents to take their Carpenters properties off their hands as well as offering loans to help buy new ones elsewhere.

Drivers Jonas Deloitte is advising UCL.

Jones Lang LaSalle's annual predictions event this morning has forecast that the 2012 Olympics will have a more pronounced economic impact on London than previously expected.

JLL director Katie Kopec said that the economic benefits can be significant with Barcelona's GDP growing by 2.9% following the 1992 Olympics and Sydney 2000 providing the Australian city with a 2.1% GDP rise.

But as recently as four years ago Kopec said she would have had no hesitation in saying the impact on London would be minimal with the size and maturity of the capital's property market "absorbing the event".

However, can the same be said today?

"Indeed we would hazard a guess that the overall impact will be greater and the relative impact more pronounced," argued Kopec.

Her reason is due to UK-wide growth predictions being downgraded at the Autumn Review in October coupled with the ability of an event like the Olympics to place a global spotlight on London and UK PLC.

During Sydney 2000 it was estimated 3.7 billion of the world's then 6.6 billion population tuned in at some point during the Games.

It is forecast that 98% of the world's population with access to media will tune into the event at some point next year.

Overseas money has already been attracted to East London through the likes of the Athletes Village deal - sold to Delancey and Middle Eastern investor Qatari Diar for £557m.

Kopec says that the 2012 Olympic Games can be a more significant catalyst for regeneration in East London compared with any previous Games.

She says that with the exception of the DLR extensions and East London Line upgrades all the infrastructure was there to help support the transformation of the area.

Stratford was already a well connected location accessible to 75% of London's major hubs within 25 minutes and 7 minutes to Kings Cross.

"All very impressive when considering the potential capacity to expand," she said.

"And that is without bringing the bus, road and very importantly, air links, into consideration."

Kopec added that the Olympic Park will change the perception of East London, establishing it as an attractive family housing location.

But she concludes that bringing in social infrastructure will be key to the success of the area in the future.

To support the family housing, she says the area will need a supply of new schools, health and leisure facilities.