The cost of shunning Premier League duo
One of the questions which keeps coming up in the debate over the future use of the Olympic Stadium is, why did organisers decide back in 2006 and early 2007 to rule out a design which could have accommodated Premier League football?
Instead of building the £500m stadium only to reduce it from 80,000 seats to a 25,000 capacity athletics arena, why didn't designers come up with a plan that would have kept big football and the track and field community happy?
If they had done so, the Olympic Delivery Authority (ODA) would have avoided the difficult dilemma it faces of choosing between two bids essentially from Premier League clubs.
As we know West Ham are prepared to retain the running track which is such an emotive and fundamental part of the promises made by London's winning bid team back in 2005.
But Tottenham want to knock the majority of the stadium down and rebuild it as a football only ground while relocating an athletics legacy to a spruced up Crystal Palace.
Today both bidders will send in clarifications to the Olympic Park Legacy Company (OPLC), the body charged with the task of choosing between these two bids. A decision on a preferred bidder is likely by the end of next week.Had Premier League football been factored in from the start then the OPLC's choice might have been an easier one. As it is, the idea of designing a stadium with retractable seating which could have factored in athletics and football or one which could have been easily adapted like the City of Manchester Stadium was rejected very early on in the process and not long after London had won the bid.
It has already been reported elsewhere that earlier interest from West Ham back in December 2006 and January 2007 was rebuffed by the Olympic board because a strategic decision had been taken by the ODA and its designers to rule out a Premier League option.
Despite an offer from West Ham, outlined in two letters to the ODA in December 2006 and January 2007, to pay £100m towards the extra costs created by a redesign, the ODA ploughed on with the reduced capacity athletics option.
I have now received information which sheds new light on why this happened.
Spurs and West Ham are hoping all roads lead to the Olympic Stadium. Photo: Getty
As far back as the July 2006 Olympic Board meeting, the decision was taken to go for the so-called "base case" with athletics. This was reiterated at another meeting of the Olympic Board in November 2006.
Why was the then Mayor of London Ken Livingstone and former Olympics Minister Tessa Jowell so determined to ignore the possibility of a big Premier League team moving in after the Games?
According to one source I have spoken to, the Government commissioned a report by consultants KPMG to examine the legacy options for the stadium. This included KPMG testing the market for interest from a Premier League club.
There was interest from West Ham but by July 2006 the ODA received no formal tenders from any clubs.
But with the clock ticking down, the ODA felt under pressure to start the procurement process for the stadium. They were anxious not to have a repeat of the Wembley Stadium fiasco which came in late and over budget and with an immovable completion deadline of one year before the Games, the Mayor, the Government and the ODA didn't want to take any risks.
The ODA went ahead with the procurement process choosing Team McAlpine and designs for the 80,000 to 25,000 stadium were drawn up by architects.
What potentially changed the situation was the Icelandic takeover by Bjorgolfur Gudmundsson and Eggert Magnusson in the autumn of 2006. The former chairman of the ODA Sir Roy McNulty received a short letter from West Ham on 4 December which outlined their interest but set out a number of conditions. These included:
* Being granted the freehold for the stadium
* Becoming the sole operator
* A retractable seating design
* A 500-space car park
These were reiterated in a more formal offer letter from West Ham's financial director Nick Igoe on 17 January 2007.
But for a third time the Premier League football option was rejected by the Olympic Board at a meeting in February.
Ministers, the Mayor of London and the ODA decided that after six months work the designs were too far down the line to reverse them without jeopardising the timetable for the stadium's delivery.
The source adds that reconfiguring the stadium with retractable seating would have meant submitting a complete redesign which involved moving and reconfiguring stands, starting a new tender process (as a public asset the ODA couldn't just hand the stadium to one bidder without going out to market again) and submitting a new planning application.
That would have had an impact on costs which West Ham's £100m offer may not have covered and potentially caused serious delays.
There was also opposition from developers Westfield, building the new Stratford City shopping complex and the entrance to the Olympic Park. Negotiations with the ODA and landowners were at a delicate stage and they, at that stage, were against a Premier League club moving into the stadium. It is ironic that Westfield are now working with West Ham and Newham Council on their bid.
The other factor to consider is that the ODA had commissioned in September 2006 another group of consultants, PMP, to examine the legacy plans for the stadium and the rest of the park following the work done by KPMG.
They were hired to look at all the options for the stadium except, once again, a combination of Premier League football and athletics, rugby union and rugby league and lower league football were considered.
PMP looked at the finances of the stadium over a five year period following the Games and estimated what the different configurations might cost. Among their findings PMP concluded:
* That an athletics only stadium would need a public subsidy of approximately £1m a year.
* That a combination of athletics and lower league football would only need a subsidy of £1m to £1.5m over five years (£200,000 to £300,000 a year).
Since then estimates for the public subsidy have soared to £5m-£10m a year depending who you believe but at the time, the ODA argued that a £10m subsidy guaranteed by the London Mayor would more than cover the £1m annual cost of running the athletics only legacy.
The PMP report was completed by January 2007 - exactly the same time West Ham were making their offer.
Since then, of course, the OPLC has been brought in to re-think the legacy plans for the stadium and reach out to Premier League football.
And while few expect the OPLC to stick with the original plan chosen back in 2007, a look back at the reasons for that decision do pose another interesting question.
Would the public be prepared to pay for a stadium which shuns Premier League football again and sticks to the legacy promise to athletics made in Singapore six years ago?