West Ham get Olympic Stadium after government ups funding
West Ham will be anchor tenants for the Olympic Stadium after the government agreed to put in an extra £25m towards the costs of converting the venue.
The additional money takes the Treasury's contribution to around £60m.
Adapting the stadium could cost between £150m and £190m.
But the deal was secured only after West Ham agreed to increase their own funding of the project by £5m, to £15m. They will move in from August 2016 and pay around £2m a year rent.
David Gold West Ham co-owner, speaking on 4 March
“We will only go there if it is fit for use. I won't go there if I have to look over a running track. But I believe we are in a once-in-a-lifetime opportunity. Let's face it - they've built a stadium, albeit the wrong shape and size”
Under conversion plans, the roof will be extended and the seating capacity reduced from 80,000 to 60,000, with a retractable system allowing the venue to be converted from an athletics arena to football stadium within days.
Seats will slide over the running track to bring West Ham fans closer to the action.
The London Legacy Development Corporation (LLDC) will begin work on the roof in the autumn and officials hope it will be ready for the autumn of 2015 - in time for the Rugby World Cup.
After that the stadium will close again to reconfigure the stadium's lower seating bowl and re-open in time for West Ham to start playing their games there in August 2016.
Although West Ham were appointed preferred bidders by the LLDC three months ago, there were still fears the agreement could collapse over how to finance the transformation of the stadium.
Initially the club had been reluctant to pay anything, but over time they increased their contribution to £10m and are now prepared to pay £15m.
The rest of the money will be drawn from a range of sources, including London Mayor Boris Johnson's budget, a £40m loan from Newham Council and around £20m of borrowings by the LLDC.
To guarantee the 99-year lease, West Ham also had to agree to pay a proportion of any future sale of the club back to the LLDC.
Johnson argued that the move into the stadium significantly enhanced West Ham's value and that the public purse should share in any profits generated from a sale by owners David Gold and David Sullivan.
In response, West Ham have agreed to pay a one-off windfall back to the LLDC if they sell the club in the next 10 years. West Ham say that is a sign of Gold and Sullivan's long-term commitment to the club.
The deal will be a huge relief to the mayor and the government, who feared the stadium could become a major drain on taxpayers.
Breakdown of conversion funding
Government: Around £60m
Loan from Newham Council: £40m
LLDC loan: £20m
West Ham: £15m
There will also be funding from London Mayor Boris Johnson's budget
As well as £2m-a-year in rent, the club will share catering and hospitality revenue with LLDC but it is understood West Ham will take all ticket and merchandising income.
Leyton Orient chairman Barry Hearn is seeking a judicial review of the decision but the LLDC is confident that will not stall the process.
Sources insist Hearn is contesting the LLDC's failure to do a joint deal with the Premier League team and Leyton Orient, rather than the decision to place West Ham in the stadium.
The LLDC and West Ham will now work together to sell the naming rights for the stadium to a major sponsor.
Initial talks with the International Olympic Committee and the British Olympic Association have begun on whether they can use the word "Olympic" in any future naming of the venue.
This is thought to be extremely unlikely unless the sponsor of the stadium is also one of the Olympic movement's big commercial partners.