The Olympic Delivery Authority is edging towards a Lend Lease-style Olympic Village arrangement to ensure the credit crisis does not hold up development of the £400m 2012 Olympics media centre.
Preferred development partner Carillion/Igloo had been expected to contribute up to half the cost of the venue in exchange for a share of the rental income after the Games.
But EG understands that difficulties raising bank finance for development have led negotiations to focus on using principally public-sector money to bankroll the scheme.
Construction group Carillion and Morley-backed regeneration fund Igloo will buy the centre, post-Games.
The London Development Agency’s formal sign-off of the development agreement is said to be close, but relies on an agreement on the end-value of the site (see below).
Progress comes as Lend Lease’s problems securing bank financing continue to hold back a development agreement at the Olympic Village site.
Sliding residential values are holding up a final agreement with Lend Lease. The ODA has also had to accept that it must bear the brunt of the development costs at the village.
An insider said the media centre deal will be easier to negotiate: “Unlike with the Olympic Village, the media centre was never a residential scheme, and the values for the uses proposed for it post-Games have not radically altered in recent months.”
The LDA and the ODA both refused to comment on details, but said an agreement was close.
Site value complicates finance
Negotiations on the value of the media centre have been complicated by uncertainty about its use post-Games.
The partners – Carillion/Igloo, the Olympic Development Authority and the London Development Agency – have been working up designs that can be adapted to a variety of uses.
However, EG has learned that the centre, designed by Allies & Morrison and EDAW, will now comprise eight digital media studios totalling 700,000 sq ft, alongside 500,000 sq ft of offices for use after the Olympics.
The partners have earmarked digital broadcasting media firms, such as the BBC, ITV and Sky, as potential tenants.
As a fallback, however, the centre could be adapted for distribution and office uses.
The final agreement will allow the ODA and LDA to share in the profits if the preferred high-value occupiers are secured.
