London mayor Ken Livingstone is forcing developers of the £4bn Stratford City project to give up more land for the 2012 Olympic Games.
Last week, the London Development Agency (LDA), which is controlled by the mayor, said it would issue a compulsory purchase order for the entire 170-acre Stratford City site after negotiations with the Stratford City Development Partnership (SCDP) broke down.
The SCDP comprises four equal shareholders Westfield, Multiplex, the Reuben brothers, Stanhope with Sir Stuart Lipton and London & Continental Railways, which holds the land on a 99-year lease from the government.
The LDA and the mayor want to put more of the Olympic village on the SCDP site than was originally agreed with the developers.
The land is also earmarked for access roads and car parking. Livingstone now wants the entire Olympic project to be built on less land to cut costs.
At present, just under half the 3m sq ft of athlete accommodation is intended to be on the Stratford City site, but the mayor is pushing for it to house more, and perhaps all.
The move has come as a result of a funding crisis in the LDA, which is facing huge uncertainty over whether it can deliver the land for the Games.
Deals for just 22 of the 284 sites owned by local businesses have been done so far, and the cost of relocating the businesses is soaring.
Speaking at a Commons select committee last week, LDA chief executive Mary Reilly said: “Originally we set aside £478m.
“We are now reviewing those budgets [because we need] to acquire more land for relocation. We have not yet finalised the budget, but we are looking at some worst-case scenarios.”
The LDA’s worst case pushes the budget closer to £1bn.
Livingstone claimed that the CPO threat was simply to ensure access to the Games from the new Stratford International station at the heart of SCDP’s site. “This would have become the biggest ransom strip in development history.”
But a source close to the SCDP said: “Livingstone wants to put more of the athlete village on the Stratford City lands because the LDA has messed up the acquisition of the land in the surrounding area.
“And because the consortium is weak at present, he has made the CPO move.”
The SCDP has been riven with disagreements since the 75% stake held by Chelsfield was bought by Multiplex, the Reuben brothers and Westfield, following the takeover of the company.
Following Sir Stuart Lipton’s resignation as chairman of Stanhope, its 25% stake will also be split between Stanhope and Lipton.
The instability of the SCDP has led to a number of offers being made for their stakes.
Although none of the parties has said they are willing to sell, it is widely believed that both Multiplex and Stanhope could accept an offer.
Despite the collapse of talks with the LDA last week, negotiations are continuing. Central government is convinced that the parties are close to a deal.
As EG went to press, sports minister Richard Caborn said that he expected an agreement “in the next 24 hours”.
But the LDA has distanced itself from his comments, saying: “Mr Caborn does not speak for the LDA. There will be an announcement when there is an announcement.”
An SCDP source said: “The government has said that, so long as we stick to the timing and agree to give over more land to the Olympics, it won’t CPO the core of the site.
But he added: “A full-blooded agreement doesn’t happen overnight. It’s too complicated.”
References: EGi News 11/11/05
