What will debt-driven Olympic legacy review entail?

Here is one that have I have just got back to the office to find in my inbox from the London Assembly. I will be sure to try to get more information on just what this “review” could mean, but given that it relates to debt the immediate fear is that the ambitions of the Mayoral Development Corporation for the park post-Games are going to be scaled back. I will come back with more. Anyway, here is the story:

The legacy plans for the 500-acre Olympic Park in east London’s Stratford will need to be reviewed in light of a new deal to cover the £231m of debt linked to the acquisition of the site, the Mayor’s Chief of Staff said today.

 

Sir Edward Lister told the London Assembly’s Budget and Performance Committee that the money tied up in the site is now a key part of the Mayor’s regeneration budget going forward and as such needs to be spent to the “best advantage of the Greater London Authority (GLA) as a whole”.

John Biggs, chair of the Budget and Performance Committee, said: “The new deal, while welcome in the long term, means that the mayor will have to balance reducing the GLA’s debt against his regeneration aims.

“When we meet the Mayor next week we will ask him how he plans to manage these pressures going forward to ensure he gets the best outcome for Londoners.”

The Committee is set to question the Mayor directly about his proposed budget for 2012/13 on Tuesday January 10 at City Hall.

According to the Mayor’s draft budget for 2012/13, the GLA will get full receipts from the sale of the Sugar House Lane site in Inter IKEA plus the first £223m in land receipts.

After that there will be a 25:75 split between the GLA and Lottery until the Lottery has been repaid in full.

There will then be a 50:50 split between the GLA and central government on any remaining land receipts.

The government will also provide the GLA with an extra £12m in 2011-12 to put towards Olympic land debt costs over the next three years.

The debt the London Development Agency took on to pay for the acquisition and remediation of the Olympic Park will transfer to the GLA on 1 April 2012.

The GLA is expecting to inherit £349m of Olympic land debt with government funding being provided to reduce the debt to £231m by 31 March 2014.

Under the old arrangement, the LDA was expecting grant funding to repay the entire sum.

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About Paul Norman's Olympics blog

News Editor of CoStar News, a commercial property news service. Regular blogger on the London 2012 Olympics and what it means for property and the the regeneration of East London
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