West Ham accused of not paying enough rent to cover cost of London Stadium events
PUBLISHED: 15:44 06 September 2018 | UPDATED: 19:34 06 September 2018
West Ham United Football Club aren't paying enough rent to cover the cost of events, London Stadium bosses have said.
At a meeting of the London Assembly today, Sir Peter Hendy and Lyn Garner, heads of the London Legacy Development Corporation which operates the Olympic Park, were grilled about the losses the park is making.
They said that despite the park’s successes, low rents from companies operating on the site are partly driving financial losses.
Ms Garner, who took over as chief executive of the LLDC in February, said: “I have to address the elephant in the room. What’s really driving the problems here are the low rents paid by concessionaires, particularly West Ham.
“The rent they pay us and the usage costs don’t cover the event day costs.”
West Ham pays £2.5 million per year in rent. It was granted ownership of the Olympic Stadium (now the London Stadium) in 2013, which cost £323m to convert. Costs for the stadium are covered by E20, a public sector company.
The mayor of London, Sadiq Khan, took control of the ground after an independent review into the stadium’s bill last year found the taxpayer was left paying for losses of around £20m a year.
Newham Council invested £40m into the stadium in March 2013 under the previous administration. In total, they invested £52.2m in the stadium, adding a further £12.2m in working capital between February 2015 and June 2017 before walking away without making a penny.
Ms Garner said: “Projections show we’re losing £10m to £20m a year. We’re going to be in a public subsidy position in the stadium for some years.
“At the moment we’re looking at a five-year plan which will get us on a firmer financial footing, but it’s important that we tackle that public subsidy issue.”
She added that operational costs and the costs of moving retractable seats were also contributing to losses. She said the park wasn’t maximising on potential money-making opportunities, like naming rights and increasing the number of events, but going forward, the park would be taking advantage of chances for commercialisation.
She said: “The stadium nevertheless is a core piece of the legacy of the park and its’ success is important in developing the regeneration of the local area. It’s a successful project despite this public subsidy.”
A spokesman from West Ham said: “West Ham United initially offered to purchase London Stadium but our request was denied. We were given a tenancy agreement because we were the best offer by far on the table.
“As LLDC acknowledged at the hearing today the losses at the stadium are due to a number of factors, including the extraordinary cost of moving the retractable seating, inefficient operating costs and the absence of a naming rights partner.
“There are other commercial opportunities that they have ignored. West Ham United have offered our experience, expertise and opportunities for shared endeavour every step of the way.
“All we have ever done is honour the terms of our tenancy agreement which has 97 years to run.”