Freeholder blocks plan to save millions of pounds by extending lease on ailing £385m project
The London mayor’s regeneration body has blocked an audacious attempt by the Olympic Delivery Authority to save tens of millions of pounds on the troubled £385m media centre.
It is understood that, in the latest twist of the battle to secure funding for the venue, the ODA approached the London Development Agency (LDA) with a proposal to take a 999-year lease on the ailing project.
This would have allowed the ODA, whose current lease expires at the end of the Games, to offset its escalating costs against the future sale of the site.
However, senior sources said the LDA, which is the freeholder of the site as well as being in charge of the Olympic legacy, “went to battle” with the ODA, demanding concrete promises on the media centre’s legacy development before even considering the move.
Building understands the ODA has since backed down, and has reverted to planning the development on the basis that it cannot assume returns from the land value after the Games.
A fierce debate is raging about the potential legacy of the media centre, which was originally intended to provide 8,000 permanent jobs and a new media industry hub in Hackney.
It is likely that developers Igloo and Carillion may be sidelined with a development management role
The 1.3m ft2 main press centre (MPC) and international broadcast centre were originally to have left a legacy of 741,000ft2 of employment space after the Games. However it is understood that the ODA is looking at plans that will leave about 200,000ft2.
It is also likely developers Igloo and Carillion may be sidelined with a development management role for the project.
One source said: “The media centre is a real cock-up. It has been really badly handled from start to end.”
In addition, Building understands that senior ODA executives met board members of shopping centre developer Westfield last week about putting part of the MPC in the Stratford City development instead of the original Hackney site.
The ODA said it was considering “all options”, including it being a temporary structure, in its review of the media centre site, but declined to comment on its negotiations with the LDA and Westfield. A spokesperson said: “Discussions over the financing of the media centre remain commercially sensitive.”