Olympics site is hit by land price fall in credit crunch
PUBLISHED: 18:51 30 June 2008 | UPDATED: 13:24 05 October 2010
VAST tracts of the London Olympic site could be trapped in negative equity and left as a grim ghost town for years after the 2012 Games, a top City Hall boss has admitted. The London Development Agency’s Olympic Legacy director has conceded that taxpayers may have bought much of the Stratford site at the top of the property market. Now plummeting land values brought on by the international credit crunch have triggered fears that massive regeneration will be put on hold’
VAST tracts of the London Olympic site could be trapped in negative equity and left as a grim ghost town for years after the 2012 Games, a top City Hall boss has admitted.
Tom Russell, the London Development Agency's Olympic Legacy director, has conceded that taxpayers may have bought much of the Stratford site at the top of the property market.
Now plummeting land values brought on by the international credit crunch have triggered fears that massive regeneration plans, the bedrock of London's Olympic bid, will have to be put 'on hold.'
Mr Russell warned that LDA bosses and the Government would have to "hold our nerve" and resist post-Games pressure to sell land cheaply as a 'quick-fix' to recoup the £600 million spent acquiring the site.
The spectre of the Olympic Park becoming a semi-desolate symbol of economic recession is the latest nightmare scenario to haunt 2012 bosses.
Mr Russell's remarks were made last week as he launched a huge London-wide consultation 'road show' in which the public are being asked to help shape the Olympic Park legacy.
Officials will tour the capital with an unprecedented 'interactive' game that allows residents to highlight where on the 2012 site they would like to see 7,000 new houses, schools and other community facilities.
But while dismissing suggestions the consultation was a 'gimmick', Olympic bosses admitted they were nervous of what the public reaction would be.
They acknowledged that people would ask whether it was right to spend £9 billion on the Olympics at a time when homes are being repossessed, but called on Londoners to "take a long term view" and remember the appalling state of the site before builders moved in.
However, Mr Russell said the economic downturn was a worry because the Olympic business plan is based on selling land to developers at a profit after the Games.
He told the East London Advertiser there might be pressure on him to raise cash immediately.
But he added: "My personal view is to hold our nerve and resist any pressure to sell land to get money in as a 'quick fix'.
"It would be much better to hold out for a couple of years, rather than ruin this opportunity.
"Some of the land will remain dormant for while, yes, but that would happen anyway.
"There would be a danger in flooding the market. We have to take a commercial view on these things. Land will be released at market price in time."
The Olympic Legacy road-show will be in Tower Hamlets at the Whitechapel Idea Store on July 19.
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