Olympic Park Land Debt Will be Payed Off Claims London Deputy Mayor
January 5, 2012
The £231 million ($359 million) debt for buying the Olympic Park site will prove to be a good deal according to Sir Edward Lister, the Mayor of London’s chief of staff.
The new deal has seen the Greater London Authority (GLC) secure a large share of Olympic land in order to compensate the administrative body for taking on the huge financial debt and they are now tasked with selling on the land in order to raise funds to cover the shortfall.
Sir Edward, who is also Deputy Mayor for Planning, claimed the new deal means that the GLA now have the assets to repay the debt without any extra money from London taxpayers due to the fact that the Olympic Park in Stratford is likely to be a sought-after destination following the 2012 Olympic and Paralympics.
But the Mayor’s chief of staff did admit that repaying the debt entirely could take some time.
“The new land deal is hugely valuable to the GLA because we now have major land assets that we are confident we can sell to pay off the debt we have taken on,” Sir Edward told the GLA’s Budget and Performance Committee here today.
“We have already made estimates and have a book value for the land we have secured but those estimates are very conservative. For example, the book value for our land on the Olympic Park is £138 million ($214 million) but I think we can all agree that it is worth substantially more than that in real terms.
“So we have obviously been very conservative in our early estimates and it is likely that it fetch a sum that is much higher than those estimates.But it is clear that with some of the land we have, we will have to hold onto it and wait for the right time to sell in order to get the best possible deal.
“There is property that needs to be developed in order to ensure that we get right deal for the GLA and for London. But we do have time on our side as we are looking at 2023 or 2024 to repay this money. We do not have to repay all of this tomorrow.”
Sir Edward reiterated that the taxpayer will not be involved.
“We will be responsible for selling the assets and repaying that debt,” he said.
In November John Biggs, chair of the Budget and Performance Committee, had claimed the Mayor “has either been stitched up or allowed himself to be stitched up” by the Government by taking the Olympic Park land debt largely due to the fact that there is an uncertain property market and unknown interest costs.
But while Sir Edward admits that there are risks, he believes the GLA are in a good position with the land they have secured.
“It think it is fair to say that London has not be as badly affected by the economic downturn as other areas and that even in an uncertain property market, it remains a sought after destination,” he said.
“I think that as long as this is handled properly and as long as things are not rushed, this will prove a good deal for the GLA and ultimately a good deal for Londoners.”