Less than zero

9 Oct

Not paying a penny

West Ham United has yet to hand over a penny in business rates for its London Stadium home, according to a report in London freesheet City AM.

Some 16 months after settling into what was called Olympic Stadium, the body responsible for setting UK business rates is yet to decide whether the Premier League club must pay anything, the Press Association first reported.

Earlier this year it was revealed that West Ham only had to pay rates on retail and office space it lets, rather than the entire stadium. This left landlord E20 Stadium to foot the remainder of annual £2.3m business rate bill. (emphasis added)

West Ham’s annual rent for the stadium is £2.5 million a year (halved if the club is relegated from the Premier League).

Newham loaned £40 million to the stadium partnership to help meet the cost of turning it into a football ground. The hope was that future profits would repay the loan and more. That loan has since been ‘impaired’ and the council’s finance director estimates its current value as zero. It will almost certainly never be repaid.

Adding insult to injury, a multi-millionaire owned football club, playing in the world’s richest league, is having its business rates paid by taxpayers too.

UPDATE

One of the supposed benefits of Newham ‘investing’ in the stadium was the prospect of jobs for local residents. ‘Up to 75%’ of new jobs created would go to local people, they mayor claimed.

A recent FOI response shows what a dismal failure this has been (percentages added):

The total number of jobs created at the stadium currently is 1,531 jobs. The number of Newham residents employed on full time contracts is 15 out of 70 jobs (21.4%) and the number of Newham residents employed on casual contracts is 469 out of 1,461 jobs (32.1%).

15 full-time jobs and 469 casual jobs. For £40 million.

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5 Responses to “Less than zero”

  1. urriti October 9, 2017 at 20:12 #

    more insult to injury…

  2. Down to Earth October 10, 2017 at 09:53 #

    This “Newham loaned £40 million to the stadium partnership to help meet the cost of turning it into a football ground. ” is not accurate.
    Newham borrowed £40m to buy a third (approx.) share in the stadium company.
    That deal was done after the stadium company’s lease to West Ham United FC and contracts for conversion works.

    • Martin Warne October 10, 2017 at 10:25 #

      A distinction without a difference.

      The council loaned £40m to Newham Legacy Investments, which used the money to buy a 35% stake in E20 Stadium Partnership. E20 then used it to part-fund the conversion of the stadium.

      • Down to Earth October 11, 2017 at 09:32 #

        Newham Legacy Investments is a company wholly owned by Newham Council, for the purpose of owning the stake in the stadium company.
        That deal was done after the stadium company’s lease to West Ham United FC and contracts for conversion works.

  3. Birdman October 11, 2017 at 22:28 #

    Nobody other than a pedant or an LBN shill could try to argue that LBN didn’t use £40m+ of loans to support the millionaire owners of WHUFC. The business case for that deal was (is) suppressed and it would seem as if the loan will never be repaid. The owners of WHUFC are making a lot of money on the sale of the Upton Park ground, the amount of so called affordable housing has been reduced, and they are not paying anything like the amount of business rates that normal people would expect. This whole deal was a disgrace from the start and auditors and government need to ask serious questions about the whole process.

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