The London Olympic legacy dream was real – but four years on, is it still alive?
18 August 2016
As we find ourselves enjoying both the carnival-style spectacle of Rio 2016 and the success of the British athletes at the Games, the build-up felt somewhat tainted by the media frenzy surrounding the clear health risks faced by the athletes and visitors (and the wider global community), the Russian doping scandal and the ongoing protesting on the streets of Rio.
As we find ourselves enjoying both the carnival-style spectacle of Rio 2016 and the success of the British athletes at the Games, the build-up felt somewhat tainted by the media frenzy surrounding the clear health risks faced by the athletes and visitors (and the wider global community), the Russian doping scandal and the ongoing protesting on the streets of Rio. There is no doubt that the Rio 2016 will prove to be a celebration of world sport, but questions will be raised about its long term effects on the city and beyond.
The Olympic brand and model is not just about delivering a global sporting showcase; it is about so much more. It seems, then, like a good opportunity to take stock and look back at London 2012 when our country was basking in the glory of securing and delivering what many consider to be a once in a life time achievement for our capital city. However, four years on, are we able to assess with any degree of certainty, whether the London 2012 legacy lives on or has it been as faltering, over ambitious and costly as it has been for so many other host cities?
'Legacy' is a word that is used in many different contexts and its effects can be both tangible and intangible and so often difficult to fully appreciate. In the context of London 2012, the vision was to create a positive and lasting impact in a broad number of key areas against which success would be measured:
- Infrastructure development
- The economy (both in recovery and future growth)
- Job creation
- Increasing participation in sport
This was championed as a legacy programme of enormous scale and ambition, but apprehension swiftly crept in and, with inflating budgets and disorganisation, the journey began slowly.
However, the success of London 2012 should not simply be judged as a single package. Each legacy jigsaw piece has developed independently, contributing towards the transformation of London’s infrastructure and real estate, investment prospects and enterprise - and have gone a considerable way to fulfilling the Olympic promise.
Bucking the Olympic trend
A ‘legacy, in Olympic terms, is often judged on the ability to recycle the landmark stadiums and other key structures. The usual Olympic fallout is that showcase infrastructure falls into varying degree of disuse and grand legacy pledges go unfulfilled. But, where many other host cities have failed, London seems to have bucked the trend, with practical - and primarily private sector - futures secured (at least partially) for all eight Olympic venues. The Olympic Park was re-opened as the Queen Elizabeth Olympic Park in July 2013 with ambitious plans to develop a constellation of sporting, educational, artistic, technology and cultural institutions on the site along with new housing. Importantly, the Park’s key locations demonstrate just how far the legacy scheme has progressed, and what we can expect to see going forward.
The Olympic Stadium
Unsurprisingly, a lot of the more recent high profile media attention has centred on the protracted negotiations in securing West Ham United (WH) as the anchor tenant for the Olympic Stadium.
There has been much criticism of the legal battle (at an estimated cost of £20,000 to the tax payer) arising from London Legacy Development Corporation’s (LLDC) attempt to thwart the publication of the terms agreed following a Freedom of Information campaign. Having suffered defeat, LLDC then found itself subject to intense scrutiny when the terms disclosed revealed a ‘murky’ deal which some regarded as being a "scandal" and "outrageous for the taxpayer”. While there are some safeguards in place, costs include, for example, the taxpayer covering running costs estimated to be between £1.4million and £2.5 million per annum (including policing and stewarding, pitch maintenance, goalposts, goal nets and corner flags).
Despite all the issues that have come with it, it is still the biggest and most successful stadium move in Britain in the modern era, with more than 50,000 season tickets sold. Some will argue, therefore, that it is beneficial to taxpayers as it has helped rescue the stadium from a potential dire future. In addition, the re-designed facility will be a multi-use venue and will host the 2017 World Athletic Championships and International Paralympic World Athletic Championships, Rugby World Cup fixtures and other big events.
However, it is hard to overlook the mistakes made by London 2012 organisers when deciding the centrepiece would be built with an athletics legacy at its heart. This has meant that the WH offer was the best and only viable deal on the table and the only option in securing a lasting legacy. Some say the stadium became a ‘hot potato’ that the LLDC needed to get rid of which meant a deal was closed at any price.
Perhaps, though, the biggest impact of the London 2012 has been the regeneration story of East London and the economic benefits flowing from this. Regarded as one of Europe’s largest regeneration projects, rejuvenating one of the most deprived areas of London, it has created a thriving new quarter for the capital city and has created additional jobs, skills and homes, helped fuel a major change in the development plans for the area, and driven investor interest in London to an unprecedented level.
The East Village
In the build-up to London 2012, the promise of reasonably priced homes for Londoners was a key part of the legacy strategy. Previously the athletes’ village, The East Village is being transformed into five new neighbourhoods and is targeting more than 10,000 new households by 2030 - around a third of which are intended to be affordable housing. On the face of it, this seems like a positive step. However, as time has gone by, we have seen the initial affordable housing target diminish, with the original claim of 50% now a distant memory and many critics estimating that the final total could be closer to 15%. Concerns have also been raised that such housing will actually be outside the reach of most people due to affordable housing now being classed as 80% of market rent; still out of reach for many London families.
This reduction has been justified by an increase in commercial development. Boris Johnson previously said that fewer homes and a smaller percentage of affordable housing in the park was a "price well worth paying" if other forms of regeneration led to more jobs and economic activity – but the potential damage this might have to the legacy programme is debated.
Referred to as an ‘an ugly name for a beautiful idea’, this cultural and educational quarter will bring a number of key organisations together to showcase art, dance, history, craft, technology and cutting edged design. Taking the place of 1,000 homes, this £1.3 billion project is expected to create 3,000 jobs, attract 1.5 million annual visitors and inject £2.8 billion into the local economy. It is expected that planning will be submitted at the end of 2016 with a target completion date of 2020-2021.
Attracting major cultural tenants has been key to its anticipated success. Outposts of the Victoria & Albert museum (which will also grant space to, and collaborate with, The Smithsonian Institution in Washington, DC), and Sadler’s Wells will line up alongside a new home for the relocating UAL's 5,000 London College of Fashion students and 500 staff, and two 30/40-storey residential towers. Around a nearby bend in the river a second campus for University College London — UCL East — promises to embed its 3,000 students and staff in the local community. The Government is providing £141 million and the LLDC and the Greater London Authority a further £198 million. The institutions themselves and private sector funding will contribute £789 million and a further £180 million is being fundraised philanthropically.
Located right in the centre of the Park, the International Quarter claims to be the capital’s new home for progressive business with access to some of the world’s most unique and forward-thinking cultural institutions and a workplace design. ‘Shaped for tomorrow’, the International Quarter is regarded as a place where people will thrive and companies can grow.
The project will deliver four million sq ft of grade A office accommodation, 333 new residential units and other community facilities within a 22 acre site. Almost one million sq ft has been pre-let to the Financial Conduct Authority and Transport for London who will be occupying the first two buildings from Spring 2018. Investments from Deutsche Bank and Legal and General totalled more than £600 million of forward sales for these two commercial buildings, outlining the confidence in the scheme. This £2.3 billion project will be delivered by Lendlease on behalf of Stratford City Business District Ltd – a joint venture between Australian giant Lend Lease and the taxpayer-owned London and Continental Railways (LCR).
Press and Broadcast Centre - 'Here East'
The press and broadcast centres used to share the London 2012 Olympics with the rest of the world have been at the heart of the legacy project. They were initially designed to cater to over 20,000 broadcasters, photographers and print journalists, which has meant the project has inherited one of the best connectivity infrastructures in the country.
Rebranded as ‘Here East’, the project includes a new 1.2 million square foot “digital campus”, combining business, technology, media, education and data considered to contain the most advanced digital infrastructure.
As part of the London 2012 legacy programme, the IBC is now home to BT Sport who agreed a 10-year lease in 2012 to be the anchor tenant and began broadcasting in August 2013. BT Sport now has three TV studios, a control centre, 20 edit suites, and an audience holding area at Here East. But while BT Sport is perhaps the best-known tenant, the one taking up the most space is data centre provider Infinity, which has built a data centre into the broadcast building that takes up more than half of the building’s footprint and is one of the largest and most efficient data centres in Europe. Academic Institutions including University College London (UCL), Loughborough University, and Hackney Community College are also tenants. Studio Wayne McGregor will also be opening a new world-class arts space at Here East in 2017.
It is believed that the project will meet the requirements of the LDDC’s agenda to provide wide-ranging local economic benefits from London 2012 by exploiting the technological capabilities of the site as a major broadcast hub to create a home for global companies alongside east London’s most innovative start-ups. The development is currently in the planning stages and is expected to be fully operational by 2018.
- The Copper Box – third largest arena in London offering sports from basketball to boxing and other events
- Aquatics Centre – is open to the public
- The Lee Valley Velo Park – one mile road cycle circuit and mountain bike trail as well as the 6,000 Velodrome
- Eton Manor Sports complex – Lee Valley Tennis and Hockey Centre
Whilst focus has been on the regeneration of the Park, there has also been a record of regeneration accelerating in surrounding areas, Westfield Stratford, the Strand East neighbourhood and wider east London developments with Stratford now one of the best connected transport hubs in the country. Some examples of deals which are set to transform East London’s historic docklands include ABP (China) Holding Group £1 billion investment in a 35 acre site at Royal Albert Dock and a £1.5 billion deal with the Silvertown Partnership to transform Silvertown Quays in London’s Royal Docks into a new innovation quarter.
A marathon, not a sprint
It is certainly arguable that London is succeeding where virtually no city has succeeded before: Toronto went bust, Montreal has not long paid off its debts, the legacy of Athens has yielded what is generally viewed as a decaying city and Beijing’s Bird’s nest stadium and other venues are struggling to get by with eye watering annual maintenance bills. It seems, therefore, that London is more advanced than any other host city in activating our legacy and many support the claim that London will deliver on a regeneration model which could be adopted by other hosts cities in years to come.
Of course, it is yet to be seen how the economic uncertainty following the EU Referendum vote will impact on the continued progress of the legacy. Rosanna Lawes, the executive director of development at the LLDC, said Stratford and east London were changing fast and that London was ‘still open for business after the EU referendum’ and that ‘in a few short years, we will see not only a new cultural and education district in east London, with some of the world’s leading institutions sitting in the heart of the Park, but new neighbourhoods and business districts and hugely successful sporting venues delivering on the legacy promises made for the 2012 Games”.
The delivery of the legacy is certainly a marathon, not a sprint. It will be probably be a decade or more before the true impacts can be assessed. However, it seems that we are still firmly in the race to achieve that rare feat of building a successful legacy and a cultural and economic district that will continue to rise ‘like a brick phoenix’ from the London 2012 opening ceremony flames.
Tom Merrick is a senior associate in the real estate team and a member of the Sports Business Group at Lewis Silkin LLP.
The Sports Business Group at Lewis Silkin works with some of the world’s best known and innovative sports brands and organisations, with expertise spanning the entire spectrum of the sports industry. The team advises on issues ranging from player transfers to broadcasting rights, club restructuring to stadium acquisitions, sporting rules to sports investments, disciplinary hearings to sponsorship strategy, and brand protection to property leasing.