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Property companies eye Olympic profits

The Property world is getting excited by the interest supposedly being showed in the Athletes’ Village and the Media Centre. Of course, expressions of interest are not the same as money on the table. But even if the money does materialise what does this signify? That property tycoons see an opportunity to make a profit? And that profit will be made at a loss to the public purse of at least £150million on the Village and an unknown sum on the Media Centre.

Of course none of the property journalists remember the residents of Clays Lane who were removed, and left worse off, to make way for this Village property fest. As Games Monitor has made plain their estate had been sought after by Stratford City but was outside its grasp and was only demolished because of the Olympics, something which would not otherwise have occurred. And it was done on the basis of the continuing lie that this represents a housing legacy. The ODA had to admit that there was no legacy from the Village as the housing was going to be built anyway but that doesn’t prevent them continuing to claim it. One undeclared legacy is that private housing replaces the social housing demolished to make way for it.

Neither does the property press remember that the Press and Broadcasting Media Centre stands on the former Arena Field, a play space for local people. Now it is just another investment opportunity. Earlier there were reports of the need to spend further money to make up the deficiencies of the Centre and upgrade it after the Olympics, a spend that may yet have to be met out of public funds. No wonder there are so many enthusiastic private sector bidders! Where were they when the property market collapsed and funding was needed and will they still be interested if they, rather than the public sector, have to fork out for this upgrade?

Paul Norman also gets enthusiastic about an article in the Telegraph. Both place great reliance on a report from glorified estate agents CBRE, ‘advisors’ to the OPLC. That certainly makes CBRE unbiased observers! CBRE recycles a number of old LDA/ODA chestnuts, the first of which is that Westfield kept going in Stratford because of London 2012. Really? Westfield Stratford is not a one-off shopping centre but is designed as one of two shopping centres, the other at White City, to cover both ends of London. When Stratford City launched its planning application, granted before the Olympics, it was described as a 'Metropolitan Centre' to serve the whole of London. Matthew Black of CBRE declares that because of the Olympics Stratford will become an extension of Central London. He omits to mention that this was exactly what Stratford City was designed to achieve as a metropolitan centre. This posed a bit of problem for the LDA which had to explain why Stratford needed a second regeneration programme with the Olympics so it spent a lot of time rubbishing the Stratford City project during the CPO process. Once all that was over the ODA built it up again claiming it as a pre-Games legacy.

The report also refers to the 'problem' of 'fragmented land ownership' which we heard so much about during the CPO Inquiry - those of us who were there! Why is 'fragmented' landownership a problem? Or why is 'concentrated' land ownership, which is what we have now on the Olympic Park, a good thing? CBRE get excited about IKEA’s purchase of Sugar House Lane, which Matthew Black calls a ‘magic site’. How this supports the point about fragmented land ownership is unclear. Sugar House Lane is not in the Olympic Park and was not owned by the ODA, LDA or any other part of the new concentrated land management in the area. It was purchased from Cleveland, a ‘fragmented’ owner. CBRE is just rehashing, rather clumsily, the justification advanced by the Olympic bidders that the area needed the wholesale expropriation of land from one set of owners and its sale at a profit to another set, displacing existing users and owners as part of the deal, in order for it to be ‘developed’.

CBRE also make the usual casual references to past dereliction and present refurbishment, so beloved of the LDA and ODA, to justify the programme. CBRE’s Mr Black refers to the obstacle of ‘contaminated, polluted land’. Games Monitor has pointed out the limitations and failings of the 2012 clean-up programme, which even the ODA acknowledges mean developers may well have to do further remediation before development can proceed. But the fact of the matter is that sites are regularly cleaned up by developers if sufficient profit can be made so contamination is not in itself a bar to development. This is the case with Sugar House Lane as it is outside the clean-up area and any decontamination will have to be carried out by IKEA.

CBRE also claims the Olympics has resulted in the clean-up of the canal but once again this has nothing to do with Sugar House Lane as it is outside the Park and it is unclear there has been any clean up of these sections of the canal or river. Of course, the lock at Three Mills, constructed ostensibly to allow barges to take materials in and out of the Park (although almost no barges use the lock), has meant an end to the tidal flow on the river Lea, a public sector development which will make the river more attractive to property developers.

As for redundant buildings which CBRE says would have littered the area if the Olympics had not intervened, Sugar House Lane being outside the Park is, of course, full of redundant buildings, which is why it was available for purchase. The Olympic site, on the other hand, was full of buildings, now demolished, which were in use and where 5000 people worked. Those people worked in ‘dirty’ industrial jobs which have been moved out of the area and will be replaced by ‘clean’ high-tech creative type work, which is unlikely to meet the employment needs of locals.

Then, of course, the report makes the usual nod towards the claims of investment in infrastructure brought about by the Olympics. Exactly what infrastructure is not stated. Most of the Olympic investment relates to specific buildings and roads within the Olympic Park. Much has been made of transport improvements but these are largely mythological. All the road, rail and tube infrastructure was in place before the Olympics turned up. Stratford was already one of the best connected places in the capital. In terms of housing, the Olympics, by taking land out of circulation, have actually held up development as Jason Prior, Olympics Master Planner, has stated. New housing is being built all over the area outside the Park and these developments have nothing to do with the Olympics. Nearby development zones like Three Mills have their own development plans which are entirely separate from the Olympics.

The Telegraph acknowledges the importance of the Westfield/Stratford City project for development in the area. Of course, Stratford City would have attracted further investment and prompted further development on its own account if the Olympics hadn’t come. Now it is tangled up with ‘legacy’ so we will never know how this would have occurred without the Olympics. However, it is certainly true that the investment of public funds has provided a considerable incentive for the private sector. Hardly surprising as this was what was intended all along. Private sector companies will ‘invest’ when the price is right and the profit is clear. The irony is that the prospects for Stratford were always much better than the Olympic bidders claimed and the public investment in the Olympic Park has simply added to the costs which need to be recovered.

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