Aiming to reduce costs/displaced businesses

I see from yesterday's Guardian that the IOC has a cunning plan to reduce the costs of the 2012 Olympics - cut down on the venues and facilities. Forget the superfluous people making a fortune from the preparations of the Games, the high salaries and the cost of "advisors" - far better to give a lower quality service and facilities. The article reads as follows:

London 2012 yesterday received formal approval for a series of venue changes at the Olympic Park. The International Olympic Committee's executive board meeting here approved a request from London to abandon its plans for a bespoke fencing venue, reduce the capacity of the handball arena from 10,000 seats to 7,000, and shift the BMX track to a new permanent site within the park.

The alterations to the park layout will produce a significant saving in construction costs, but London 2012 organisers insist that the changes are primarily driven by operational considerations and the desire to leave a legacy of sustainable venues.

Fencing events will move to the ExCel arena outside the Olympic Park, a facility that was not available at the time of London's bid. In addition, the basketball arena originally planned for the southern end of the park will move north, easing congestion in the south.

The BMX park will move to its permanent post-games site next to the velodrome and the handball arena will be re-oriented and reduced in size to leave a multi-sports hall with seating for up to 7,000 people. London organisers felt the original capacity of 10,000 could be unsustainable after the games.

Sebastian Coe, the chairman of London 2012, said: "We have always said that our intention was to build truly sustainable venues which will provide a strong elite and community use legacy for sport for generations to come, long after the final race has been run in 2012.

"These small changes to our temporary venue locations in the park are designed to maximise the sporting legacy we leave behind - as well as optimise the games-time experience for athletes and spectators. The IOC has recognised our desire to focus on a tangible legacy and approved these changes today."

Gilbert Felli, the IOC's executive director, said: "Our feeling is that the changes to the venues are not because of the budget. It was because the Olympic green was rather crowded. We are always looking towards sustainability and with the extension of the ExCel arena there was the opportunity to not build a temporary venue, and we are very happy with the move."
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Meanwhile, Time Online is taking up the cudgel on behalf of the businesses disrupted by the creation of the Olympic Park. To me it sounds as if the cudgel has already been wielded by the IOC and its cohorts. Is this how the budget will be maintained?:

Three years since the capital won the right to stage the 2012 Olympic Games, dozens of businesses that had to make way for the Olympic Park in East London are still fighting for compensation.

Of the 350 companies served with compulsory purchase orders (CPOs), it is alleged that more than 80 per cent are still fighting for a financial settlement. The head of one is preparing to take the London Development Agency (LDA), which issued the orders, to the High Court.

“I assumed that our business would be able to carry on where it left off,” said Ivor Gershfield, chief executive of HMM, a newspaper wrapping and delivery business. “That is the idea of a CPO. What happened was a Mugabe-style theft of our land. We were given assurances that they broke.”

Most businesses that had had a compulsory purchase order were “scared that if they fall out with the LDA, they won't get anything”, he said.

Many deals that the authority agreed were done on the understanding that a confidentiality agreement would prevent the business going public about what it had been through. One business that received compensation from the authority moved to a new site — and has received a demand that it move again.

Seamus Gannon, who runs Bedrock Crushing, a concrete recycling company, said: “I'm not frightened to speak out because I'm getting screwed anyway. They bulldozed me. The way they dealt with me was to say, 'Here's an offer and that's it'.”

Mr Gannon is taking his case to a lands tribunal. He said that he spent £180,000 on clearing his site in Marshgate Lane and moving, but the LDA paid only £75,000 in compensation. As for the 2.7 acres of property he evacuated, the LDA paid £2.5 million for it; Mr Gannon said that it had been valued at between £4million and £6million.

Christine Norman, of T&N Commercials, a vehicle repair business with a staff of 11, said it had operated out of Marshgate Lane for 20 years and received just over £300,000 for a move that professional advisers estimated at £900,000 to £1.4 million.

“We were kind of threatened,” she said. “We said, 'That figure isn't very high.' The LDA then said 'Accept it, or we'll give you something less and you can go to court and fight it'.”

In Marshgate Lane, T&N Commercials could work on five vehicles simultaneously. In July, the business moved to Hackney and can now work on just two. Ms Norman said that they were operating on a break-even basis, having initially lost £5,000-£10,000 a week. “We weren't treated fairly,” she said. “I'm not looking for bundles, just £150,000 to sort us out.”

Mr Gershfield, of HMM, calculates his company's losses at £700,000. In March last year, he spoke of taking his complaint to a judicial review.

He said: “They then said to me, 'You go to judicial review and we will concentrate our efforts on fighting it rather than processing your claim'.”

On June 8 he received £365,000 - followed in July by £200,000. But the cost of the CPO, he claims, is £1.25 million and still rising. HMM eventually settled on a site in Barking but because of the extra delivery costs it is still suffering a fall in profits of £5,000 a week.

Mr Gershfield is taking his case to a lands tribunal. The LDA, he said, was pressing a legal technicality that would prevent this. “If that succeeds we will go for them in the High Court,” he said.

After the businesses initially received the CPOs, 156 businesses from around the Marshgate Lane artery appointed a group known as the Professional Team to act as intermediaries. It consisted of a property firm, Jones Lang LaSalle, a law firm Finers Stephens Innocent and Balcombe Group, a loss assessment management company.

Balcombe Group are in the midst of a legal dispute for the losses they themselves incurred. Nick Balcombe said: “Everything has dragged on and on. For whose benefit? The LDA will have spent more in costs with us than if they had paid me three years ago.”

Finers Stephens Innocent are still acting for more than 80 businesses. “These businesses have been given a hard time,” Mark Stephens said. “Ken Livingstone [mayor when the Olympic bid was won] didn't make proper financial provision for this. It is clear that both he and the Government made a blunder of billion-pound proportions. And the small businesses Livingstone chose to ignore. He used fairly heavy-handed tactics to get rid of them.”

The LDA said yesterday that Bedrock Crushing was an example of a company that had “successfully” relocated. The LDA also disputed the number of displaced companies, saying that only 208 were affected, of which 102 were still negotiating.

The clearing of the Olympic Park area, which is equivalent in size to Hyde Park, was a huge operation with 425 residents and 35 traveller families also having to be moved on. Those under the 2012 umbrella have hailed it as a success story.

The businesses are hoping that the LDA will be more conciliatory under Boris Johnson, the new mayor.