After years of wrangling, the £750m Wembley goes ahead (almost)

After years of wrangling, the £750m Wembley goes ahead (almost) thumbnail

An eleventh-hour legal glitch caused another embarrassing delay to the latest attempt to begin work on Wembley, now the world's most expensive stadium.

Jill Treanor and Vivek Chaudhary
The Guardian, Thursday 26 September 2002 11.08 BST

An eleventh-hour legal glitch yesterday caused another embarrassing delay to the latest attempt to begin work on Wembley, now the world's most expensive stadium.

Teams of lawyers and bankers - whose fees are already estimated to have topped £80m - were last night poring over stacks of documents to find an urgent solution to a "commercially sensitive" issue that yet again threatens the dream home for English football.

Given the on-off history of the project no one was last night prepared to stake their reputations that the £752m project would get the green light by today.
A formal announcement depends on a £426m loan from German bank WestLB. That deal is now thought to be closer than ever despite the legal wranglings. Executives last night started to sign 42 complex legal contracts - enough to fill a medium-sized living room - in expectation that the problem could be solved.

The deal should have gone through yesterday and a high-profile press conference was planned. Adam Crozier, the Football Association chief executive, Tessa Jowell, the culture secretary and Trevor Brooking, the Sport England chairman, were all standing by to proclaim the end of the long-running battle to start work on the stadium. But it was cancelled at the last minute without any explanation. Last night the FA's spokesman, Paul Newman, would only say: "There have been no developments."

However, a new controversy threatens to once again drag out the seven-year saga: the national audit office is working on a full report on the project's use of £120m of lottery money. "We are now reviewing the project with a view to preparing a report for parliament by the spring," an NAO spokesman said.

Now on its third set of management and bankers, the stadium project has already been subjected to criticism by the Commons media select committee and faced doubts about the way contracts were awarded to build the stadium.

The prospect of another investigation comes just five days before the bulldozers must move in at the north London site if the new stadium is to be finished by 2006. If the twin towers are not taken down quickly, the company that sold the land to the Wembley project team can demand the site back.

The race against time comes almost two years after England's ignominious defeat against Germany in the last game staged at Wembley, and when work on the new stadium should be nearing completion.

Instead, after years of delay and two failed attempts to raise cash, the hope is that the 90,000-seater stadium will be ready to stage the 2006 FA cup final.
Until a few months ago, that goal appeared to be beyond the grasp of Wembley National Stadium Limited, the FA subsidiary set up to manage the project.

But in the spring German bank WestLB signalled it was prepared to take on what many others had refused- a risky £426m loan from its own coffers. The 16-year loan has been negotiated by WestLB's Robin Saunders, the American woman who has also financed Formula One.

Clinching the deal has taken much longer than both sides had expected. It has broken the timetable set out by the government to get the work done by the end of April and raised a whole new se ries of challenges for the FA. It has required a dramatic scaling back of the Norman Foster-designed stadium that in the winter of 2000 included a hotel and visitor complex, the dream of the then-WNSL chairman Ken Bates, the Chelsea FC chairman.

His plan was too ambitious and failed to win the confidence of financial backers or get an extra £150m from government.

To get the project started, the FA has been forced to put up £148m and sign a contract agreeing to play England internationals at Wembley for the next 30 years - 10 years longer than originally expected. Other organisations such as the Football League and the Rugby League will also play their showpiece matches at Wembley for the same period of time.

The inclusion of a temporary athletics track has also caused problems for the FA as it will cut capacity of the stadium to 78,000, reducing revenues. Finding a way to insert this track - which will take 11 weeks to install and four weeks to take down - is crucial if there is to be bid to stage an Olympics in London or another major athletics event.

Underpinning the entire business plan is 18,800 premium seats which will be sold on a 10-year basis to corporate clients and wealthy fans. The investment bank Credit Suisse First Boston is committing £32m in return for future income from the sale of the seats, which will be marketed and sold by the sports agency IMG.

The financial success of the stadium rests on the sale of these seats, leading to concern that WNSL may have problems attracting buyers at a time when interest in football is levelling and many companies are facing an uncertain future. The seats are expected to be the most expensive sports seats in the world.
 

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