taffhammer wrote: The bidding process is different this time. The OPLC will draw up detailed plans for the stadium after consideration of proposals from bidders, conversion costs and income. There's a good post from MEM on this:
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Thanks York,that makes a bit more sense .So i can't see them giving it to us due to the problems and cost in changing it for football when the other options will involve less cost to the OPLC.
Not necessarily much of the cost of the stadium is involved in the infrastructure and base, the pathways in, the foundations and lower tier built on contaminated land etc and this has already been spent. If they scale it back to a 25,000 open stadium they still have to spend another £40M? on conversion/reduction and what return can they get on that and how long will it take to break even? If on the other hand they leave as is without an anchor tenant the same scenario for the next 25 years until the working life of the infrastructure requires re-building or scrapping.
The only scenario that offers the government a guaranteed steady income over the long term from the tenants is via us and in that case they need to work out the RoI of all three cost options, costs are approx : a) £40 in 2108 b) £40M+ in 2038? or c) £100M+? in 2013 How much will they get back in scenario a) when the only income will be a few minor cricket and athletics meetings and some office accommodation I don't think the venue is suitable for concerts in that mode. same as in b) with a few concerts and maybe some winter team games like rugby added on. Or c) where they get back the RoI for a) + b) + c) with the majority risk free and guaranteed (subject to us not going under!)
So the only thing to work out is Conversion Costs against Income in which case our scenario might look quite a bit more attractive financially AND politically.
They have to spend £40M no matter which option they choose.So
Option c) RoI = (cost of option c) conversion - cost of option a) or b) conversion) - additional income of option a), b) and c) x 100 years
For example if our conversion is £140M (plus anything else West Ham might pay for seating etc.so not included here) and we pay £3M per annum and others £1M ~ prepared to be shot down on this. Then ignoring inflation NPV / IRR etc.
RoI = (£140M - £40) - (3M+£1M) x100 or £100M - £400M and is £300M over 100 years or payback after just over 30 years.
Compare that to scenario a) or b) RoI = £40M - x £1M Rental x 100 years they will still need to get well over £1M pa annum to break even in 40 years with no real guaranteed income.
hope that makes sense