London's Olympic endowment

2 November 2012

Despite the doomsayers, the London Olympics turned out to be a triumphant sporting spectacle. But now the scaremongers are back, confidently predicting that the much-anticipated legacy from the Games will not appear. Nigel Ash speaks to Ricky Burdett of LSE, Mark Wynne Smith of Jones Lang LaSalle Hotels and Keith Williams of British Airways, who are determined to prove them wrong.

At the very foundation of the UK's Olympic bid was the principle of legacy; what the Games would leave behind - not simply in terms of infrastructure, but also of revitalised communities. Moreover, the ambition was to cultivate a healthy attitude to sporting activities, with a newfound respect for and understanding of disabled athletics. In all of this and especially the latter respect, the Paralympics were an unquestionable success.

Now, however, with the excitement and cheers a fading memory, attention turns directly to the physical issue of legacy for the 559 acre Olympic Park, which is owned by the London Legacy Development Corporation (LLDC). Embracing London's East End boroughs of Hackney, Newham, Tower Hamlets and Waltham Forest will be a community of 11,000 new homes, along with commercial and retail premises, schools, health centres and, of course, the permanent Olympic sports structures.

London's ebullient mayor Boris Johnson, now in his second term of office, is typically excited about the prospects.

"By 2015, the Olympic Games will have provided a sustained economic boost of £5.1bn for London."

"When I entered City Hall, there were no concrete Olympic legacy plans for after the 2012 Games," he tells CEO. "I set up the Olympic Park Legacy Committee so that we now have plans that leave no white elephants in London, ensuring a lasting legacy by creating 10,000 local jobs and converting the Olympic Village into 11,000 new homes".

Johnson cites calculations that by 2015, the Games will have provided a sustained economic boost of £5.1bn for London. A report by Lloyds Bank is equally positive. Looking five years ahead, it estimates that London will see an extra £6bn in economic activity, while there will be a £10.5bn extra pick-up in areas outside greater London.

The LLDC's chairman Daniel Moylan, however, has warned that for east London the full legacy will take 20 years to come through, pointing out that this was the plan all along.

Re-balancing London

One man who has been watching and closely concerned with the legacy project is Ricky Burdett, professor of urban studies at the London School of Economics and Political Science (LSE) and director of LSE Cities. When, nine years ago, he first visited the area around Stratford station, there was a gas works and rubbish dumps piled high with tyres and domestic appliances, the largest of which was known as 'Fridge Mountain'. Burdett says that the site around Stratford fitted the bill for major urban regeneration investment.

"Right in the middle of Stratford is actually an incredibly good public transport hub, and it's been good for a long time. In other words, it has not become good merely as a result of the investment made for the Olympics - that is a very significant thing to understand," he says.

"The Olympic site legacy should be seen as part of a wider “re-balancing” of London since the 1970s."

"At Stratford, there are a number of underground lines including the Central and Jubilee lines, as well as the Docklands Light Railway, the London Overground line and national rail services, which all intersect there. So, there is already a very sophisticated network of suburban and national rail systems in place."

Burdett's view is that the Olympic site legacy should be seen as part of a wider "re-balancing" of London since the 1970s, of which Canary Wharf, also out the East, is the most obvious example. In this respect, he believes that the redevelopment in and around the Olympic Park would have happened in time anyway. He points to the planning permission gained, three years before London won the Games, for what is now the Westfield London Shopping Centre. The process would, however, he concedes, have taken longer.

"So, the market, you could say, had already identified, as the market always does, that this was an area of opportunity in which investment could be made and where there would be a good return," he says.

Enlightened planning

Burdett also speaks of 'hotspots' throughout London.

"The thing to imagine is that there is not just one hotspot or major focus in Stratford," he explains. "There are several around East London, all of which have ripples that overlap. The ripple from Canary Wharf, which is not that far away, extends towards Stratford, and the Stratford ripple will extend south and north and east.

"Where this will critically have an impact is in the immediate four boroughs where the Games were located: Newham, Hackney, Tower Hamlets and Walthamstow," he adds. "Now, these boroughs have actually got within them some of the most deprived wards and the smallest electoral units, not just in London, but in the whole of England.

"London’s new regulations require that 30–40% of new housing stock in any reasonably sized housing project should be affordable."

"There are parts of this area of London that have worse levels of health, higher unemployment, a higher number of teenage pregnancies and a lower life expectancy than Glasgow or some of the really tough areas of Liverpool or Manchester. So, it is in terms of issues like these that the legacy of the Games will be felt most."

This, asserts Burdett, is what the regeneration promised for the Olympic legacy is all about. He notes with satisfaction that planners have sought not to create the 'on-off' switch that he characterises as gentrification. London's new regulations require that 30-40% of new housing stock in any reasonably sized housing project should be affordable.

"That word 'affordable' is a very mixed bag," Burdett says. "But it goes from literally getting a housing subsidy, if you earn less than £15,000 a year, to being able to get some sort of subsidised rent or even part-purchase."

Burdett views this obligation as a relatively enlightened planning regulation that the market and the public sector understand and work with.

"It does London proud in that it doesn't just create large amounts of middle-class, yuppie housing and nothing else," he says. "I have been involved in the design of the individual units, and much thought has been given to exactly how to mix owners and tenants of diverse family sizes with people who are perhaps going to live in the neighbourhood for only two or three years."

Short-termist threat

The Olympic legacy plan is clear, but Burdett remains wary of pitfalls over the next two to three years.

"It does London proud in that it doesn’t just create large amounts of middle-class, yuppie housing and nothing else."

"My real concern is that, once the spotlight has been turned off - once it isn't politically cool to be focusing on this part of East London - will we start doing what happened in the Thatcher years, or even the initial part of the Blair years?" he explains. "That is to say, will we start selling the family silver?"

He stresses his discomfort over the possibility that too much emphasis may be placed on, as he puts it, "maximising receipts, rather than maintaining quality". While this is something for the UK Government alone to determine, Burdett claims that the rumour mill has started up.

"What I hear is that people are saying, 'OK, we've now spent all this £9.3bn, let's get it all back as quickly as we can'," he says. "If that were to happen, I think it would be an extraordinary case of short-termism and a negation of the entire process that we've invested in."

Despite the success of the London Olympics, there are concerns that its legacy will not result in the revitalised communities that were at the heart of the Games' bid.
"I set up the Olympic Park Legacy Committee so that we now have plans that leave no white elephants in London, ensuring a lasting legacy." Boris Johnson, Mayor of London.
Mark Wynne Smith is global chief executive officer of Jones Lang LaSalle Hotels, Responsible for a team of more than 280 hotel experts worldwide, he has had extensive involvement in the structuring and successful closing of hotel portfolio sales, and currently focuses on corporate M&A, portfolio and trophy asset sales.
Keith Williams became British Airways chief executive in January 2011. Previously, as CFO, he helped the airline to its 2007 record operating margin, steered BA through the recession and masterminded a solution to its long-standing pensions deficit. Williams is also on the board of parent company International Airlines Group.
Ricky Burdett is professor of urban studies at LSE, and director of LSE Cities and the Urban Age programme. He was chief adviser on architecture and urbanism for the London 2012 Olympics, and an adviser to the Olympic Legacy Park Company. Prior to this, Burdett advised the Mayor of London on architectural matters.