2 Evaluating the value for money of
the deal
6. English Partnerships estimated the current market
value of its 170 acres of land incorporated in this deal at £170
million, or £1 million an acre. The equivalent value of the
48 acres occupied by the Dome might therefore have been in the
region of £48 million, but in the view of the Department
and English Partnerships they would not be able to realise this
value by simply demolishing the Dome and building on the vacated
site. Other factors led them to conclude that it would be better
to preserve the Dome. [6]
7. The London Borough of Greenwich made it clear
that they regarded the Dome as an iconic building giving recognition
to the Peninsula. If there had been any suggestion of taking it
down the Borough would have sought to have it listed. In the longer
term, beyond 2018, the Borough would have to consult locally if
there was any suggestion of taking down the Dome and using the
site in some other way.[7]
But by 2018 the Department and English Partnerships expect there
to be more clarity over things like a new third river crossing,
together with evidence on whether the Dome has been successful.[8]
8. The Department and English Partnerships did not
deny that there would be some opportunity cost in retaining the
Dome. But in their view the assumed £48 million value of
the land occupied by the Dome was not money lost to the taxpayer.
The current Meridian Delta scheme was a dense one that would use
the capacity of the Peninsula up to the maximum level within the
known transport constraints. Any proposal to increase further
the amount of residential development on the site of the Dome,
if the structure had been demolished, would not have been permitted
because of the increased movement of traffic at peak hours. Although
demolition might appear to free up an area of land for further
valuable business uses, it would not in fact have created additional
capacity on the Peninsula for such uses. The Blackwall tunnel
was already at peak capacity during rush hours, and all that would
have been possible was a redistribution of the total amount of
space now given development consent. The deal yielded the maximum
possible development because traffic to and from the Dome would
take place at different times to peak rush hours for occupiers
of homes and offices on the Peninsula. And the Mayor of London,
in deciding not to direct refusal of permission for the scheme,
stated that "there is no doubt that the plan seeks to maximise
land use opportunities on the Peninsula".[9]
9. Finally, the cost of any demolition of the Dome
after 2018, currently estimated at £19 million, would fall
to the private sector, as opposed to a burden on the taxpayer
which would be the case if the Dome were demolished now.[10]
10. There are various elements in this scheme which
may generate future profits to the taxpayer, but which English
Partnerships did not assume when evaluating the deal. For example
the extent to which there might be a share in future profits from
the Dome Arena and Waterfront is uncertain. Also in 2003 the Anschutz
Group expressed interest in placing at the Dome one of the eight
large Regional Casinos proposed in the government's draft Gambling
legislation. At the time of Meridian Delta's original proposals
there had been no discussion on casinos. A casino would require
both planning permission and a licence under the recently enacted
Gambling Act. The Government has indicated that there will only
be one Regional Casino, and it is not yet clear whether the Dome
will be successful in obtaining a licence. The Department has
no firm view about whether a casino would be a positive or negative
factor in terms of value to the deal. It is not party to any related
negotiations with the Anschutz Entertainment Group, but recognises
that Anschutz are pursuing it because they expect it to increase
their profits, in which English Partnerships would take a 15%
share after the operator had made a prior return. English Partnerships
have not however assumed any return from a casino.[11]
6 Qq 33-35 Back
7
Qq 36-37 Back
8
Qq 41-43; Ev 13 Back
9
Qq 81-83; Ev 13 Back
10
Qq 51-55 Back
11
C&AG's Report, para 3.20; Qq 89-93, 99 Back
| 
