The Olympic Delivery Authority (ODA) and Lend Lease are rushing to finalise a deal over the troubled London 2012 athletes village this week.
Lend Lease, the Australian property developer, had agreed to finance the £1bn village in exchange for reaping the profits on the sale of the apartments post-2012. But turmoil in the debt market meant it was unable to raise the money from banks to fund the deal.
The ODA is now going to underwrite the project, and at a board meeting last Thursday it decided that Lend Lease would only be involved in the deal "on a professional services basis", said a source.
This means Lend Lease will be hired to oversee the village's construction but not brought in as an equity partner – meaning the Government, through the ODA, will get the returns from later sales.
Leading ODA board members, such as chairman John Armitt, are understood to be pushing for a "heads-of-terms" agreement to be signed by Thursday.
This would not be a final contract, which will be signed by the end of the year. If the finance markets improve, Lend Lease would be allowed to pump equity into the construction of the 3,300 homes. The ODA and Lend Lease would then, in essence, become joint owners.
An ODA source said: "We want this sorted out very quickly. The big item was to get the village on track."Reuse content