Mayor clears hurdle over Olympics site

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The London Mayor Ken Livingstone's problematic mission to clear a 500-acre industrial site for the London Olympics in 2012 has received a boost after the largest of the companies situated there agreed to move.

Sortex, a Swiss-owned firm with 200 staff which makes industrial sorting machines, has agreed a compensation package with the London Development Agency, which handles property deals for the Mayor.

Both parties had planned to make the announcement in the new year in a move bound to put pressure on the refuseniks - about 280 businesses - to settle with the LDA.

The LDA will pay for Sortex, twice winner of the UK exporter of the year award, to leave its premises at Lower Lea Valley in Stratford, east London, for a plot at Royal Albert Docks near City airport in the Docklands. The company hopes to complete the move before October 2007.

"The deal was concluded last Thursday," Sortex's managing director Bruno Kilshaw said. "I feel lucky but have sympathy for the other neighbouring businesses who do not have the same profile as us." He said he was not permitted by the LDA to reveal the terms of the deal.

As the largest of the businesses that need to move before the site is cleared forbulldozers in July 2007, Sortex was under the greatest time pressure. Its managers advised a deal was needed in July 2005 to relocate with minimal disruption.

The LDA recently increased its budget for relocating the businesses to about £1bn after complaints their valuations were too low and there was a scarcity of alternative sites nearby.

Businesses have been required to respond to the compulsory purchase orders issued by the LDA. The Government Office for London, which handles the complaints, said 25 per cent of businesses had raised objections to the conditions of the CPOs - about 200 of the 800 plots concerned.

FH Brundle, a steel components factory with 40 staff on the Bow Industrial Park, has purchased a site 11 miles away in Rainham, Essex, but has not agreed terms with the LDA. Its owner Richard Brundle said he faced a £1m deficit between the cost of his new, larger premises and the LDA's evaluation of his current one. "It is a risk to buy a new factory without agreeing a deal with the LDA but we have to proceed otherwise we will not be ready in time to move."

The relocation of businesses in Lower Lea Valley and Marshgate Lane is the biggest CPO project in recent memory.