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In 1996, the Greenwich peninsula in London was practically worthless. The largest gasworks in Europe had stood on it for a century, 240 acres of coal, coke, tar and chemicals, making the gas that lit the city and sinking the by-products into the soil where they were made. Genius. North Sea gas destroyed the industry; the works closed, and what remained was riverside land in a world city no buyer would touch, because cleaning it would cost more than it would ever be worth. So, essentially, worthless.
I went to the Dome in 2000, when I was 10, and somewhere in a family album there is a photo of me standing next to the James Bond jet boat, which, as we all know, is the coolest thing ever made to a boy who hadn’t yet discovered girls. I was wrong, as 10-year-olds are, but I was wrong like the adults. Everyone in the building that year was looking at what was in the tent. What was really worth inspecting was what we were all standing on.
By then the ground had been fixed, and 3 bills had paid for it. In 1997, English Partnerships, the government's regeneration agency, had bought about 300 acres of the peninsula. Between 1997 and 1999, roughly £225m of public money went into decontaminating the soil, and a similar sum made it traversable from the rest of the city: North Greenwich station opened on the Jubilee line in 1999, the peninsula's first passenger railway. By 2000, the Dome had cost £789m, most of it lottery money. Then, when the year ended, the exhibition shut on schedule, and by 2001 the empty building cost about £317,000 a month, a decent house in Wandsworth at the time, paid for by public money, just to keep the doors closed.
Ask any gilet’d estate agent near the M25: when a new station opens, every flat within walking distance gets more valuable overnight. The taxpayer buys the station. The landlord next door collects the benefit. It happened along the whole Jubilee line in 1999, a gift from every taxpayer in Carlisle and Swansea to anyone who happened to own property in Bermondsey or Canning Town. The same thing happened at Greenwich, on a scale nobody had tried before, with one difference: this time the public was the landlord collecting the windfall. We owned the deeds.
In true bureaucratic fashion, the government only discovered what it owned when it tried to sell the Dome. In September 2000, the Japanese bank Nomura, bidding £105m, walked away. Its dealmaker, Guy Hands, had asked for a list of what he would be buying: the assets, the contracts, the intellectual property, but no such list existed. Which is staggering.
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A PricewaterhouseCoopers report found what the papers called a ‘Black hole in the finances’, I know, shocking… and Nomura wasn't allowed to read it.
The National Audit Office later set out the state of things: 1,350 supplier contracts had never been reviewed, sponsors claimed the contents of the zones they had paid for, and the asset register could not be warranted. The most famous building in Britain could not prove what it owned. A second bidder, Legacy, came and went by February 2001.
David James, the executive chairman brought in to mop up this disaster, was asked in 2000 who would eventually buy it. "They're going to make a killing on this place, and I envy their position." The seller said that publicly, during the sale, and he could afford to, because he never thought he'd make a killing on what he was selling. The tent was a liability anyone could see. The killing was waiting in the ground it stood on.
The deal that finally happened, in 2002, was shaped by everything that had just gone wrong. Meridian Delta, a company formed by the developers Lend Lease and Quintain (a name with all the romance of a filing cabinet), took the Dome and the surrounding land, working with American billionaire Philip Anschutz's entertainment group, which would turn the tent into a venue. There was no price.
No money changed hands up front. The land would be developed over more than 20 years, and the public would be paid out of the profits as they came.
My favourite clause sits in the Public Accounts Committee’s 2005 report on the sale: around 100 acres beyond the original offer “were not explicitly advertised.” English Partnerships put 68 acres on the market. Yet somehow, the deal included 170 acres. The difference was over 100 acres of cleaned, connected riverside that nobody outside the negotiation ever saw offered for sale.
To be fair to the people who signed it, they held a weak hand, and the auditors knew it. Two sale processes had collapsed. One bidder remained. The building was eating £317,000 a month in 2001, and the NAO's 2005 verdict broadly accepted that the deal was reasonable in the circumstances, while the Public Accounts Committee allowed itself one cooler sentence: "It is difficult to be confident that the deal which was finally secured offered the best value for money."
Which is auditor for ‘we really dropped the ball here…’
Nobody in this story is a cartoon, though it would make more sense if they were. The buyers took a real risk: converting the tent into a venue would swallow hundreds of millions of their money before a single ticket sold, as anyone in show business will tell you, thems the breaks.
In 2002 nobody knew whether anyone would ever get off a train at North Greenwich for fun. The government wanted rid of an embarrassment, a developer wanted land and was prepared to wait 20 years for it, and they agreed on the oldest mechanism available when you find yourself over a barrel: pay nothing now, promise a share later.
‘Promise’ being the operative word here.
In 2002, Lord Falconer, the responsible minister, floated a figure for what the public would get: up to £500m in profits, flowing back to the Treasury as the peninsula built out.
The land was never a scandal, because a scandal needs a figure. The decontamination had one, £225m by 1999. The Jubilee line had one, £3.5bn the same year. The tent had the most famous one in Britain, £789m by 2000, and the country spent 12 months furious about it. The land had nothing. No purchase price, no budget, no overrun, nothing for a headline to hold, so the most valuable thing on the peninsula went through the entire story without a single argument attached to it. Britain is brilliant at knowing what things cost and hopeless at knowing what things are worth.
The photo of me and the Bond boat survives. I am 10 and delighted. The boat went back to the film company when the show closed. The tent spent the next 25 years as a national joke. The ground beneath my dead cool new Nike trainers, cleaned and connected at public expense, went to its buyers with nothing down, in return for a share of whatever they would later say the profits were. The most valuable thing in the photograph was the mud.
Next week, we’ll find out what that promised share was worth.
See you on the next one.
Refs
