Head of Costly London Olympic Stadium Resigns as Inquiry Begins

(Bloomberg) -- The chairman of the public company that owns London's 2012 Olympic stadium has resigned days after Mayor Sadiq Khan ordered an investigation into spiraling costs related to converting the facility into a new home for Premier League soccer team West Ham.

The centerpiece of the successful 2012 games has been controversial from its inception through to the decision to lease it to West Ham ahead of rival bidders. The unexpected additional 50 million pounds ($62 million) required to make it fit for soccer push the total cost of the stadium to 752 million pounds. With that price tag, the stadium ranks as the second most-expensive in the U.K.

David Edmonds, chairman of the London Legacy Development Corp., resigned late Wednesday. Edmonds “helped to steer the organisation through some extremely challenging issues,” said David Goldstone, the group's chief executive officer.

Khan, who was elected in May, said the finances of the stadium had been left in a “total and utter mess by the previous administration.”

Khan's predecessor, Boris Johnson, in 2015 estimated the costs of the stadium conversion at 272 million pounds. Sky News reported that number has now ballooned because of the installation of retractable seats that can be removed when the stadium hosts track and field meets and other events. West Ham, which pays annual rent of 2.5 million pounds, contributed 15 million pounds to the conversion.

‘Poor Decisions'

“There are big questions that need to be asked about how poor decisions were made and what we do going forward,” Khan told Sky.

To make matters worse, West Ham's move to the stadium hasn't been smooth. Crowd violence has marred games played there, notably in a match against Chelsea during which groups of rival supporters hurled coins and seats. The negative publicity comes amid an ongoing search for a stadium naming rights partner.

India's Mahindra Group entered into exclusive talks about a 4-million-pound-a-year deal, only to pull out of a potential agreement, according to the Telegraph.

To contact the reporter on this story: Tariq Panja in London at tpanja@bloomberg.net. To contact the editors responsible for this story: Janet Paskin at jpaskin@bloomberg.net, Kim Robert McLaughlin, Phil Serafino