British gov’t to own London 2012 Olympic Village after recession forces $491M bailout

British gov’t to own London 2012 Village

LONDON — The British government put another $491 million of public money into the Olympic Village for the 2012 London Games after being unable to secure private financing because of the recession.

The government said Wednesday it could have accepted a private bid for the project, which includes 2,800 apartments, but the offer was too low.

“Ministers have decided that the Lend Lease deal is not in the best interests of the taxpayer and that it would cost more public money in the long term,” the Department of Culture, Media and Sport said in a statement.

The government already dipped into its the contingency in January to allocate an extra $477 million for construction of the village. The entire village project is to cost about $1.51 billion, with the remainder coming from bank loans and housing grants.

With the village now publicly owned, the government will receive any profit when the complex is sold after the Olympics. It will house 17,000 athletes during the games.

The government anticipates recouping all the money it committed Wednesday, the majority of which comes from its $3 billion contingency fund. The government has spent about $910 million of the contingency fund built into the $14.1 billion total budget for the Olympics.

“By funding the entire project, the village will become publicly owned and the public purse will receive substantial returns from sales,” Olympics minister Tessa Jowell said.