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Not So Fast LA! Let’s Consider the Real Costs of Hosting the Olympics before We Jump In

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SPORTS POLITICS-On Monday, Boston withdrew from its offer to be the nation’s bidder for the 2024 Summer Olympic Games. In January, Los Angeles finished second to Boston when the U.S. Olympic Committee made its decision. 

After Boston was selected to polish up its bid before submitting it to the International Olympic Committee for a final decision, there was a public backlash. 

The end came when Boston’s mayor refused to sign the host-city contract because it required the city to be responsible for cost overruns, which occur with every Olympic Games. 

In January, I wrote a column for CityWatch that called for sober analysis of the pros and cons of Los Angeles hosting the event. That, and any public hearings about the possible bid have never occurred. 

Given what just happened in Boston, it’s easy to see why those who want Los Angeles to take over as the nation’s bidder don’t want any public discussions. 

Here is my column from January. It’s still relevant.

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Los Angeles Won’t Host the Olympics in 2024.  Good!

Greg Nelson

The decision for Los Angeles to compete for the 2024 Summer Olympic Games was an easy one. Then-Mayor Antonio Villaraigosa and the business leaders who would benefit most just decided to do it.  

The second step was equally as easy – get the City Council to endorse the idea. Pumped up with city pride and probably some testosterone, the council cast a unanimous supporting vote just one week (the legal minimum) after the motion was submitted. 

And there wasn’t the slightest attempt to have a public discussion about it. 

At least Los Angeles never promised public hearings.  In Boston, the city that will compete internationally for the Games, public meetings were promised and forgotten about. 

Even if we all agree that it was okay for the council to ignore that part of the City Charter that requires that neighborhood councils be given a reasonable amount of time to discuss and weigh in before decisions are made, if anything the City Council ever does cries out for a public discussion it is a proposal of this magnitude. 

Hosting the Olympic Games may seem intuitively to be an event that would boost any city’s economy.  The firms that were hired to prepare the economic projections made sure we had the carefully-varnished numbers that prove it.  

The problem is that these reports, the ones that are used to support the bids of the other cities, are always ginned up with numbers that overstate the benefits and understate the costs. 

It’s an extreme example, but following the financial disaster that was the 1976 Montreal Olympic Games, Los Angeles was the only bidder for the 1984 games. 

Montreal officials projected the cost of the event at $124 million, but it ballooned to $2.8 billion.  It took 30 years to pay off the debt, so the real cost was closer to $10 billion. 

Athens and Greece estimated that the 2004 games would cost $1.6 billon. The loss was $16 billion, and it played a role in the country’s severe debt crisis that followed. 

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In 2005, London estimated the cost of hosting the 2012 games at $3.8 billion.  The total costs have been estimated at over $14 billion.  

Already, Brazil has increased its infrastructure budget for the 2016 Games by 25 percent to $24.1 billion, and don’t forget that it just built some new stadiums for the World Cup. 

San Francisco’s losing bid this year, and Boston’s winning bid, estimated the costs at about $4.6 billion. Andrew Zimbalist, an economics professor at Smith College, said that number wasn’t credible.  He simply pointed to the costs of the last 10 or so Games. 

It’s the same sad story again and again. 

The official profit and loss numbers released by the organizing committees only reflect its own direct costs.    

What’s usually not counted are the costs to taxpayers for fixing streets, building housing for the athletes, constructing venues, improving transit systems, etc.  

That may not be a bad deal if the improvements that are important to you are on the list. But it realistically guarantees that the projects that are needed most won’t necessarily be touched. In fact, taxpayer money will be diverted away from them.

In London, those extra expenses included the likes of paying off the unions not to go on strike, and bringing in the military when the security contractor couldn’t hire the required number of qualified people. 

If local police aren’t paid overtime, they are at least diverted from other duties. 

Perhaps the most serious flaw in the build-to-suit economic reports is that they list the infrastructure projects as benefits of the event, and not expenses for the taxpayers. 

What government always overlooks in its zeal to spend public money for the Games is what else it could have used the money for, such as building hospitals, schools, or providing incentives to help businesses grow and create jobs. 

Zimbalist is supported by other independent experts in concluding that there is “scant evidence” that huge sporting events like the Olympic Games have a positive economic impact. 

What can be done now, before the next bid is attempted, is for the city and/or county to commission a truly independent analysis of the costs and benefits of hosting the Olympic Games in the Los Angeles area so we can have fruitful public discussions. A little bit of transparency and honestly shouldn’t hurt. 

If hosting the Olympic Games will truly benefit the public, then proving it to them should be easy.

 

(Greg Nelson is a former general manager of the Department of Neighborhood Empowerment, was instrumental in the creation of the LA Neighborhood Council System, served as chief of staff for former LA City Councilman Joel Wachs …  and occasionally writes for CityWatch. He can be reached at [email protected].)

–cw

 

CityWatch

Vol 13 Issue 62

Pub: Jul 31, 2015