LA City Council endorses 2028 Olympics bid, accepting responsibility for any cost overruns – Los Angeles Times
Rushing to meet a deadline imposed by Olympics officials, the Los Angeles City Council voted Friday to endorse a bid for the 2028 Summer Games even though council members acknowledged they were acting without complete information.
The council’s unanimous decision will put tax dollars at risk by making the city responsible for any shortfall if the massive, $5.3-billion sports event goes over budget.
“We are the only city that has two successful Olympics – that’s what I look to,” Councilman Gil Cedillo said during an ad hoc committee meeting before the vote. “You can tell me other cities haven’t been successful. That’s not us.”
There is much at stake, even though the Olympics are often planned and operated by private organizations, the International Olympic Committee demands that host cities sign a contract agreeing to serve as a financial backstop.
The LA 2028 bid committee has said it can stage the Games without public money, covering all costs through corporate sponsorships, ticket sales and other revenue sources.
Bid leaders had initially sought to win the 2024 Summer Olympics, providing a detailed budget and independent analysis that council members approved earlier this year.
But then, in July, the IOC took the extraordinary step of deciding to name two winners in the 2024 competition between L.A. and Paris. Paris will now go first, followed by L.A. four years later.
Olympic leaders asked L.A. to provide updated 2028 financial guarantees in advance of the official selection in mid-September. That expedited schedule did not give LA 28 time to prepare a revised budget for City Council members to scrutinize.
At the crowded and often contentious ad hoc session, critics voiced concerns about moving too quickly on a project they worry will negatively impact low-income workers and the homeless community, among others.
“Look, there’s 11 years before the Games, so it wouldn’t hurt if they took a year or even six months instead of rushing,” said Jed Parriott, an organizer of the NOlympics LA group. “The whole process feels like a giveaway to the IOC.”
LA 28 officials have said they will not make any significant changes to their 2024 plan, which state analysts described as “fairly low risk” because it will use existing venues such as the Coliseum and Staples Center rather than having to build expensive stadiums and arenas.
“I have some of the same concerns that everybody else does. The infrastructure, the financial impact,” said Olympic diver Greg Louganis, who has worked closely with the LA 28 campaign. “We have so much time, I’m very optimistic we can work those issues out.”
Earlier this week, a report by the City Administrative Officer and Chief Legislative Analyst stated that committing to the Olympics more than a decade in advance would bring “greater uncertainty.”
An unforeseen economic downturn could hurt domestic sponsorships and ticket sales, which represent about 60% of revenues LA 28 would need to cover the $5.3 billion in estimated costs.
Still, the CAO-CLA recommended that council members endorse the 2028 bid because of several factors designed to “mitigate the added risk.”
The IOC has agreed to increase its contribution from an estimated $1.7 billion to as much as $2 billion. It will also give L.A. a $180-million advance on that amount, with an estimated $160 million of the payments earmarked for youth sports programs.
LA 28 could save tens of millions in waived Olympic fees and will not have to pay the IOC a customary 20% of any surplus should the Games turn a profit, which they did when L.A. hosted them in 1984.
The bid committee has said it will purchase a series of insurance policies and set aside 10% of estimated costs in a contingency fund to cover overruns.
Follow @LAtimesWharton on Twitter