Chicago’s bid for 2016 Olympics leaves pricey legacy 7 years later – Chicago Tribune
Chicago’s Washington Park was nearly empty on a recent Friday afternoon as Bronzeville resident Rosemary Jarrett power-walked her usual five laps around the perimeter of the graceful meadowland where a temporary Olympic stadium could have risen this summer.
The 52-year-old crossing guard shook her head at the memory of the city’s failed bid for the 2016 Summer Games. She had opposed it back then, she says, because she found everything to be alarmingly temporary — temporary jobs, temporary venues, temporary peace in a city plagued by gunfire.
“I’m relieved we didn’t get the Olympics,” she said. “We have too much violence, too many problems. Why would we want the rest of the world to witness it?”
Come August, a downtrodden Chicago will watch the Summer Games taking place in Rio de Janeiro — an in-your-face reminder of what could have been had then-Mayor Richard M. Daley been able to pull off his high-octane push for the 2016 Olympics.
Daley and his lead salesman, insurance titan Patrick Ryan, touted the enterprise about a decade ago as a way to polish Chicago’s image on the world stage and create thousands of jobs as facilities were built in some of the city’s neediest neighborhoods — a point of view still held by some civic leaders. But for a city with a hobbled public school system, a massive debt load and a soaring homicide rate, the prospect of spending an estimated $4.8 billion in private and public money on an Olympic Games looks far less appealing to many now than it did in 2009 when Chicago lost its bid.
“As a city, we might be in trouble, like Rio is in trouble,” said Cecilia Butler, president of the Washington Park Advisory Council, a liaison between residents and the Chicago Park District. “The trouble they are in is really unimaginable.”
Preparations in Brazil have been marred by polluted waterways, faulty construction, the mosquito-borne Zika virus, and the country’s political and economic upheaval. In June, the governor for the state of Rio de Janeiro declared a financial state of emergency that threatens a total collapse in public security, health and transportation in the lead-up to the $12 billion Summer Games.
Mounting Chicago’s bid was an expensive but privately funded endeavor. Nearly $76 million was raised from donors, who also kicked in $16 million worth of goods and services.
But it left a pricey legacy for taxpayers. The city is on the hook for about $140 million in principal and interest on the purchase of property for an Olympic Village to house athletes, and it was saddled with costly, 10-year union contracts that were hammered out to ensure labor peace during the Games.
A report by the city’s inspector general, in the waning days of Daley’s administration, found the 34 union pacts “unduly hamstrung not only the current management of city government, but the next six years of management as well.” The deals were made in 2007, shortly before the country’s economy cratered and the public realized the depth of the city’s own financial woes, leaving it with little flexibility to reduce labor costs as it dealt with a massive deficit.
The restrictive deal prompted Inspector General Joseph Ferguson to recommend that the city pass an ordinance limiting labor deals to no more than four years, though the City Council so far has ignored that suggestion.
Perhaps the bid’s most lasting legacy will be even more expensive.
Eager to lock in property for an athletes’ village, the Daley administration agreed in 2008 to pay Medline Industries nearly $2 million per acre for the former Michael Reese Hospital site even as the economy and housing market were tanking. The city planned to resell the 49-acre Bronzeville parcel to a developer who would build apartments for Olympians, then convert the housing into a mixed-income residential community after the 2016 Summer Games.
The city had five years from the time the deal closed in 2009 to resell the land before any payments came due. Today, the tract west of the McCormick Place truck yards remains vacant and in city hands. A nearby parcel recently sold for $300,000 per acre.
“This inherited deal was a bad one for taxpayers,” Peter Strazzabosco, the deputy commissioner of planning and development, said in a prepared statement. “Mayor Rahm Emanuel is taking steps to ensure taxpayer exposure is reduced and to bring the property back to productive use.”
So far, a solution has been elusive and the meter is ticking. Unless the city can pay off the loan in advance, it ultimately will pay nearly $50 million in interest on a $91 million purchase. The financially strapped city used short-term borrowing to cover the deferred interest payments from the first five years of the deal, then used long-term bond proceeds to repay that borrowing.
“This is analogous to using credit cards to pay off a credit card,” said bond expert Brian Battle, director at Performance Trust Capital Partners.
Emanuel’s administration said that since 2015, quarterly payments on the Reese property have been made from the operating budget.
But no workable redevelopment plan has surfaced.
Laurence Msall, president of the Civic Federation, a government watchdog group, called on the city to publish plans for the site “because the city is paying extraordinarily large amounts of interest on the loan.”
The city is finalizing plans to solicit development proposals this year, Strazzabosco said. The city will seek proposals “that will have a positive, long-term impact on the Near South Side, the lakefront and adjacent neighborhoods,” he said in a written statement.
If Chicago had won the bid, the sweeping property, in theory, would now boast 21 high-rises, a focal point in a city that would have looked and felt immensely different this summer as tens of thousands of visitors poured in from around the world.
On the South Side, an 80,000-seat temporary stadium was supposed to dominate historic Washington Park. On the West Side, Douglas Park was to sport a cycling facility. At the downtown lakefront, Monroe Harbor was envisioned as a rowing venue and Northerly Island as a canoe/kayak slalom course. A new tennis center was expected to augment Lincoln Park.
The bid team said contributions from wealthy donors, corporate sponsorships, television rights and ticket sales would cover costs. But hundreds of millions of dollars in local, state and federal tax money also had been earmarked for the Reese land purchase, some venue construction and security.
The city agreed to an unlimited financial guarantee to cover any losses but said it would be protected by an array of insurance plans — an innovative approach that won support from the Civic Federation, and that later was used as a model by Boston for its 2024 bid. Boston’s bid was dropped last year in the face of strong public resistance.
About Us
Free Shipping
If your order is $35 or more, you may qualify for free shipping. With free shipping, your order will be delivered 5-8 business days.
