Would an 11-year wait for the Olympics lead to greater risks for LA? – Los Angeles Times
For several years Los Angeles city leaders have focused on winning the 2024 Summer Olympics, supporting a $5.3-billion plan to host the event seven years from now.
Those seven years might soon turn into 11, after the International Olympic Committee’s recent decision to award the games to both Paris and Los Angeles, with one city getting 2024 and the other 2028.
L.A. Mayor Eric Garcetti said Wednesday that Los Angeles appears unlikely to be selected for 2024. But the IOC is making the later date “financially so attractive, we would be stupid not to take 2028,” Garcetti said at a BuzzFeed event in Rancho Palos Verdes.
The longer window could prove helpful to L.A. — giving the city more time to complete the Purple Line subway to the Westside and perhaps providing leverage to extract concessions from the IOC. It might also mean the value of sponsorships and other revenue sources could increase.
But experts familiar with Olympic bidding say an 11-year wait could present both economic and political hazards. Some have expressed concern that the public won’t have time to scrutinize a revised deal before the city must sign a host contract.
“Whoever is taking the 2028 Games is taking a much greater risk,” said Zev Yaroslavsky, who served on the City Council during negotiations for the 1984 Summer Olympics. “There’s more economic uncertainty.”
For example, it’s difficult to predict ticket revenue for an event 11 years out, Yaroslavsky said.
As Los Angeles and Paris bid negotiators work with the IOC to decide which city will go first, a Garcetti spokesman said the city is financially protected.
“Mayor Garcetti does not believe that waiting four more years would increase our risk profile,” spokesman Alex Comisar said. “Whether we host in 2024 or 2028, our low-risk plan remains the same — using existing infrastructure, and controlling costs.”
Paris bid organizers have dismissed the idea of waiting four additional years. Paris also has a possible advantage for 2024 because that year marks the 100th anniversary of the last time the City of Light hosted the Games.
The budget released by LA24 — the bid committee — for the 2024 Games was called “substantially reasonable” in an independent analysis by the accounting firm KPMG.
Relying on existing venues such as the Coliseum, Staples Center and Pauley Pavilion, L.A.’s proposal is a “low-cost, low-risk approach,” according to a state Legislative Analyst’s Office report.
The mayor and City Council formally backed the bid earlier this year, but that agreement was specific to the 2024 Games. City leaders would have to authorize acceptance of the 2028 Games, Chief Legislative Analyst Sharon Tso said last week.
That process should also reopen discussions at City Hall over how the event will affect the city and its residents, said Jonny Coleman, an organizer with NOlympics LA, a local group opposed to the Games.
“You don’t get to just cross out ‘2024’ and replace it with ‘2028,’” Coleman said. “You actually have to renegotiate it with the public.”
Garcetti said Wednesday that details about a possible bid for 2028 would be released next week.
With an IOC selection announcement coming as soon as August and a formal signing ceremony possibly set for September, there may be little time to consider a new deal.
A key issue for Olympic host cities has always been cost overruns.
Los Angeles, as the only viable bidder for the 1984 Games, had leverage over the IOC allowing it to escape responsibility for cost overruns. L.A. voters also had passed a charter amendment barring city leaders from using taxpayer funds to cover such costs unless they were reimbursed.
L.A. wasn’t able to drive such a hard bargain for 2024. The city agreed to cover the first $250 million in extra costs, the state the next $250 million, with the city responsible for anything above that.
Comisar, Garcetti’s spokesman, said in a statement that refusing to accept financial liability for the 2024 Games “would be a nonstarter for the IOC.”
Given of the prospect of a 2028 Olympics, a July Legislative Analyst’s Office report on L.A.’s bid questioned whether the state’s $250 million guarantee was enough.
“Put simply, due to the time value of money, $250 million from the state will buy less stuff in 2028 than it would in 2024,” the report noted.
The report, which studied a recent IOC evaluation of L.A’s bid, noted that many Olympic events will take place at privately owned venues, where rental costs could rise in coming years.
Other expenses are also expected to rise.
For instance, the LA24 committee budgeted about $84 million for city services during the 2024 Olympics. Those services, such as police overtime, could be more expensive in 2028.
At the same time, an IOC study shows that global Olympic sponsorships have become more lucrative over time.
The 2024 Host City Contract — the binding agreement that the city must sign if it is picked by the IOC — is publicly available. The agreement for 2028 hasn’t been released, an IOC press representative said in an email.
The representative called the dual award bid a “unique situation” and said the “IOC is currently working on getting the relevant documentation ready.”
An IOC poll found that 78% of L.A. residents are in favor of the Games coming back to the city, which hosted them in 1932 and 1984.
Waiting until 2028 allows more time for possible opposition to build against the games, said Andrew Zimbalist, an economist at Smith College in Massachusetts. “The support base could fracture,” he said.
Overall, he believes L.A. has a low-risk plan for the 2024 Games, which protects it against the massive cost overruns seen in other Olympic host cities.
Rio de Janeiro was left with a reported debt of $35 million to $40 million from the 2016 Summer Games. Tokyo’s $6.6-billion planned budget to host 2020 Games has already doubled.
L.A. city leaders say they’re satisfied with planned protections against cost overruns, which include approval over contingency fund spending and an array of insurance policies.
LA24 budgeted $89 million for insurance premiums, committee spokesman Jeff Millman said. Before Boston dropped out of the 2024 bidding, that city’s committee reportedly budgeted $128 million for insurance premiums, while Chicago set aside $66 million in its unsuccessful 2016 bid.
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.
