Say No to The Olympics in 2024! LA Can't Afford Them

I still fondly remember the 1984’s Olympic games hosted here in Los Angeles. I had been living in LA for three years.  I was young and green and I felt welcomed in this awesome city. Hence, I immediately endeavored to weave myself into the fabric of this very diverse and awesome community.  I managed to understand the forces that were at play in this great city. Indeed, LA’s economic, environmental, social, cultural and political forces all manifested themselves in a beautiful struggle.

I am making my case in this piece that our city shouldn’t be bidding for these games.  As you all know, The US Olympic Committee (USOC) has named Los Angeles as the US bid city for hosting the 2024 games after Boston dropped out.  Los Angeles is currently facing daunting problems and I am concerned about the potential financial burden that hosting these games might bring to our city.

Everywhere I turn, I hear the same arguments that LA hosted the games very successfully in 1984. They go on and tell you that the weather was awesome, the competition was fear, the festivities were great for our city, and that the games elevated LA to the world stage. All that is true.

What is not being said is that all the success achieved didn’t just fall off the sky. The two men responsible for said success: Mayor Tom Bradley and local businessman Peter Ueberroth, Both men provided the vision needed for this major worldwide event.  Clearly, LA doesn’t currently have the leadership of this caliber anymore.
It is important to point out that in 1984, Mayor Bradley and Businessman Peter Ueberroth called for a “budget-conscious” in hosting these games. They were keenly aware of the profound financial failures that the city of Montreal had encountered in 1976. They told Angelinos that what had happened in Montreal was not going to happen here in LA. The City of Montreal was held liable for $1.5 billion, the costs exceeded the projected revenues and the city had to pay for the debt. That had meaningful negative implications in the quality of life of the city of Montreal.

These two LA’s leaders bluntly told the Olympic games’ people that LA was happy to host the games. But, the city was not going to be held responsible for any cost overruns(this term is used when costs exceed revenues). It was a “take it or leave it” proposition. People from the Olympic Games were not happy to hear such proposition and they initially balked. But in the end, Los Angeles was finally relieved from any financial responsibility. And, the rest was history-the 1984’s Olympic Games were an utter success. That was also the only time in history that a city had actually made a dime out of these games. This is not the case now. Mayor Garcetti is bidding for these games and Los Angeles will be responsible for any debt in the event that the projected revenues don’t pan out.

Los Angeles, our leaders have been telling us lately, is the best city in the world. It is not just a city of promise but “a city of tremendous innovation and resilience. Our city is the capital of the pacific and we do things well on the international stage. Los Angeles was cut to host this Olympic games-we did it successfully in 1932 and 1984. And, we should be able to do it one more time.” While I wholeheartedly agree with all these adjectives being used here to describe this great city, I join the chorus of others in this city who persuasively argues that the mayor’s optimism that LA will make a profit in hosting these games in 2024 is disconnected to the reality on the ground.

Some background here. The United States Olympic Committee (USOC) selected Boston last winter to host games. Yes, many Bostonians were elated and were looking forward to witnessing these games in 2024. Nevertheless, After carefully examination by civically engaged citizens and other powerful civic groups, Boston’s mayor decided not to host the games this past July. They projected that unexpected costs were going to exceed revenues-Boston was not willing to take any risk. Immediately after Boston withdrew, the USOC looked at Los Angeles as the best city to host these games. They reached to Mayor Garcetti and urged the LA mayor to bid for these games. The application’s deadline was mid-September the IOC will make announce it in the summer of the next what country will host the games.

The table below is a screenshot taken from the LA24 Bid book presented by the mayor GAMES BUDGET (August 2015)

A quick look at the table above, we can see that the mayor is presenting a proposed contract for total costs of $4.666.2 with the USOC and IOC. The $1.700.0 billion at the far top right is a projection being made by the mayor of the investments made by private organizations. For example, to radically renovate the Coliseum will cost at least $500 million, according to many people familiar with this type of renovation. This will be a sort of private investment needed for this thing to work. USC will have to cough up all the money to convert this stadium into a modern Olympic center. Thus, the overall cost for these games will be at least $5.8 billion [$4.116.2 + $1.7.00] that will not include the contingency and the insurance premium above. The mayor is forcefully arguing that LA will not be liable for anything because after all numbers are computed Los Angeles will actually make $161.1 [net position above] million after broadcast rights, sponsorships, and ticket revenues are brought in. It is interesting that very same projections were made in the Winter Games in Vancouver and in the 2012 Summer Games in London. These two cities encountered major problems in finishing these construction projects

Two problems with the Mayor’s projections above. First, most cities tend to find problems with private investments, when private money doesn’t come in, cities are liable. Second, the mayor’s revenue projections are very small. $161 million out of $4.6 billion is a very small margin and doesn’t give enough room to adjust. What if there were a worldwide catastrophe or a worldwide recession and people are unable to travel and attend these games. LA will be liable for all cost overruns. That means the money will have to come from the general fund to cover these costs. Can we afford to take money out of our public safety programs or to eliminate other vital programs needed int this city? Of course not.

The Mayor’s people argue that it makes a lot of sense to host the Olympic Games of 2024 here in our city. For starters, these people claim that LA has the venues and the infrastructure in place. Nothing can go wrong, security is ready to protect athletes and people, all logistics have been figured out and tested-we will succeed. It is not that easy. Hosting these games requires tremendous efforts from all the different sectors that comprise a city. At least seven years are needed to make sure all centers needed are built or fixed.

In light of the intractable problems facing Los Angeles, can we honestly say that we can host these games? I say no. We have a housing crisis, crime in South Central Los Angeles doesn’t stop, a profound lack of civic engagement among our citizens, and the city still struggles with a faltering and de-industrialized economy that has left many without good jobs. And, we can’t ignore the Grand Canyon-size gap between rich and poor in Los Angeles.

The greatness of our city should not be measured by how many Olympic games we host or how many states of the art stadiums and arenas we build. But how we can help those who have lost hope and live in misery in Los Angeles.

Thank you for reading and Happy New Year to all of you…