by Ted Tripp
Public support for the 2024 Boston Olympics has plummeted since the non-profit No Boston Olympics (NBO) has ramped up its efforts to educate one and all about the financial risk the Games could inflict on taxpayers.
The rosy proposal that Boston2024 sent to the U.S. Olympic Committee in 2014 was gleefully accepted and announced by the press, especially since the $14.3 billion price tag did not include any state or local taxpayer funding. In January 2015, when it looked like Boston would be chosen by the International Olympic Committee, a WBUR poll showed voters inside the 128 beltway supported the Olympics idea by a margin of 51% to 33%. Fast forward to March, and that support had reversed to 36% in favor and 52% opposed. Much of this change has been because of the information efforts of No Boston Olympics founders Liam Kerr, Chris Dempsey and Kelley Gossett.
They have brought to light many of the dirty little secrets about the Games that the public generally doesn’t know. For example, the IOC requires that the host community guarantee funds to make up for any overruns. That means the taxpayers are on the hook whether they like it or not.
NBO also cites a June 2012 University of Oxford cost study which shows that every Olympic Games from 1960 through 2014 had cost overruns with 100% consistency, with an average overrun of 179% (2.8x). In 2005, the London organizers of their Olympics bid submitted an estimated cost of £4.2 billion to the IOC. In 2012, The Guardian newspaper said it had identified spending for the Games of around £11 billion. In 2004, Lord Sebastian Coe said “Not a penny of the budget will be drawn from the public purse.” In 2013, The Guardian reported that more than £400 million of lottery money diverted from good causes to pay for the Olympics is unlikely to be repaid for decades, if at all, charities fear.
Other promises by the London Olympics were never fulfilled. The proposal included 9000 new homes to be built with a
Promises of Olympic Proportion, page 12
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target of 50% to be affordable housing. In reality, the London Olympic Village created only 2818 new housing units and fewer than half were affordable. The mayor of London pledged the Games would get nearly 6500 long-term unemployed workers back into the workforce. By mid-2013, fewer than 3000 had been hired and only a fraction had held onto those jobs for six months or a year.
You can see there is a huge gap between the bid projections and eventual reality, with the taxpayers/citizens suffering the consequences years after the Games are gone.
A detailed analysis by NBO of the Boston2024 bid seems to show that the projected revenue is too optimistic with a lack of detail where it is coming from. In addition, the cost of building the venues seems to be on the low side compared to some other Games. The bid also projects $1 billion as the cost for security, while some experts have suggested it could go as high as $1.7 to $2 billion. While the federal government might cover most of this cost (not guaranteed), local governments could be liable for indirect costs such as police details and overtime.
As it stands now, the Boston2024 bid to the IOC looks like a blank check, thanks to the taxpayers:
Fortunately, if our political leaders and the people (and the IOC) eventually decide to have the Olympics here in Boston, NBO has three recommendations to modify the Boston2024 bid to protect the taxpayers and assure money raised is well spent:
Problem: The IOC selection process benefits the IOC and bidder groups, but not the host community.
Solution: Reject the public financial guarantee, as Los Angeles did in 1984.
Problem: Boston2024’s budget margins are razor thin – no room for error.
Solution: Withhold the $600 million payment to the USOC (for marketing/promotion) by putting it into an escrow account to be paid only after all promised mitigation is implemented.
Problem: Boston2024 could have a huge impact on the civic agenda for the next decade, yet there is no formal oversight or accountability.
Solution: Set up an independent watchdog organization with full auditing powers to follow Boston2024’s plans, milestones, achievements and aftermath.
For much more information and financial data at No Boston Olympics, go to www.nobostonolympics.org.
by Ted Tripp