2028 Games re­quire coun­cil sup­port

L.A.’s Olympics deal de­pends on mem­bers’ fi­nan­cial guar­an­tee, as soon as next week.

Los Angeles Times - - FRONT PAGE - By Dakota Smith

Los An­ge­les of­fi­cials backed an agree­ment in Jan­uary putting tax­pay­ers on the hook for po­ten­tially hun­dreds of mil­lions of dol­lars in cost over­runs from the 2024 Sum­mer Olympics, if L.A. were se­lected as host and un­fore­seen ex­penses arose.

Now that L.A.’s bid com­mit­tee has ne­go­ti­ated terms with the In­ter­na­tional Olympic Com­mit­tee to host the 2028 Games — a deal trum­peted in a splashy event Mon­day at StubHub Cen­ter in Car­son, one of the planned com­pe­ti­tion venues — of­fi­cials must re­peat the process and ap­prove a sim­i­lar fi­nan­cial guar­an­tee to seal the bid.

City lead­ers say they ex­pect to vote on the host city con­tract by late next week — a more ac­cel­er­ated process than the one for the 2024 bid.

The first step in the re­view is sched­uled for Fri­day, when the City Coun­cil’s Olympic com­mit­tee will be briefed on the agree­ment.

Coun­cil­man Mitch O’Far­rell, who serves on the com­mit­tee, said Tues­day he had not yet seen the 2028 agree­ment nor re­ceived any anal­y­sis of it. He in­di­cated that nei­ther he nor his col­leagues would want to be rushed.

“I’m go­ing to need to ask lots of ques­tions and get clar­i­fi­ca­tion,” O’Far­rell said. “So how­ever long that takes is how­ever long I will de­mand that we have enough time to weigh the mer­its of this agree­ment.”

The ef­fort to vet the agree­ment comes about a month af­ter the coun­cil was ac­cused of push­ing through a new con­tract with the De­part­ment of Wa­ter and Power’s big­gest union with­out ad­e­quate pub­lic de­bate.

Jonny Cole­man, a leader of the op­po­si­tion group Nolympics L.A., ac­cused city lead­ers of scram­bling to meet “made-up” dead­lines set by the IOC, whose mem­bers will meet in Peru in Septem­ber to sign off on the 2024 and 2028 Olympic bids.

With the four ex­tra years, the pub­lic and the city should be given more time to scru­ti­nize the 2028 con­tract, he said.

“We’re dis­ap­pointed by

how quickly they’re go­ing to ram this through the City Coun­cil,” Cole­man said.

City Coun­cil­man Paul Kreko­rian, who also serves on the com­mit­tee for the Olympics, said Tues­day he ex­pected the coun­cil would have enough time for a thor­ough re­view. He said his big­gest con­cern at this point was the “in­creased un­pre­dictabil­ity” that could come with hold­ing the Games four years later.

“The longer the time hori­zon, the less abil­ity you have to pre­dict what the state of the world will be, and what the state of the eco­nom­ics will be,” he said. “So that will be my con­cern. My con­cern will be, what is less know­able be­cause of the ex­ten­sion of time?”

The 46-page host city con­tract for 2028 was made pub­lic Mon­day by the IOC. It in­cludes new de­tails about spon­sor­ship sales, re­ten­tion of a po­ten­tial sur­plus, and fund­ing for youth sports pro­grams through­out the city.

Chief Leg­isla­tive An­a­lyst Sharon Tso said Tues­day that her of­fice would re­lease a re­port on the con­tract be­fore Fri­day’s com­mit­tee hear­ing. The coun­cil will also have to sign off on a new mem­o­ran­dum of un­der­stand­ing with the L.A. bid com­mit­tee, Tso said.

That agree­ment lays out the city’s re­la­tion­ship with LA 2028, as the bid com­mit­tee is now known, and the yet-to-be-formed or­ga­niz­ing com­mit­tee that will run the Games.

State leg­is­la­tors also have to weigh in on the new deal. Un­der the ar­range­ment that was ap­proved for 2024, the city agreed to cover the first $250 mil­lion in ex­tra costs and the state the next $250 mil­lion, with the city re­spon­si­ble for any­thing more.

In its suc­cess­ful bid for 2028, L.A. or­ga­niz­ers set a bud­get of $5.3 bil­lion, to be funded by broad­cast rev­enue, spon­sor­ships, ticket sales and other sources.

Some de­tails about the 2028 Games bud­get and plans are still un­clear. The IOC hasn’t posted its op­er­a­tional re­quire­ments agree­ment for the 2028 Games, which is part of the host city con­tract.

The doc­u­ment typ­i­cally con­tains thou­sands of stip­u­la­tions, such as what mu­sic can be played dur­ing cer­e­monies.

Last month, the L.A. bid com­mit­tee de­clined to pro­vide a de­tailed bud­get break­down for the 2024 Games. Com­mit­tee spokesman Jeff Mill­man said there were con­fi­den­tial de­tails in the spend­ing plan, in­clud­ing in­for­ma­tion about third par­ties such as venue op­er­a­tors.

Mill­man pointed to an in­de­pen­dent anal­y­sis by the ac­count­ing firm KPMG, which called the bud­get “sub­stan­tially rea­son­able.”

The coun­cil’s de­ci­sion to put the city on the line for un­ex­pected costs comes amid a lengthy his­tory of Olympic cost over­runs.

Re­searchers at the Univer­sity of Ox­ford found that be­tween 1960 and 2016, 15 Olympic Games had cost over­runs ex­ceed­ing 50%.

“The bud­get is more like a fic­ti­tious min­i­mum that is con­sis­tently over­spent,” the Ox­ford re­searchers wrote.

Olympics ex­perts say L.A.’s bid is low-risk be­cause it uses ex­ist­ing venues such as the Coli­seum, Sta­ples Cen­ter and Pauley Pavil­ion, and sets aside a nearly half­bil­lion-dol­lar con­tin­gency fund.

Still, there’s greater eco­nomic and po­lit­i­cal un­cer­tainty in host­ing an Olympics 11 years out rather than seven, ex­perts say.

Olympic bud­gets are made com­pli­cated when they are led by pri­vate en­ti­ties rather than gov­ern­ments, says Jules Boykoff, who teaches po­lit­i­cal sci­ence at Pa­cific Univer­sity in Ore­gon.

Other host coun­tries typ­i­cally help back­stop the Games, as Bri­tain did when Lon­don hosted in 2012. How­ever, the U.S. is unique in that the fed­eral gov­ern­ment doesn’t cover such sub­stan­tial costs.

“The pri­vate na­ture of the Games presents in­her­ent prob­lems with trans­parency and ac­count­abil­ity,” Boykoff said.

David Mc­New AFP/Getty Im­ages

CITY COUN­CIL Pres­i­dent Herb Wes­son, with Mayor Eric Garcetti, left, and bid Chair­man Casey Wasser­man, right, speaks at Mon­day’s 2028 an­nounce­ment.

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