The ‘ifs’ of the Games

Financial projections about the Olympics from L.A. officials are too short on specifics.

Questions about the financial assumptions in Los Angeles’ proposal to host the 2024 Olympic Games are starting to add up. Or, rather, not add up. The revenue projections that Mayor Eric Garcetti’s Olympic negotiating team made in its bid proposal (known as the “bid book”) count on more than $1 billion of investment and cooperation from outside sources, including USC, NBC Universal and private developers. But closer inspection shows that these contributions are based on little more than assumptions and extrapolations, not rock-solid promises.

That’s more than a little troubling as Garcetti prepares to announce a deal with the U.S. Olympic Committee, thus putting Los Angeles in the international competition for the 2024 Summer Games. The bid book’s projections are the basis for the mayor’s assurances that the city guarantee for cost overruns, required by the International Olympic Committee, is nothing to worry about.

Well, we’re worried. So are City Administrative Officer Miguel Santana and Chief Legislative Analyst Sharon Tso, who prompted the City Council to delay a vote to authorize the bid last week by recommending more city oversight of the bidding process and an independent analysis of the financial risks. The council is set to approve an amended agreement Tuesday that requires further council approval of Olympic contracts that put taxpayer money at risk.

That’s wise, giving the city a chance to back out if the numbers don’t pan put. But it is not yet cause for relief. That will come from a full examination of the Olympic budget before the International Olympic Committee picks the winning bid in 2017, starting with the proposal’s biggest discrepancies. For example, it touts the transformation of the Los Angeles Memorial Coliseum into a “worldclass Olympic Stadium” for $800 million. More than half of that amount purportedly would come from USC, which operates the Coliseum. But although the university has been planning to renovate the Coliseum, it has only committed $70 million to the project. The final cost of the broadcast and media center planned for the NBC Universal studio lot is also unclear, as is who would pay for it.

Then there’s the matter of the state’s help. The bid book says Gov. Jerry Brown has indicated support for a financial backstop similar to a $250-million guarantee that the Legislature passed in 2007, when the city was bidding on the 2016 Games. Brown’s office says that he hasn’t agreed to anything. Whether the governor might eventually agree to cover some of the inevitable cost overruns is an open question. But if there’s one thing that characterizes Brown’s governorship, it’s his frugality.

In fact, the only thing certain about the Olympics budget for 2024 is that nothing is certain.