Inside the Bid: Your Money

September 21, 2009 6:28:32 PM PDT
The International Olympic Committee's vote on which city will host the 2016 Games is now just 12 days away.ABC7 Chicago begins a three-night look at how an Olympics in Chicago could impact city and suburban residents. Reporter Ben Bradley has crunched the numbers on Chicago's Olympic budget and investigates the prospects for profit from the Games.

When Chicago won the right to host the 1904 Olympics, citizens were told it would cost $200,000.

Then, there was talk of a new lakefront stadium, and the budget more than doubled. But before much money could be spent, the Games were moved to St. Louis.

A century later, the opportunity to host the Olympics is back, and concern about cost continues.

"I would never bankrupt the city of Chicago," Chicago's Mayor Daley said.

Anti-Olympics groups like to point out Vancouver's politicians made the same pledge for the 2010 Winter Games.

"On time, on budget," one Canadian politician said.

When asked, "If it isn't?" The politician responded, "It's going to be."

One recession and one Vancouver mayor later:

"The Olympic Village is a billion-dollar project, and city taxpayers are on the hook for all of it," Vancouver Mayor Gregor Robertson said.

At $4.8 billion, Chicago's budget is the least expensive of the cities competing to host in 2016. Rio de Janeiro projects to spend $13.9 billion, using the Games as impetus to build a new airport, mass transit and other infrastructure.

"If we're lucky, we break even. That's not all bad. You can have a pretty nice party and still break even," said Univ. of Chicago economist Allen Sanderson.

Sanderson is a skeptic when it comes to Olympic financing. Beijing, for example, spent $40 billion on stadiums, subways, and an airport but still claims to have posted a $250 million profit. That's because Olympic math means infrastructure projects like airports don't count against the Olympic budget, the rationale being infrastructure is built for a city not the Games.

Using history as a guide, it's generally agreed American cities do well and post a profit. So, did Seoul and Barcelona. But, Athens, Montreal and Moscow, not so much. It's less clear for Sydney and Beijing.

Some cities go on Olympic-inspired spending sprees, and that's why the International Olympic Committee would require Chicago to sign a host city contract guaranteeing that the city pick-up the tab.

"The reason the guarantee is there is most cities take a bath and the IOC does not want to be in the bathtub with that city," Sanderson said.

Mayor Daley's claim that no tax dollars would be used for the Games isn't quite true. Already, the park district has promised to spend $35 million to help pay for a sports center in Douglas Park on the West Side and a whitewater course on Northerly Island.

After the Games, nearly $250 million-worth of legacy venues would be transferred to the park district. But those come with upkeep costs.

"What's the source of that funding, do you know? Because they're broke," said Ald. Tom Allen at city council hearing.

To critics concerned about cost, Chicago's 2016 bid Chairman Patrick Ryan asks a simple question:

"Do you think I would take 45 years of reputation in business and the community... that we would put our reputations on the line for something that wasn't right? That we knew there was any doubt we could make right and keep right? Not a chance," he said.

The IOC has called Chicago's revenue projections "ambitious, but achievable." Others point out a Chicago Games would have to shatter most previous records for ticket sales and sponsorships while keeping cost over-runs far below the Chicago norm just to break even.

You won't have to visit or live in the city of Chicago to encounter the crowds, competition or currency generated by an Olympic games. Monday night at 10 p.m., ABC7 Chicago will take a look at how the Olympic stretches far beyond the city limits.


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