The release of Boston 2024’s “2.0” plan, while far from the final version of the bid (as noted by its chairman and CEO), represents the latest attempt of the local Olympic organizers to win over a skeptical public. The key factor in garnering a majority approval rating, a prerequisite to the bid’s success, will be best achieved by showing Boston not only that it stands to gain from the Olympics coming to town, but that it will be protected from the risks.
In other words, Boston 2024 needs the numbers to back up what it claims. In analyzing the 2.0 plan, few minds are better attuned to study Olympic bids than economist and Smith College professor Andrew Zimbalist. His recent book, Circus Maximus, details the many risks that accompany a city choosing to host either the Olympics or the World Cup. Already an active voice in the Boston 2024 conversation, he recently spoke with BostInno about his views on Boston 2024’s 2.0 plan.
On Boston 2024’s insurance plan:
It’s bologna. They said nothing concretely about cost overrun insurance. Nothing concretely, accept the notion that they put out there that they’re going to require the private developers to buy their own insurance to cover cost overruns. They acknowledge at one point in their documents that there might be an unattractive rate of return to prospective developers. And they say how they’re going to deal with that: They’re going to rebalance the distribution between public and private money. They’re asking private developers to do an awful lot for very little potential return.
What he sees as the reality of what Boston 2024 will have to do to tempt developers:
It’s going to be enormously difficult to find developers who want to take it on their (Boston 2024’s) terms. I think what Boston 2024 is going to have to do if they want to get private developers is to sweeten the pot. And the way you sweeten the pot is by adding public money and adding very very deep tax incentives. All of that is going to be very costly to the public sector.
The risk of public money:
They haven’t given us anything in my view that says they’re not going to have to lean on public money. And if they really believe that, then they would say fine to Massachusetts, we don’t need you to sign the financial backstop. But they’re not going to say that. So it’s a lot of smoke and mirrors, as far as I’m concerned, quite frankly.
Zimbalist’s view of the updated plan:
Obviously this plan is better than the other plan, and it provides more details. It has a few things in it that are attractive, but look, the attractive things that are there, we can do or Boston can do without having to take the detour of having the Olympic Games. And by the way, one other thing that’s important to point out is they’re continuing with the deception about ‘transportation infrastructure.’ Either they don’t understand the bond authorization process, or they’re just flat-out lying.
Boston 2024’s continual claim that they used “conservative” cost estimates to formulate the expected budget surplus:
Gibberish. It’s all spin, that’s all it is. That’s what you do when you write this kind of a document. You say that you’re using ‘conservative numbers.’ Somebody told him (Pagliuca) to say that.
They use the word ‘leverage’ all of the time. ‘This is going to leverage the inherent potentials for Boston.’ They have a couple of key public relations terms that are throughout. One of them is this notion that they’re ‘conservative figures.’ You don’t build a 60,000 capacity Olympic stadium out of steel structure for $175 million and call it ‘conservative.’ Maybe they got some architectural and engineering company to come along and say this is viable, but to say that it’s ‘conservative’ is silly. And if you read the document, they have a little section that’s called ‘demolition costs’ and they don’t tell you anything about it. They just say they’ve discussed them with some well known company.
Are Olympic costs simply too much now as opposed to even a few decades ago?
Yes. It’s much different than it was 20, 30 and 40 years ago. The numbers are much different, and they’re even much different even if you control for inflation. The notion that they make money because there was a surplus on the OCOG budget, the operating budget, is very stilted. The operating budget is about one-third, or even less than one-third of the total budget when you include venues and infrastructure. In London for instance, the total budget was over $18 billion and the operating budget was around $4 billion. And by the way, Sochi had an operating budget surplus also. So it doesn’t have to be the United States. There are other places that have reported operating budget surpluses. But again you can put whatever you want to put in it. You can take out whatever you want to take out of it. You can, if there are some subsides from the government, you can put that in there. I don’t the numbers that they’re using are realistic numbers for the operating revenue.
You can have an operating surplus and still have a massive, massive deficit.
On Paris 2024 vs. Boston 2024:
Yes, they have more elaborate facilities with better amenities and larger capacities, with premium seating. So if we actually go forward with these bare-bone plans, I doubt that we would, but if we actually do, I don’t see how we win that competition. It becomes a waste of time.
Agenda 2020 is mostly a public relations gesture I think. The IOC will make some concessions, but they’re not going to change their basic modus operandi.
Image via Boston 2024
