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Great News! LA 2024 Not Likely To Bankrupt The City, According To New Report
Los Angeles Memorial Coliseum (Photo by moskowmonkey via the LAist Featured Photos pool on Flickr)
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The race for the 2024 Summer Olympics draws even closer, and a new report indicates the risk for financial losses would be fairly low if Los Angeles gets the bid, according to Curbed. Considering the Olympics' track record of debilitating their host cities (so much so that some cities terminated their bid) the possibility of a profitable games offers hope with a side of skepticism.
The report, coming from the California Legislative Analyst's Office, describes a 10% contingency plan to cover possible budget shortfalls. SB 1465 limits a state's contribution for said shortfalls to $250 million, and it can only provide the funds once the main guarantor (in this case, Los Angeles) has contributed $250 million. As a result, starting in 2022—when the games start earning revenue—the city will begin allocating a contingency of $477 million. This approximates to 10.1% of the budgeted expenditures of the games. $250 million of the contingency has a mandated allocation for covering budget shortfalls with written consent from the city, while the remaining funds may be used at the discretion of the games. Financial burden to cover overrun costs always rests with the host city, so the contingency is in place to prevent taxpayers from footing the final bill.
According to the report, this contingency is possible because LA 2024 is "basing its bid on existing or already‑on‑track venues and infrastructure [which] reduces the chance that cost overruns will occur." The pre-existing locations include the Olympics-veteran Los Angeles Memorial Coliseum, the Sprint Center, UCLA and USC facilities, and other locations scattered throughout the city. The main facility still under construction is the Rams/Chargers stadium in Inglewood, which will be an integral part of the opening and closing ceremonies. These risk-averse measures also allowed City Council to unanimously support the bid, according to the LA Times.
L.A. has always held its profitable 1984 Olympics as a major source of pride, so the possibility of another financially successful games would make the city a huge outlier in the history of the Olympics. The projected success isn't a guarantee, though, with the report saying "it is easy to imagine that pressures could emerge to change one or more elements of the bid plan in future years."
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