Wages. Contracts. Housing. Many Questions Remain After LA28 Releases Olympic Deal With City
Now that the deal between the city of Los Angeles and the local Olympic and Paralympic Games organizer is public, local players bracing for the games — for better or worse — are weighing in.
A large coalition of businesses say they welcome a shot at doing business with LA28, the private nonprofit that is staging the 2028 games. Meanwhile, the union representing thousands of hospitality workers is pushing back with demands for more transparency, as well as higher wages and housing protections.
The Nolympics coalition, true to its name, argues that the L.A. Games will cost residents far more than they gain and that the financial protections for the city's taxpayers fall short.
The Olympic and Paralympic Games represent a gigantic economic engine to drive growth in tourism and other industries for the next seven years. LA28 has a $6.9 billion budget and is expected to grow its own workforce from about 100 people to about 6,000 by 2027. At the same time, it promises to pay L.A. and other local jurisdictions to cover the added expenses of public safety, trash, traffic and other things the games will affect.
Already, hospitality union officials are raising concerns about the types of jobs that will be created. The LA28 program to hire and train local workers "would do very little to ensure the quality of the jobs that will be required to carry out the Games," said Kurt Petersen, co-president of Unite Here Local 11. He also said the current plans lack concrete commitments to workforce diversity.
Petersen proposed LA28 commit to paying a minimum wage of $28 per hour and allocate a significant portion of jobs for Black workers.
"Why don't we say that Black workers should have a third of those jobs or a fourth of those jobs or half of those jobs [because they are] workers who have been historically excluded from hotel jobs in particular," Petersen said.
The hospitality union also objected to the lack of language in the draft that would protect local residents from rising housing costs and the possibility of being displaced from their homes.
City spokesman Alex Comisar said existing protections for affordable housing would remain in effect during the runup to the games. That includes rent control and ordinances covering short-term rentals.
Unite Here Local 11 sued the city in mid-October to force disclosure of the contract draft, complaining that it was produced without sufficient public input.
It was finally released Nov. 17 with a prospective approval vote coming by Dec. 8. In its response to the draft, the union called on the city council to delay any approval vote until the contract could be subjected to "meaningful input from community groups and working people."
The Nolympics coalition of progressive local groups said the contract proposal for the Games does not reduce what it considers to be an unacceptable amount of risk to the city's finances and residents.
"For LA84, the City of LA established hard, inflexible barriers to protect the city’s finances, removing the City as the guarantor of last resort," the group said in a statement. "For 2028, Angelenos remain the guarantor of last resort. The current city government has fundamentally failed to do that bare minimum to protect Angelenos."
In particular, the $270 million contingency against cost overruns of LA28's $6.9 billion budget is insufficient, the group said.
Under the contract proposal, LA28 pledges to set aside $270 million in a contingency fund to cover cost overruns; however, that represents a portion of the organization's overall contingency fund of $615 million, an LA28 spokeswoman said.
The Nolympics group questions whether LA28 has or can secure sufficient insurance to prevent a budget shortfall, and it criticized the city and LA28 for a lack of transparency in drafting the contract.
"This is how every step of the Olympic decision making process has transpired: behind closed doors, with vague promises, and taking huge risks at the expense of the most vulnerable all in the name of a two-week party," Nolympics said.
The group opposes the conversion of apartment buildings into hotels, and the conversion of houses into short-term rentals because both reduce the stock of affordable rental housing.
LA28 Chairman Casey Wasserman said part of his organization's job is to locate hundreds of thousands of local hotel rooms, work that he described as nearly complete.
The Olympic group is not responsible for solving all the city’s homeless and housing problems, he said.
“We're not responsible for controlling the housing market in Los Angeles for private rentals or what private landlords want to do at their facilities,” Wasserman said.
Putting on any Olympic games requires resources beyond the city and organizing group. The contract between Los Angeles and LA28 calls for small businesses, including those owned by members of underrepresented groups, to benefit from the influx of dollars to stage the games.
Contracts for those businesses could be coming from LA28 as well as from the city. How those will be evaluated and awarded is also raising concerns. For many years the city's contracting processes had been splintered into several pieces.
A new streamlined bidding and procurement process called Compete4LA is being installed in advance of the games; it's endorsed by a coalition of business groups and associations of Black, Latino and Asian-owned firms.
"The new regional marketplace and procurement program — both the new state-of-the-art online platform and the outreach effort to engage and onboard local diverse small business — are essential to achieving regional economic equity for Los Angeles and the 2028 Olympic and Paralympic Games," the letter co-signed by the groups said.