By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
That's not million. It's actually billion, with a " b," as in boy-oh-boy.
It's possible the Olympics boosters didn't bring it up because they didn't want people to fret. But the International Olympic Committee appears to be quite firm about it.
The committee members thought Atlanta, home of the low-budget, scrape-by "Kmart Olympics," pulled the wool over their eyes, and they have made up their minds that the host city for the 2012 Summer Olympics will have to sign on the dotted line.
New IOC policy mandates that the host city must guarantee the entire budget for the event--$1.8 billion for the 1996 Atlanta event and rising. And they mean they want a promise that a government entity with bonding authority will pledge its full faith and credit to make up any shortfall in the amount of money the host city's private Olympics committee promises to raise.
"Atlanta did a fair amount of smoke and mirrors," says Dick Pound, a Toronto lawyer who is a vice president of the IOC and a member of its coordinating committee. "They said, 'Not only is the great city of Atlanta behind it, but so is the great state of Georgia, with the power but not the obligation to issue bonds.' Some of my colleagues who were a tad naive believed them."
Since '96, the IOC has adopted new rules: The host city and its regional government must sign a contract obligating themselves to do something--sell bonds, raise taxes, whatever it takes--to make sure all of the Olympic budget is in hand on time.
And that doesn't mean, "I will gladly pay you Tuesday for a hamburger today." The IOC didn't like the deal in Atlanta, even though Atlanta eventually brought in the money it promised, because too much of the budget was on the come.
Atlanta, like Dallas, had serious venue problems. It had to build and expand several major stadiums. The IOC didn't like the fact that so little cash was left after construction and before the opening ceremonies.
"They put $500 million in the ground," Pound said. "They had to spend their profit before they earned their nut."
The IOC seems serious about its demand for a hard and fast pledge of tax money to make up the budget--serious enough that a refusal to give the guarantee may influence the United States Olympic Committee's choice for who will be the American candidate city.
Mike Moran, spokesman for the USOC in Colorado Springs, says, "The IOC has made it very clear to us that, from now on, the candidate city will have to bring with it a guarantee of cash for any shortfall, through some combination of state and local government indemnity."
However, the likelihood of a permanent shortfall in a host city's Olympics budget is not great, according to Moran. "The books will be closed at the end of this month on Atlanta, and we are expecting $10 to $15 million (as the USOC's share of the profit)," Moran says.
But a guarantee does mean that a city's credit may be seriously tied up until the books are closed several years after the event. This and other considerations prompted the Seattle Times to editorialize against that city's Olympic bid two weeks ago.
The newspaper obviously resented the way local boosters had glossed over the negatives in an attempt to stampede the city in their favor. Its editorial said, "It's typical strategy for these events: Charge full speed ahead, win converts along the way. But why? This community doesn't need the Olympics. In the past the summer games might have been viewed as a pivot point that would put Seattle on the map, or, as the promoters love to say, turn Seattle into an international city.
"These tired old lines don't work anymore. Seattle is on the map; it is an international city. More important, this region doesn't need a gigantic production like the summer Olympics to overwhelm the agenda the next 14 years."
The estimated $3 billion that the Olympics may cost in 2012 is eerily close to the $3.2 billion burden in deferred basic maintenance--potholes, sewers, curbs, boring things--that the city of Dallas now carries.
Mayor Ron Kirk said in his August 5 "State of the City" speech that these basic needs would be his and the city's primary focus in the next two years. His resolve to swear off big-glitz projects apparently lasted less than a month, until the Dallas Citizens Council, a private club of business leaders, told him it wanted Dallas to go for the Olympics.
The Citizens Council has said it will raise all of the $3 million to $5 million it estimates an Olympic bid will cost. But there are some serious questions about whether Dallas can hope to win the bid, several of which turn on factors the city can do little about.