After hosting two successful Olympic Games in 1932 and 1984, Los Angeles is going for gold again. Following a unanimous vote by the Los Angeles City Council on Sept. 1, the city submitted their bid to host the 2024 Summer Olympic and Paralympic Games. Within hours, the United States Olympic Committee (USOC) named Los Angeles as the official bidder for the 2024 Summer Olympics.
Over the past week, many council members fought for changes in the Joinder Agreement to protect taxpayers and secure the council’s position to better protect the city’s treasury. The Joinder Agreement is a contract that joins the city with the Bid City Agreement, which is between the private bid committee LA2024 and the USOC.
“While the current agreement is substantially stronger than the one originally submitted, I believe we must continue to seek all possible avenues to mitigate financial risk. These should include a state guarantee, insurance to cover cost overruns and revenue shortfalls, revenue from surrounding jurisdictions that will benefit from the games, and mitigations that cap city funds at risk,” said Councilman David Ryu, 4th District.
Zev Yaroslavsky, who formerly served on the L.A. City Council and the L.A. County Board of Supervisors, was a member of the city council during the 1984 Olympics negotiations. Last week, after the initial Joinder Agreement was presented, he called for the city council to slow down and consider their fiduciary responsibility to protect the treasury and taxpayers.
“The modifications to the contract are essentially what I called for, and buys the city time to make important decisions regarding the budget, and doesn’t bind them to anything,” Yarokslavsky said. “With that time, the city council and city administration and staff need to get busy scrubbing numbers and evaluating how realistic assumptions about the budget actually are.”
Currently, the games are budgeted to cost approximately $6.4 billion, which includes $1.7 billion raised in the private sector that will finance renovations to the Los Angeles Memorial Coliseum and the construction of an Olympic Village.
Yarokslavsky is concerned with line item issues in the budget that may have been overlooked, like a potential underestimation in cost for the proposed Olympic Village, currently budgeted at $1 billion. He said that city council will have to craft a plan that is unique for Los Angeles, with precautions to keep expenditures low, not spend beyond its means, and to extend a guarantee that the city and taxpayers will not be financially liable for any overruns.
“I want the Olympics to come back to Los Angeles as much as the next person,” said Yarokslavsky. “The issue is that many people want the Olympics here, but very few want to pay for it. The city council has to ensure itself and the public that there will be minimal exposure to financial risks.”
Fiscal accountability and the need for community engagement are Ryu’s two main concerns with Los Angeles’ bid.
“The original agreement had no safeguards. We changed the language in the agreement to make sure city council has an opportunity to explore all fiscal accountability measures,” Ryu said. “In terms of engagement, we also need to make sure that community members throughout the city of L.A. have the opportunity to voice opinions and concerns. Now, we will have the opportunity to tackle each of those concerns over the next months and years to come.”
Councilman Mitch O’Farrell, 13th District, said there are many steps before the Olympics will arrive in the city, likening it to a marathon. He said the city council will deliberate and exhaustively consider the opportunities, the challenges and the potential pitfalls as they relate to the bid for 2024.
“This puts us in the position to protect taxpayers from being on the hook for cost overruns – and is the first step in opening the door for us as a city to put in a good, strong, fiscally responsible bid,” said O’Farrell.
Councilman Paul Koretz, 5th District, said he believes that the Olympics will be good for the city in terms of tourism and visibility throughout the world.
“Los Angeles can offer a lot of the already existing infrastructure that most places do not have. We won’t have to build too many facilities – though there are potential plans to add a soccer stadium and to improve the convention center, which will all happen before 2024. It could also speed up the funding for the city’s ongoing transportation plans.”
O’Farrell said the council intends to build a closer relationship with the 2024 host committee so the city will have more of a direct say in negotiations over financial responsibility in the coming months, especially in relation to venues and resources.
“I want to take a look at L.A. in 2025, as the year after the Olympics have been held here, and I want to have seen neighborhoods from every corner of the city have benefitted from the Olympics. I want to have seen profit commensurate from what we saw from the Olympics in 1984, and improvements that can be seen throughout the city,” O’Farrell said.
As a two-time host of the summer games, O’Farrell believes that the city has much to offer – from culture to infrastructure to philanthropy – and, if all conditions are met, this could be the best Olympics yet.
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