Will 2016 Olympics really be a prize for the host city?
The Olympics cost billions and often leave venues deep in debt. But they inspire civic pride.
Charles Dharapak/ Reuters
By all appearances, the four finalists for the 2016 Summer Olympic Games desperately want to win.
The question is why.
The 1976 Olympics left Montreal with a $1 billion debt, which the province of Quebec fully paid off only in 2006. Australian taxpayers pay $32 million a year to maintain Sydney Olympic venues that now go largely unused. The projected budget for London 2012 was $3.9 billion; it's now $15.1 billion and climbing.
The bid cities of Chicago, Rio de Janeiro, Tokyo, and Madrid had many hopes going into the International Olympic Committee meeting Friday in Copenhagen, Denmark, at which the IOC will choose the 2016 host city. Chicago is hoping for international prestige to pip New York and Los Angeles. Rio hopes it will boost commerce and industry in the city. Yet Olympic historians say the cities can be certain of only one thing: a massive jolt to the municipal ego.
"It's civic pride," says Ed Hula, publisher of Around the Rings, a newsletter that follows the Olympic bid process. "It's the idea that 'we can do this' – that it's important and part of the city's history."
From pride to promotion
This notion of civic pride has often veered toward global promotion. Salt Lake City was eager to prove the falsity of stereotypes that portrayed Utah's Mormon community as insular and odd. Turin sought the Olympic spotlight to reinvent itself, saying it was more than the "Detroit of Italy" – it was an equal of Rome, Milan, or Florence. And Beijing's Olympics were nothing less than an astounding attempt to announce China's arrival as a world power.
Chicago's bid is unusual because of the high-profile involvement of Mayor Daley, who is "a far more powerful and engaging figure than any other person on the US Olympic Committee," says Mr. Hula.
Though President Obama and the first lady are part of an 11th-hour show of official support, Chicago's bid is most intertwined with Daley's will and legacy. "He's the only one who got the Olympics bug," Hula says. "You can't do anything in that city without his support or his involvement. He has been the person out front politically all along."
But history has proved that prestige comes with a significant cost to the public, says Jeffrey Segrave, an Olympic historian at Skidmore College in Saratoga Springs, N.Y. The economics of the Games are "extraordinarily elusive" because they involve "indirect expenses that are always difficult and cantankerous to deal with."
Some expenses can be leveraged to bring more permanent gains. Salt Lake City used the Olympics to expedite federal funding for the reconstruction and widening of a key stretch of Interstate 15.
But many expenses are largely sunk costs. Beijing spent $423 million on its national stadium but has had little use for it since. "The history and tradition of these facilities is that they lie unused and the public is paying the bill for [them]," says Mr. Segrave.
In Chicago, public opinion has fractured in the weeks leading up to the Copenhagen IOC summit. Fears about budget overruns and corruption loom, particularly in a recession. Wary Chicagoans need only look at Vancouver, British Columbia, host of February's Winter Games, to confirm their worries. The city had its credit lowered after experiencing difficulties funding its $800 million housing facility for athletes.
Windy City, cold feet
A poll conducted by the Chicago Tribune and WGN-TV in late August reported that 45 percent of Chicagoans do not want the Games in Chicago, with 47 percent supporting them. The results are a reversal of the results from February, when 64 percent wanted the Games and 28 percent did not.
Tom Tresser, a Chicago college professor, cofounded No Games Chicago, a citizen advocacy group. He is in Copenhagen to lobby the IOC against choosing his city. He cites public concerns about corruption and incompetence.
"We're trying to tell them it's very unstable here, and the people don't want this," Mr. Tresser said in the days before his departure. "The mayor has one vision to give prosperity to this city, which is building parties that are all about contracts and concrete. If it's not about high-priced stuff that we can build," he accuses Daley of reasoning, "it doesn't appear on the economic-development agenda."
Public worry over spending is "a legitimate concern," says Olympic historian David Wallechinsky. The US government does not provide federal funds to cover the Games beyond providing security, and sponsorship money is not as secure as it once was, due to the economy. That means cities can be left on shaky ground as expenses rise.
"There's no guarantee" that preliminary budgets will be right. Bidding organizations will "always tell you it's only going to cost this much, but as soon as they get the bid, it's 'Oh, we forgot this,' " says Mr. Wallechinsky. "That happens, always."
This doesn't mean that bidding for the Games is not worthwhile, Wallechinsky adds. But "a city should never bid for an Olympics thinking it will turn a profit," he says. "If they try to tell you that, it's a stab in the dark."