There will be “no surprises,” the Los Angeles bid for the 2024 Olympic and Paralympic Games assures as Friday it released a (USD) $5.3 billion balanced Games budget that would be followed should the Golden State be chosen to host the Games.
“LA 2024’s budget ensures guaranteed delivery of the Games, a prudent and responsible use of our city’s existing resources and assets, and stability and minimal risk to the IOC and Olympic Movement not just for 2024, but for many years beyond,” LA 2024 CEO Gene Sykes said.
LA 2024 officials say that they will break the trend of Olympic bid budgets that balloon out of control and become a burden on taxpayers and a disincentive for cities that hope to host the Games in the future. These concerns have been echoed in the past week as the International Olympic Committee (IOC) held its Rio 2016 Olympic Games debrief and discussed the skyrocketing costs that Tokyo is experiencing as the Japanese capital prepares to host the 2020 Games.
The bid underlines its confidence in the budget with the inclusion of more than 30 in-place or planned venues that will help control the risk and expense common with large capital infrastructure projects. The Olympic Village at a university campus and an existing Olympic Stadium that was used at the 1932 and 1984 Games in L.A. represent key, costly venues that do not need to be constructed. There will be no new permanent venues built.
Instead of building venues, organizers say, focus can be placed on improving the Games and athletes’ experience.
Transportation upgrades that the bid is highlighting for use at the Games are already funded and in some cases, underway. $88 billion in transit costs are ongoing while $120 billion additional investments were approved in December. A $14 billion airport modernization project is also in process.
LA 2024 will also offer a $491.9 million contingency fund in case costs creep up, but organizers are quick to point to their 1932 and 1984 Games that both turned a profit in difficult economies.
The budget has been heavily vetted over the past six months with several workshops and was finally submitted to the ‘Big 4’ accounting firm KPMG, chosen by the City of Los Angeles to independently evaluate LA 2024’s budget. Bid officials say the KPMG report will be made public later Friday.
LA’s project is unique as it offers a budget that includes expenses and lease costs, but not capital investment costs for permanent infrastructure critical to staging the Games. Bid organizers explain that there will be no permanent construction of any kind that are specific to the Games, so there is no need for this detail in the budget documents.
The lack of included capital infrastructure costs is unprecedented in recent Olympic bid history.
Los Angeles, along with rival bids from Budapest, Paris, and from Rome (before the Italian city suspended its campaign), had been required to provide venue choices and estimates for related expenditures and capital investments to deliver them for the Games. This information, due into the IOC along with the stage 3 bid book on October 7, was provided to the IOC by L.A.’s bid but was not published in the document.
Instead, L.A. wrote in the submission “[the financial information is] being withheld from publication at this time to protect LA24 proprietary information. Information from this section will be part of the Games budget submitted with Candidature File Part 3 in February 2017.”
The other cities published full details.
Los Angeles mayor Eric Garcetti said: “The people of Los Angeles and the Olympic family can be assured that the budget we release today reflects accurately the cost of delivering LA 2024’s Plan for a fiscally responsible Games that provides only upsides – economic, social and sporting – for our city and for the Olympic Movement.”
“Instead of mortgaging our futures on unknowable construction costs, our Games will capitalize responsibly on investments that are already transforming our city for the future.”
LA 2024 Chairman Casey Wasserman added “from day one, LA 2024’s budgetary objective has been: ‘no surprises.’ If LA is chosen to host the 2024 Games, the IOC does not have to worry about changing or evolving budgets, shifting competition venues or uncertainty about the delivery of the Games.”
The IOC will elect the host city for the 2024 Olympic and Paralympic Games September 13, 2017 in Lima, Peru.