New LA 2028 Olympic Bid MOU With City Outlines Increased Insurance Needs

The City of Los Angeles along with the United States Olympic Committee and LA 2028 Wednesday released an updated memorandum of understanding (MOU) defining how the three parties will work together in preparation for the 2028 Olympic and Paralympic Games.

Los Angeles City Hall lit up in LA 2024 Olympic Bid colors (LA 2024 Photo)

Los Angeles City Hall lit up in LA 2024 Olympic Bid colors (LA 2024 Photo)

The LA City Council is expected to approve the MOU in a Friday vote that will help protect the city from financial risk and give it greater involvement in the process.

A new MOU was required after Los Angeles shifted its focus from the 2024 Games to instead host the Games in 2028, leaving the earlier edition to Paris.  Last month the International Olympic Committee (IOC) resolved to award both cities with consecutive Games next decade, and LA raised its hand to accept the 2028 edition after having negotiated financial concessions.

The 2024 version of the MOU will still remain intact, however, in case the tripartite agreement is not accepted by the IOC in a member vote next month.

The MOU states “If the IOC does not approve the Tripartite Agreement at the 131st IOC Session in Lima, Peru on September 13, 2017, the original bidding process would resume and both Paris and Los Angeles would again be in contention for the 2024 Games.”

A statement released by the bid explains “The new MOU provides City representation on the LA 2028 Board of Directors, gives the City consent rights over significant venue changes within the City of Los Angeles and $270 million of the projected $500 million Games budget contingency (an increase from $250 million), requires new, more frequent LA 2028 presentations and updates to the City Council in the first three years, invites additional City participation in developing LA 2028’s overall insurance and risk management strategy, requires LA 2028 to acquire additional insurance and newly requires an independent review of the LA 2028’s Games budget, which is to be paid for by LA 2028.”

On Friday LA City Council is expected to approve the MOU, as well as the host city contract without a full analysis of the revised 2028 budget or an approved bill that guarantees State funding of potential cost overruns.  State officials have however indicated that they expect to approve a bill similar to the one easily passed for the 2024 bid, but won’t do so until next year.

The MOU sets out that the city will seek an increase in the state guarantee from the $250 million allotted for the 2024 Games.

LA 2028 CEO Gene Sykes said budget details won’t be fully analyzed for months, but should fall in line with 2024 expectations.

The bid is rushing to gain the necessary approvals for the 2028 bid that took months to finalize for 2024 because it is working to meet an IOC timeline that will allow both the LA and Paris projects to get member approval at the already arranged Session.

Download LA 2028 MOU file 1 and file 2

Los Angeles Mayor Eric Garcetti said “My top priorities in this process are to protect Los Angeles taxpayers and create new opportunities for young Angelenos to play sports, and be healthy.”

“This new MOU ensures that our City priorities remain front-and-center in LA 2028’s preparations for the Games. Under the City’s leadership, we can be sure that the up to $160 million we will receive to fund youth sports programs from LA 2028 will be put to the best, most impactful use.”

Los Angeles City Council President Herb Wesson said “The foundation we lay today will strengthen the relationship between our partners, ensuring that the City of Los Angeles has increased protections and expanded management over the next 11 years.”

Robert Livingstone

About Robert Livingstone

Robert Livingstone is a senior editor, award-nominated journalist and author, covering Olympic bid business as founder of GamesBids.com as well as providing freelance support for print and Web publications around the world. He is a member of the Olympic Journalists Association and the International Society of Olympic Historians. Follow him @enotsgnivil

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