City analysts: Olympic Village may ‘significantly exceed’ cost estimate
A new report from city analysts raises concerns about Los Angeles Mayor Eric Garcetti’s plan to host the 2024 Summer Olympics, pointing to missing budgetary details and questioning the feasibility and cost of building a downtown Olympic village for 17,000 athletes.
On the eve of the Los Angeles City Council’s first meetings to discuss the city’s Olympic bid, the report issued jointly Thursday night by City Administrative Officer Miguel Santana and Chief Legislative Analyst Sharon Tso urges further study of the plan and states analysts “cannot verify, validate or further explain” the proposal’s budgetary projections.
The analysts’ report finds the plan is unclear on a number of key points. They include which companies or organizations will contribute the $1.7 billion anticipated from private-sector groups; how routine users of potential Olympic venues such as Griffith Park will be displaced; and whether construction plans near the Los Angeles River could affect an ongoing restoration effort.
“Without additional information … it is difficult to determine the fiscal impact and risk to the city of hosting the 2024 Games at this time,” the report states.
The city’s Olympic plans, detailed in more than 200 pages by LA24 — a nonprofit group run by Garcetti and sports executive Casey Wasserman — were publicly disclosed for the first time this week. They project a cost of $5.8 billion and include extensive real estate development plans. The proposal forecasts a $160-million revenue surplus from the Games.
LA24 spokesman Jeff Millman said in a statement that the documents released this week were a “first draft” and would “evolve in the months and years ahead.” He added: “If selected by the United States Olympic Committee, we look forward to engaging city officials and all Angelenos about how the Olympics would fit very comfortably into our city.”
Mayoral spokeswoman Connie Llanos said Garcetti “looks forward to working with the City Council and all Angelenos to review and refine the bid through a robust community engagement process.”
The report gave special attention to plans for an Olympic village next to the Los Angeles River. It says construction “may significantly exceed” the $1 billion anticipated in the mayor’s proposal. It also states that officials with the Union Pacific Corp., which operates a rail yard on the property, “currently have no plans or desire to vacate the site.”
The Olympic bid states that city officials “have been in regular communication with Union Pacific” about plans to purchase the 125-acre property.
The analysts’ report suggests the city evaluate alternative sites for the village and perform a more rigorous analysis of potential development costs.
It also suggests revisions to a legally binding agreement called a joinder that Garcetti is close to completing with the U.S. Olympic Committee. The City Council is expected to discuss the agreement Friday and vote on authorizing the mayor to sign it in the coming weeks.
The changes, which according to the report were proposed by City Atty. Mike Feuer, would insert language in the agreement that explicitly gives the City Council future opportunities to oversee and approve negotiations with the U.S. Olympic Committee and the International Olympic Committee.
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The International Olympic Committee agreement could be particularly controversial, since it is expected to include a guarantee by the city to cover any financial overruns associated with the Games. Garcetti has said he would agree to such a guarantee, though he predicts the event will make a profit.
Zev Yaroslavsky, a former L.A. County supervisor who was on the City Council when the city hosted the 1984 Summer Olympics, said the changes to the joinder were particularly important. Without them, he said, the council might not have future authority to sign off on the mayor’s contracts with Olympic officials.
The revised joinder, Yaroslavsky said, “buys the City Council some time” to scrutinize plans for hosting the Games.
“I think there are a lot of questions right now, and I don’t think it’s a surprise that the projections of both revenue and expenses were loose,” he said. “There are a lot of assumptions that have been made in the documents that are not necessarily in evidence.”
The city must decide whether it is bidding for the 2024 Games by mid-September. The International Olympic Committee will select a host city in 2017.
peter.jamison@latimes.com
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