Los Angeles city officials backed an agreement in January putting taxpayers on the hook for potentially hundreds of millions of dollars in cost overruns from the 2024 Summer Olympics, if L.A. were selected as host and unforeseen expenses arose.
Now that L.A.’s bid committee has negotiated terms with the International Olympic Committee to host to the 2028 Games — a deal trumpeted in a splashy event Monday at StubHub Center in Carson, one of the planned competition venues — officials must repeat the process and approve a similar financial guarantee to seal the bid.
City leaders say they expect to vote on the host city contract by late next week — a more accelerated process than the one for the 2024 bid.
The first step in the review is scheduled Friday, when the City Council’s Olympic committee will be briefed on the agreement.
Councilman Mitch O’Farrell, who serves on the committee, said Tuesday he had not yet seen the 2028 agreement or received any analysis of it. He indicated that neither he nor his colleagues would want to be rushed.
“I’m going to need to ask lots of questions and get clarification,” O’Farrell said. “So however long that takes is however long I will demand that we have enough time to weigh the merits of this agreement.”
The effort to vet the agreement comes about a month after the council was accused of pushing through a new contract with the Department of Water and Power’s biggest union without adequate public debate.
Jonny Coleman, a leader of the opposition group NOlympics L.A., accused city leaders of scrambling to meet “made-up” deadlines set by the IOC, whose members will meet in Peru in September to sign off on the 2024 and 2028 Olympic bids.
With the four extra years, the public and the city should be given more time to scrutinize the 2028 contract, he said.
“We’re disappointed by how quickly they’re going to ram this through the City Council,” Coleman said.
City Councilman Paul Krekorian, who also serves on the committee for the Olympics, said Tuesday he expected the council would have enough time for a thorough review. He said his biggest concern at this point was the “increased unpredictability” that could come with holding the Games four years later.
“The longer the time horizon, the less ability you have to predict what the state of the world will be, and what the state of the economics will be,” he said. “So that will be my concern. My concern will be, what is less knowable because of the extension of time?”
The 46-page host city contract for 2028 was made public Monday by the IOC. It includes new details about sponsorship sales, retention of a potential surplus, and funding for youth sports programs throughout the city.
Chief Legislative Analyst Sharon Tso said Tuesday that her office would release a report on the contract before Friday’s committee hearing. The council will also have to sign off on a new memorandum of understanding with the L.A. bid committee, Tso said.
That agreement lays out the city’s relationship with LA 2028, as the bid committee is now known, and the yet-to-be-formed organizing committee that will run the Games.
State legislators also have to weigh in on the new deal. Under the arrangement that was approved for 2024, the city agreed to cover the first $250 million in extra costs and the state the next $250 million, with the city responsible for anything above that.
In its successful bid for 2028, L.A. organizers set a budget of $5.3 billion, to be funded by broadcast revenue, sponsorships, ticket sales and other sources.
Some details about the 2028 Games budget and plans are still unclear. The IOC hasn’t posted its operational requirements agreement for the 2028 Games, which is part of the host city contract.
The document typically contains thousands of stipulations, such as what music can be played during ceremonies.
Last month, the L.A. bid committee declined to provide a detailed budget breakdown for the 2024 Games. Committee spokesman Jeff Millman said there were confidential details in the spending plan, including information about third parties such as venue operators.
Millman pointed to an independent analysis by the accounting firm KPMG, which called the budget “substantially reasonable.”
The council’s decision to put the city on the line for unexpected costs comes amid a lengthy history of Olympic cost overruns.
Researchers at the University of Oxford found that between 1960 and 2016, 15 Olympic Games had cost overruns exceeding 50%.
“The budget is more like a fictitious minimum that is consistently overspent,” the Oxford researchers wrote.
Olympics experts say L.A.’s bid is low-risk because it uses existing venues such as the Coliseum, Staples Center and Pauley Pavilion, and sets aside a nearly half-billion-dollar contingency fund.
Still, there’s greater economic and political uncertainty in hosting an Olympics 11 years out rather than seven, experts say.
Olympic budgets are made complicated when they are led by private entities rather than governments, says Jules Boykoff, who teaches political science at Pacific University in Oregon.
Other host countries typically help backstop the Games, as Britain did when London hosted in 2012. However, the U.S. is unique in that the federal government doesn’t cover such substantial costs.
“The private nature of the Games presents inherent problems with transparency and accountability,” Boykoff said.
Times staff writers David Wharton, David Zahniser and Emily Alpert Reyes contributed to this report.