LOS ANGELES – The centerpiece of the proposed 2024 Olympic Games in Los Angeles would be a $1 billion village where thousands of athletes would eat, sleep and stroll on tree-lined walks and clipped lawns.
But with a deadline to submit a U.S. candidate for the 2024 Games just 18 days away, the plan remains a mystery in many ways.
The sprawling Olympic Village, which would be built near downtown with mostly private funds, is tethered to a series of financial assumptions and question marks.
The city doesn’t own the land that is now used as rail yard or know how much the property would cost. Details of financing also are elusive. City analysts warned Thursday that costs to acquire the 125 acres and build the structures may significantly exceed the projected cost.
The village proposal “is very hard to pin down,” said Chicago-based sports finance consultant Marc Ganis. “There’s not enough information to base a judgment on.”
Looming questions also include whether the developer would be given tax incentives to build the village, and what that might cost local government.
However, doubts about runaway spending were put on hold Friday when a City Council committee advanced a proposal to authorize Mayor Eric Garcetti to execute agreements related to the city’s Olympic bid.
The move, which sets up a vote by the full council next week, came after Chief Deputy City Attorney James P. Clark assured members its passage would not expose taxpayers to unchecked spending or debt.
The U.S. Olympic Committee cut ties in July with Boston, which was initially selected as the U.S. contender. With Los Angeles the likely stand-in, the USOC faces a Sept. 15 deadline to enter a U.S. bid.
The head of the privately run 2024 committee described the Olympics proposal as a work in progress. The city’s final plan is not expected to be submitted until late 2016, if a preliminary bid is entered next month.
“It’s obviously a first draft,” businessman Casey Wasserman told reporters after the committee meeting.
Earlier this week, the bid committee released its first detailed plans for 2024, describing events from volleyball in Santa Monica to mountain biking in the Hollywood Hills. Its budget projected a $161 million surplus.
Over the years Olympics have been notorious for cost overruns, and studies have questioned if host cities benefit economically. Russia has been struggling with costs from the 2014 Sochi Olympics, which have been called the most expensive Olympics of all time.
The plans for the Olympic Village included many blank spots:
–The proposed site is owned by Union Pacific Railroad. The railroad said in an October letter to the mayor that it has no plans to close or relocate the facility and is planning a major modernization but would be open to the possibility of a sale or exchange involving a “suitable replacement facility with all the necessary permits and approvals.” The estimated cost of the land is unknown.
–The village concept calls for transforming the site into residential housing after the Games. But those plans have not yet been determined, the bid plan states.
–A private developer would invest most of the $925 million to build the village, but who would build the site, how the company would be selected and what type of financing would be used is unclear. The plan refers to necessary environmental and planning studies, but no cost estimates are given.
“When they deal with real estate developers, it’s rarely straightforward,” said Ganis, who considers other parts of the 2024 budget financially sound.
In a report Thursday, city analysts said relocating the rail yard and environmental work could consume over half the proposed budget for the Olympic Village. It recommended the committee find alternative sites.
The analysts said they didn’t have enough information to verify the overall 2024 budget or determine the financial risk. They recommended a series of safeguards be established, including protecting the city treasury into the future.
Garcetti and organizers behind the Los Angeles bid project the Olympics will be a money-maker.
“I think it’s much, much more probable that we’ll have a lot of revenue sources that come from this than worrying about the loss,” Garcetti said Thursday at a meeting with the editorial board of the Los Angeles Daily News.