 "Los Angeles Olympics")
In 2019, two years after LA was awarded the Games, Eric Garcetti, then the mayor, said he expected the city to turn a $1 billion profit. | Source: PTI
What Paris Olympics? Los Angeles is already looking ahead. As the city prepares to host the 2028 Games, construction crews have fanned out, racing to bolster the area’s infrastructure to accommodate hundreds of thousands of visitors.
Three main projects — expanding the rail system, revamping the airport and renovating the downtown convention center, which will be the competition venue for five sports — will have lasting effects on the region. The projects are funded through a mix of federal and city dollars as well as airport fees. And there will also be the tourist dollars spent while the Games take place.
The city sees the Olympics as a revenue producer, not an expense. In 2019, two years after LA was awarded the Games, Eric Garcetti, then the mayor, said he expected the city to turn a $1 billion profit.
For the current mayor, Karen Bass, hosting the Olympics is more than an opportunity to showcase familiar attractions like Hollywood or Venice Beach. It’s also about connecting visitors with small businesses citywide.
“What determines success is for everybody to benefit,” Bass said. “They need to know about Little Bangladesh and Little Ethiopia, and Little Armenia.”
The 1984 Olympics in Los Angeles are widely considered to be one of the most financially successful modern Summer Games, because they largely used existing facilities for events. Repeating that success, however, will be a challenge.
The 1984 Games turned a reported $223 million profit ($670 million in today’s dollars), according to officials.
LA28, the private group organising the Games, has an estimated budget of nearly $7 billion to cover costs associated with staging the events, including the opening and closing ceremonies.
As part of the efforts to host the 2028 Games, officials and California lawmakers agreed to serve as a financial backstop, putting taxpayers on the hook for any expenses that run over budget. (The city has agreed to cover the first $270 million, and the state will cover the next $270 million. LA is then responsible for additional cost overages.)
The pandemic-delayed Tokyo Games in 2021 totalled $14 billion, about 128 percent over budget, according to a University of Oxford study on Olympic costs. And the Rio de Janeiro Games in 2016 cost $24 billion, the most expensive Summer Olympics to date, which came in 352 percent over budget.
Despite the price tag, which LA28 has vowed to cover with sponsorships, ticket sales, global television rights, and payments from the International Olympic Committee, the group has touted the Games as a windfall for the local economy.
“Almost all of LA28’s hiring and most of our direct spending will be local,” Casey Wasserman, chairman of LA28, said. “Our suppliers, partners, broadcasters and Olympic stakeholders will also hire and spend in Southern California, and various LA28 contracts will require local sourcing.”
Separate from the cost of staging the Games — and perhaps of more strategic economic importance — is a larger, parallel investment in infrastructure, particularly transportation.
At a news conference last month outside the Los Angeles Memorial Coliseum, the focal point of the 1932 and 1984 Olympics, Bass announced that the city had secured nearly $80 million in federal funds to go toward zero-emission buses and electric charging infrastructure for them.
The LA County Metropolitan Transpor-tation Authority has spent $20 billion to expand bus and rail lines, including a train route from downtown to the westside, near the campus of the University of California.
Los Angeles International Airport is getting a $14 billion face-lift that includes the addition of an automated people mover linking the central terminal area to rail transit and a new rental car facility. In March, the region received $900 million in federal funds for infrastructure and transportation improvements ahead of the Games. And last month, the LA City Council approved $54 million for pre-design work to expand the convention center.
Local politicians say they expect the Games to turn a profit, helping pad the city’s coffers for years after the athletes leave town.
But the region’s efforts have already hit hiccups.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Aug 12 2024 | 11:10 PM IST
