Charles Chieppo: Boston Olympics could be fiscal fiasco

 BOSTON

Boston, Los Angeles, San Francisco and Washington, D.C., are vying to be the  U.S. entry into the competition to host the 2024 Summer Olympics. The United States Olympic Committee (USOC) will make its selection later this winter, and word is that Boston has the inside track.

In a statement, the group spearheading Boston's effort wrote, "If Boston is selected by the USOC, a thoughtful and robust public process will begin ..." But the time for such a process is now, not after the USOC makes its selection.

Until now, neither Boston nor the state has taken any official action regarding efforts to host the Olympics. What has instead passed for process is hardly encouraging to those seeking fairness and transparency.

An exploratory committee was assembled, but far from being neutral, it was stacked with Olympics boosters. No local economists were named to the committee, and its report included no independent cost estimate. Supporters say they have conducted "extensive and comprehensive" feasibility studies that include how the Olympic Village and stadium would be reused. For those of us who have been involved in what passed for processes around building and expanding convention centers, these steps are eerily familiar and hardly reassuring.

Boosters say hosting the 2024 Summer Games would require $5 billion in new construction, which they claim would be privately financed. They estimate that the state would have to spend $6 billion on infrastructure.

But those numbers don't stack up with data on the cost of hosting recent Summer Olympics, which has averaged more than $19 billion since 2000. Sponsorships, television, licensing, ticket and merchandise sales generally bring in $5 billion to $6 billion, less than half of which goes to the host city.

Signing on the dotted line includes a pledge by host cities that the games will go forward as planned regardless of the cost. That leaves state and local taxpayers on the hook for overruns, which experience teaches us are both assured and significant. Final costs average about three times the estimates included in initial bids.

It took Montreal 30 years to pay off its debt from hosting the 1976 Summer Olympics. Paying back $11 billion from Athens's hosting of the 2004 summer games was one of the reasons for Greece's subsequent debt crisis.

These costs haven't gone unnoticed. In 1995, there were nine applicants from around the world to host the 2002 Winter Games that were held in Salt Lake City; this year, just two cities are vying to host the 2022 Winter Olympics.

For Boston and the other American cities with an eye to hosting the 2024 Summer Olympics, the public's money -- and a lot of it -- is at stake. The public should not have to wait until one of those cities is anointed by the USOC to have its say.

Charles Chieppo is a research fellow at the Ash Center at Harvard University.  This piece originated on the Web site of Governing magazine (governing.com). We run it with Mr. Chieppo's permission.