Mar 9, 2007 11:08 pm US/Central
Daley Unveils Financial Plan For Olympic Games
Tax Payers Could Be Liable For Half Billion In Olympic Overruns
CBS 2's Rafael Romo and Chief Correspondent Jay Levine contributed to this report.
CHICAGO (CBS) ―
The Chicago Olympic Committee released new details Friday on how the city is planning to offer a financial guarantee for the 2016 Summer Olympic Games.
As CBS 2 Chief Correspondent Jay Levine reports, it was a good news, bad news scenario. First, the bad news: Chicago taxpayers could be liable for half a billion dollars in Olympic overruns. The good news: according to city officials, it'll never happen.
Mayor Daley said the plan is exactly the guarantee the Olympic Committee requires.
"What they need is going to cost 'x' amount and if everything fails, everything drops dead, someone has to support it, and under our financial plan, it's a well-structured financial plan," the mayor said.
The plan presented Friday is a little bit different from what we were led to believe it would be. Nobody else stands between red ink and Chicago taxpayers. No matter how remote they say the possibility is, if the Olympics loses money, we're the first to pay.
The animation released Friday afternoon of Chicago's plan for the 2016 summer games is captivating: Flying along the lakefront, watching venues magically take shape and ending at the Olympic stadium in Washington Park, aglow and filled with spectators.
Right now, it's just an expensive dream. Some say, a risky one, but city officials maintain they'd have to go through a $525 million projected surplus and another $200 million they expect from luxury suites and sponsors. Only after that cushion would city taxpayers be liable for $250 million.
"The city falls behind $725 million dollars in conservatively estimated surplus you realize how remote it is that this city's resources could ever be tapped," said Mara Georges of Chicago Corp. Counsel.
Aldermen briefed by the mayor before the plan was released to reporters seemed comfortable with it.
"People of the city of Chicago can be pretty well assured of the fact that the risk will be very, very minimal," said 33rd Ward Ald. Dick Mell.
The final piece of the Olympic plan, also unveiled today, was a new, state-of-the-art swimming and diving center in Douglas Park.
As a direct response to aldermanic concerns about the bulk of facilities along the lakefront- the westside aquatics center is to be financed in part by the park district.
"We feel our $15 million investment to get $80 million facilities which will be used by the Olympics for a month, but used for decades the community and the families in the community, is an invaluable opportunity for us," said Tim Mitchell of Chicago Park District.
Chicagoans may be enjoying the facilities for decades. The question is whether or not they'll also be paying for them for decades. The mayor and his people point out recent olympics in the United States made hundreds of millions of dollars, but others, worried about chicago's culture of cost overuns, aren't as confident.
Professor Irv Rein of Northwestern University says there cannot be an absolute guarantee.
"There's no such thing as a guarantee on this," Rein said. "I mean, if you look at the history of the events, there's all kinds of unforeseen circumstances – whether infrastructure problems, whether there's political problems."
Rein said even though many cities have indeed made money on the Olympics, that does not mean it is a certainty. It took Montreal 30 years to pay off its debt as a result of organizing the 1976 Olympics.
Mayor Daley has said repeatedly that public money will not be used to fund the Olympics. But it cannot be said certainly that at least some of the costs might not fall to taxpayers, Rein said.
"I don't think anybody can reasonably guarantee that public money won't be used in this situation," he said.
Rein said Chicago may be in more for the image boost.
"I think money is one thing and I think people do really concentrate on that," he said, "but most places want something else -- they want image; they want branding. I think that's what Chicago is in it for."
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