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Presentation to
Calgary Bid Exploration Committee
www.nobostonolympics.org 2/25/2017
Questions From CBEC for No Boston Olympics
What are the various elements that we should consider to ensure a comprehensive
evaluation? Is there any specific framework or structure that you would encourage us
to review to help us through our work?
Under what conditions would a bid be clearly against the public interest? Conversely,
what conditions would have to exist for a bid to be in the public interest?
Agenda 2020 from the IOC appears to articulate some material changes to the bidding
process and requirements. During the Boston process Agenda 2020 had been
announced but remained largely unarticulated at that time. What are your thoughts on
what has been described in Agenda 2020 and discussed since? How material are
these changes from your perspective? How would you encourage us to interpret and
react to this guidance?
What other advice would you give any city considering a bid?
2
Three Key Themes From Todays Discussion
3
Agenda
I. Introduction
4
Agenda
I. Introduction
5
Background
Boston native
7
Calgary Credentials
Visited Calgary twice in last three
years for both business and personal
travel -- I love your city!
Business-school roommate is a
Calgary native
Have hiked Sulphur Mountain
Once met Calgary royalty Jim
Peplinski
Enjoy Paul Brandts Alberta Bound
8
Agenda
I. Introduction
9
Key Boston 2024 Milestones
- Boston 2024 Bid Committee forms and begins planning
2013 - No Boston Olympics forms and begins advocacy
- Feasibility Commission created, commission releases report
2014 - Boston 2024 develops plans and advances in process as USOC
narrows field of bidders to Boston, LA, San Francisco, and DC
Ed Davis,
Boston 2024 Board Members included Boston sports heroes Meb
Former Boston Police
Keflezighi, David Ortiz, and Larry Bird
Commissioner
A captivating bid, but competing narratives
on costs and tradeoffs
14
A captivating bid, but competing narratives
on costs and tradeoffs
15
A captivating bid, but competing narratives
on costs and tradeoffs
16
A captivating bid, but competing narratives
on costs and tradeoffs
17
Boston 2024 estimated Games would cost
about $10b
OCOG: Non-OCOG: Public Infra: Security + Logistics:
- Requires taxpayer - Requires taxpayer - 100% public funds - 100% public funds
guarantee for cost guarantee for
overruns or revenue completion to IOCs
shortfall specifications
All values are in 2016 dollars; OCOG stands for Organizing Committee of the Olympic Games
18
The economic benefits of hosting the
Olympics are illusory
There is strikingly little evidence that such events increase tourism or draw
new investment. Spending lavishly on a short-lived event is, economically
speaking, a dubious long-term strategy. Stadiums, which cost a lot and produce
minimal economic benefits, are a particularly lousy line of business
...Philip Porter, an economist at the University of South Florida who has studied the
impact of sporting events, told me that the evidence was unequivocal. The bottom
line is, every time weve looked dozens of scholars, dozens of times we
find no real change in economic activity, he said.
19
Source: https://www.nytimes.com/2014/08/10/magazine/does-hosting-the-olympics-actually-pay-off.html
The more voters learned about Boston
2024, the less they liked it
Western New England University WBUR
April, 2015 July, 2015
0% 0%
% of Pop. in Category: 16% 34% 35% 15% 8% 22% 53% 17%
WBUR: Interviews of 821 registered MA voters, conducted by MassINC Polling, July 6-8, 2015: http://www.wbur.org/2015/07/10/wbur-july-olympics-poll
WNEU: Interviews of 427 registered MA voters, conducted by Western New England University, April 6-14, 2015: http://www1.wne.edu/assets/112/OlympicsPoll_Tables.pdf
Support for Boston 2024 declined, then
plateaued
23
The IOCs business model is largely
unchanged from its origins in 1894
The IOC was founded in 1894 and held its first Games in Athens in
1896. Many stakeholders, including the Greek government,
advocated for Athens to be the permanent home of the Games.
But IOC founder Pierre de Coubertin was a Parisian aristocrat, and
insisted that the next Games be held in the city of his birth
Since the IOCs business model was established, modern society has
seen the invention of radio, television, Internet, and air travel. Where
once the only way to experience an Olympics was in-person, now
99.9% of people who experience the Games do so on a screen
The IOC has bidders compete for the The IOC asks taxpayers for a
Games. It awards them to the boosters financial guarantee. It takes none of
that best meet the needs and goals of the risk for Olympic cost overruns or
the IOC, not those of the host city revenue shortfalls
Example: Los Angeles 1984
29
The Boosters Dilemma: Transparency
VOTERS + Organizing
TAXPAYERS Committee
Less than a week after pledging a new commitment to transparency, the organizers of
Bostons bid for the 2024 Summer Olympics are refusing to make public key documents
outlining the political and budget support needed to land the Games When information
was released in January, we were clear that proprietary data would be redacted for
competitive purposes and we stand by that decision, wrote Boston 2024 Chief Operating
Officer Erin Murphy in an email to the Business Journal. - June 3, 2015
The Boosters Dilemma: Transparency
VOTERS + Organizing
TAXPAYERS Committee
Additional risk includes the challenge to promote transparency of the project while
maintaining Calgarys competitive advantage now and in the future. Based on this notion,
it is not recommended that the identified report attachments be shared in their entirety
with the public. Sharing this information could compromise Calgarys competitive
advantage if its concluded that Calgary will proceed to the bid process.
VOTERS + Organizing
TAXPAYERS Committee
34
The IOC + Calgary 2026 will ask taxpayers
to sign a blank check for cost overruns
The IOC requests that a candidate city provide a guarantee covering any shortfall
in the OCOG budget. Calgary 2026 will be asking City of Calgary taxpayers to sign
a blank check for their proposal.
35
The IOC knows bid books are fiction, but they
dont really care as long as the hosts are paying
- Dick Pound
36
Agenda
I. Introduction
37
Agenda 2020
Only seven of the forty recommendations are
actually relevant to host cities
40 7
Relevant recommendations are: #1, #2, #3, #4, #9, #12, #13
High-level description of the seven relevant
recommendations
#1: Encourages use of existing and temporary facilities, allow events to be held
outside of city/region/country
#2: Essentially repeats language from recommendation #1
#3: Relates strictly to bidding process, not actual hosting costs (savings of >$200k)
#4: Promotes sustainability (but language has been part of IOC charter since 90s)
#9: Provides goals for number of athletes and coaches, and number of events
#12: Reduce the cost and reinforce the flexibility of Olympic Games management
#13: Elevate role of the International Federations (IFs) in the planning and delivery
of the Olympic competitions
Digging deeper on the seven relevant
recommendations from Agenda 2020
45
Agenda
I. Introduction
46
Boosters are (usually) well-intentioned
But
- They become too deferential to the IOC + NOC
- They answer easy questions, but defer on difficult ones
- They overestimate their abilities and think were different,
well get it right, we can pull this off (overconfidence bias)
- They fall victim to groupthink
- They get gold fever
47
Boosters promise they wont fall victim
to fate of previous hosts
London Olympic Bid Promises London Olympic Games Outcomes
The bid submitted by London boosters to We have identified spending of around
Spending the International Olympic Committee 11bn.
estimated spending at 4.2 billion. -The Guardian, 7/2012
Of the 9,000 homes that will be built, our Of the 2,818 new apartments that were created,
Housing
target is to have 50% as affordable. 1,379 (less than half) were [affordable].
- London Development Agency, 7/2004 - Washington Post, 3/2015
48
Just like London, Boston 2024s organizers
developed unrealistically low estimates
Percentage
Bid Estimate Actual Cost Overrun June 2015 Bid Documents
London 2012 spent more than $1.6b on venues that Boston 2024 estimates will cost only $310m.
For simplicity, figures in British pounds converted to dollars at 1 GBP to 1.5 USD.
Actual exchange rate in construction period was more than 1.6 USD to 1 GBP. 49
Insurance will not cover taxpayers from
major areas of risk
Inadequate Budget Projections: Changes in Real-Estate Market: Voluntary Changes in Scope:
Source: https://www.bostonglobe.com/metro/2015/07/01/insurance-plan-would-cover-myriad-scenarios/PFPoPfR8jVis2VhrQsuBEP/story.html
To mask inevitable mistakes, boosters
play the Olympic budget shell game
51
Costs shifted to other budgets to maintain
surplus in Olympic budget
Non-OCOG Public Security +
Olympic Budget:
Permanent Venues: Infrastructure: Logistics:
This venue
was going to be
temporary, but
now we think it The public is
should be going to use
permanent. this after the
Olympics, so Weve been
its OK to use advised this is a
public funds for legitimate
it. security expense,
so that budget
should pay for it
52
Public entities end up funding Olympic
costs, not just infrastructure costs
When London 2012 faced overruns,
the government shifted funds from
away from arts organizations to
make up the Olympic deficit.
53
Olympic developers propose tax breaks or
other incentives
Boston 2024 Tax Break Per Square Foot
Boston 2024s proposed tax
breaks per square-foot of
development were many times the
value the City of Boston had
approved in other instances
54
Boston 2024s proposed Columbia Road
improvements cost less than tax breaks
Boston 2024s proposed improvements to
Columbia Road estimated at $12m, are funded
by a developer, not by Olympic/IOC dollars
57
Olympics have enormous opportunity costs
58
What a bid would mean for the city or
provincial governments
Explicit or implicit approval of IOC-requested taxpayer
guarantee for cost overruns and/or revenue shortfalls
It overstated support from key political leaders, including Speaker of the House
Robert DeLeo and Senate President Stan Rosenberg
"Bid commitments
It overstated books are from
the local universities for use of facilities and
greatest
fundraising assistancepiece of
Top 10 Losers:
63
Three Key Themes From Todays Discussion
64
No Boston Olympics Book
No Boston Olympics: How and Why
Smart Cities Are Passing on the Torch
By Chris Dempsey +
Professor Andrew Zimbalist
Spring 2017
Available on Amazon.com:
http://a.co/3Ytk7Sv
65
Contact Information
Email: christopher.dempsey@gmail.com
66
Appendix
67
Boston 2024 talked about insurance for 2+
years, but still has offered few details
National insurance experts have criticized Chicago 2016s proposed insurance
boosters claims of removing financial risk: policy was woefully inadequate:
Insurers do not cover risks that are certain to materialize,
and almost every Olympics in the recent past has had major
cost overruns. Any suggestion that private insurance will In many key areas, no insurer stands
pick that up is smoke and mirrors. between taxpayers and the risk of
revenue shortfalls or cost overruns
- Professor Patricia McCoy, Boston College Law School
It's a leap of faith, acknowledged
Chicago Alderman Joe Moore.
Theres no wraparound, no Band-Aid that says, OK. You
blow the budget by $1 billion and the insurance steps in and - Crains Business Journal
funds that. It doesnt exist.
Source: Boston Globe, Insurance for Olympics wont cover every risk, 7/1/2015; Crains, Peeling back the coverage, 9/19/2009 68
Boston 2024s proposed insurance would
not have covered Tokyos current situation
3. The facilities we have to build for Boston 2024 do not increase long-term economic productivity
- The IOC requires we build a velodrome, an aquatics center, a 60k-person stadium, etc., but it
has no requirements for transportation or infrastructure upgrades
- Boston 2024 does not require significant investment in what makes MA great: human capital
73
Most US Games have required significant
support from taxpayers
Salt Lake City 2002: Lake Placid 1980:
- Used at least $1.3 - Cost more than 3x initial
billion in federal and budget
state taxpayer subsidies
- Required a bailout from
- Organizers were the State of New York to
indicted for bribery stave off bankruptcy
Atlanta 1996:
Los Angeles 1984: - Received 9x more in
- Only bidder for 1984 federal subsidies for
Games, eliminating IOCs operations and venues
auction dynamic than what it reported in
operating profit
- Did not provide
taxpayer guarantee
Source:http://www.gao.gov/archive/2000/gg00183.pdf