3 Challenges for Boston 2024's Olympic Bidding Documents
The site of the proposed Olympic Stadium in Boston.	–REUTERS
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It's been a couple of days since Boston 2024 released the bidding documents it submitted to the United States Olympic Committee (embedded at the end of this article).
Boston 2024 has said time and again that the plans for a 2024 Boston Olympics will likely change as the bid moves forward. But these are the plans that got the city the nod from the United States Olympic Committee, so they're well worth scrutinizing.
Here are three things that stick out after taking some time to digest the documents:
Who's paying to develop Widett Circle?
The plan to turn Widett Circle into the site of a temporary Olympic Stadium would, in organizers' minds, serve as the catalyst to create a new neighborhood called Midtown. (The jury's out on the quality of that name.) Boston 2024 says that after the Olympics end and the stadium comes down, the area would be set for plenty of private development, some of which may even start before the games.
Boston 2024's budget for putting on the Olympics includes the costs of building temporary venues, including the stadium. However, the costs of assembling and preparing the land for the stadium are included in a different budget. (At $3.4 billion, that budget would also include the costs of building an Olympic Village and media and broadcast centers. Boston 2024's documents say both would be paid for through public-private partnerships.)
In Widett Circle, the process would be complex. Private parcels would need to be acquired, such as the land currently occupied by the New Boston Food Markets—who, by the way, have said they're not looking to move. Existing structures on the "Midtown'' parcels controlled by public bodies—a city tow lot, an MBTA facility—would need to be relocated. And all five parcels in the area would need to be consolidated and managed.
Who would do that? Boston 2024 suggests "the land and infrastructure improvements will be controlled by a public authority. All improvements will be controlled by the same authority for the duration of the 2024 Games.'' The documents also say this could all be done under "expanded authority of existing public agencies or the creation of a new public agency.'' As for how the stadium site improvements would be funded, Boston 2024 says: "acquisition and improvements will be financed by the issuance of bonds''—presumably that means by the controlling authority— "supported by value creation for private development.'' In another document, the group says it "has devised a financial strategy that captures increased land values and new tax revenues to finance the cost of land assemblage and infrastructure upgrades'' around Widett Circle.
Between the creation of a public agency, the relocation of public facilities, any tax money put to use, and perhaps the issuance of bonds, it seems safe to say some public money would go toward prepping the land. In a poll released last week, a majority of Bostonians said they supported hosting the Olympics, but not if public funds were used. The question about the use of public money didn't mark any distinction between the budget to operate the Olympics and public funding in preparation of the games.
Boston 2024 has said that infrastructure improvements would be publicly financed, but the organization has mostly pointed to transit projects that were already in the state's plans—not the creation of a neighborhood that would come as a result of the Olympics. The documents specify that the land prep costs would be separate from the $5.2 billion in expected spending on transit projects that would serve the games.
Boston 2024 projects that about $200 million would be required to pay for preparing the stadium site. That's a sliver of the multi-billion dollar grand total hosting the Olympics would cost, and it's not clear just how much of it would come publicly. Boston Mayor Marty Walsh had hedged out some room for this kind of spending previously, saying public funds may be put toward land use purposes. But it's a cost that hadn't been explicitly accounted for previously, and it warrants further discussion.
How realistic is the operating budget?
The Olympics operating budget, Boston 2024 has pledged, would be entirely privately financed. Operating costs would include things such as building temporary venues, technology installation, paying event workers, and more.
Boston 2024's operating budget includes revenue from ticket sales (projected at $1.1 billion); sponsorships ($1.595 billion); and a contribution from the International Olympic Committee (about $1.2 billion). How the rest of the projected $4.7 billion budget would be covered is a little less concrete.
A chart in Boston 2024's budgeting document shows that the committee is anticipating somewhere between $600 million and $700 million in "other'' revenues. However, Boston 2024 has only specifically forecast for $175 million: $155 million in merchandise licensing fees and $20 million in commemorative merchandise like stamps and coins.
The document does not specify where the rest of the auxiliary revenues would come from. It suggests some money could be raised by selling naming rights to the temporary venues. Whether that is considered separate from its sponsorship budget isn't clear. Similarly, the group says: "To further support licensing sales, Boston 2024 will partner with the USOC to license Team USA marks to merchandisers,'' but it's not obvious whether that's considered distinct from the licensing revenue already accounted for.
Boston 2024 also says it "will work closely with the USOC to identify and execute new revenue generating programs.''
On the other side of the budget, about $450 million in "other costs'' are built in, so the additional revenue and additional cost figures may work in tandem; with new revenue may come the opportunity to take on new costs. But critics of the Olympic bid have said they are very skeptical about the estimates for the operating budget and that they expect it to expand significantly, as budgets tend to do for the Olympics.
There's some scary language for renters.
Several businesses and stakeholders in areas that would be developed in anticipation of the Olympics have already expressed concerns. On the proposed stadium land, the owners of the co-operative New Boston Food Market have said they have no plans to leave. Some property owners in what would be an Olympic Village at Columbia Point told The Dorchester Reporter Thursday that they were caught off-guard by plans for the area.
Meanwhile, Somerville doesn't seem entirely pleased with a plan to put a permanent velodrome in Assembly Square, and caretakers of the Boston Common are objecting to plans to put a beach volleyball stadium there.
Another potential concern brought up by critics of the bid in recent months has been the potential for residents to be displaced from their homes. One of the Boston 2024 documents suggests that apartments could be put to use to host spectators.
"Using a third-party specialist to manage the operation and create a streamlined program for Boston-area landlords, leases signed for September 1 of the year preceding the Games could be executed as 9-month leases, as opposed to typical 12-month leases. Regulations would then be in place to support reasonable rates for spectator accommodation for the duration of the Olympic and Paralympic Games,'' it reads.
The proposal comes after two paragraphs about off-campus housing for students, so that's likely what this idea is geared toward. Rather than planning around students who leave the city for the summer sublet their apartments, landlords could get the opportunity to open the home up to spectators during the Olympics. That would be in keeping with other plans to take advantage of the summer student exodus; Boston 2024 also intends to use some on-campus housing to help house media.
Even if that's the case, though, it's hard not to read that paragraph as a potential threat to renters throughout the region. A proposal from Boston 2024 to get renters out of their homes does little to assuage concerns of residential displacement from the Olympics.
(Update, 2/5/14: Boston 2024 says it is scrapping the nine-month lease plan, The Boston Globe reports.
Overall Games Concept
Overall Games Concept by BostonDotCom
Key Venue Plan
Key Value Plan by BostonDotCom
Transportation, Accomodation, and Security
Transportation, Accommodation + Security by BostonDotCom
Sports + Venues by BostonDotCom
Political and Public Support
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Bid and Games Budget
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TOPICS: Olympics