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What would the Olympics cost?

Coalition won’t reveal details

(Published July 1, 2002)

By JONATHAN TANNENWALD

Staff Writer

Large banners touting Olympic sports, hung from downtown office buildings and lampposts on the eve of an important U.S. Olympic Committee (USOC) visit, recently became the most visible part of a business-led group’s marketing effort to bring the 2012 Summer Olympic Games to the Washington-Baltimore region.

But some D.C. residents continue to question why there has been no public discussion of the costs that taxpayers would have to cover if Washington becomes a host city for the Games.

"The Olympics are characterized by secrecy, not just in D.C. but all the way up to the IOC (International Olympic Committee)," said D.C. resident Debby Hanrahan, who has become a frequent and vocal critic of the regional bid to host the Games.

Hanrahan and others also question what they consider to be inflated claims of benefits that local residents will derive from the Olympics.

Last year, D.C. City Council voted to authorize up to $49 million to be put aside toward covering any debts resulting from hosting the Olympics. A recent study commissioned by the bid committee estimated that hosting the Games would bring $5.32 billion to the region.

"We are on a suicidal mission here," Hanrahan said. "We will, as in every city (that has hosted the Olympics) … harass and jail and remove poor people, we will create homeless people, and we will reduce the stock of lower and middle-class housing by thousands."

The Washington-Baltimore Regional 2012 Coalition, the group which submitted the Olympics bid, was formed in December 1997 by a group of Washington and Baltimore business leaders. It is composed of a 58-member board of directors that includes representatives from Bank of America, Discovery Communications, Verizon and the Federal City Council, a powerful private business organization, in addition to the Metropolitan Council of Governments, the D.C. Chamber of Commerce and the Greater Washington Board of Trade.

Dan Knise, who heads the coalition, has made the rounds of local business organizations to talk about the Olympics bid, but his group so far has declined to make public any detailed cost estimates associated with the proposal it submitted to the U.S. Olympic Committee (USOC). However, representatives at the USOC said that Knise’s group had submitted preliminary construction costs which included references to where the funding would come from.

The coalition has estimated that it will spend $2.04 billion to prepare for and conduct the 2012 games. Of this, $1.83 billion would be new spending in the area economy; $200 million of that would go towards capital improvements.

The coalition recently commissioned a panel, headed by economist Stephen Fuller of George Mason University, to conduct a study on the impact the games would have on the region. The panel concluded that the total economic benefit to the Washington/Baltimore metropolitan area would be approximately $5.32 billion. "Direct spending" by the coalition and tourism generated by the Olympics would account for $3.17 billion, and $2.15 billion would be "indirect and induced local spending," the study said. The study did not specific exactly where that money would come from.

Ten of the 36 proposed venues for the Olympics have not yet been constructed; six of those are in the District. They include the venues for archery, beach volleyball and aquatics; the main stadium, to be called "Stadium USA;" a new arena on the campus of Howard University, which would be used for judo and wrestling; and a completely new gymnasium for Eastern Senior High School, which would be used for team handball.

Knise has said that the numbers his group submitted were part of a "conceptual presentation, totally subject to change," and that "we’re not signing any contracts right now" with any of the governments involved in the bid. Knise also said that it’s possible that no contracts will be signed until his group has won the bid, which would not come until 2005.

However, he said he thinks much of the construction costs will come from public-private partnerships.

City council members interviewed for this story said they were unable to provide any detailed information about the costs expected to be incurred by either the D.C. or federal government if the D.C. region wins the Olympics bid. Kathy Patterson, D-Ward 3, said she believes that hosting the Olympics would "generate enough money to have no net cost to the city or taxpayers."

During her testimony at the city council’s budget hearings earlier this year, Hanrahan extracted a public pledge from D.C. Council Chairman Linda Cropp that she would schedule public hearings on the Olympics bid later this year. Those hearings have not yet been scheduled, and a member of Cropp’s staff recently told The Common Denominator that it is unlikely such hearings would be scheduled before the council begins its annual summer recess.

Questions about the Olympics bid are expected to be raised during a July 11 oversight hearing on activities of the D.C. Sports and Entertainment Commission before the council’s Committee on Economic Development.

An aide to Councilman Harold Brazil, D-At Large, who chairs the council’s economic development committee, said that "at some point down the road, we have to sit down together with all the organizers and say, ‘What costs do you think we’re going to incur and how are we going to split it up?’" Brazil did not return calls for comment.

Copyright 2002, The Common Denominator