Political Notebook

Dan Walters: Los Angeles could be Olympic winner and loser

Los Angeles moved closer last week to becoming the venue for the 2024 Summer Olympics when voters in Hamburg canceled its bid.

That leaves Los Angeles facing only Paris, Rome and Budapest in the jousting before the International Olympic Committee, having become the U.S. candidate after Boston, the original American candidate, withdrew due to stiff local opposition.

Mayor Eric Garcetti and other civic boosters are beginning to sense a real chance for Los Angeles to host the games for the third time, seeing it as a shot in the arm for a city still struggling to emerge from the Great Recession.

After all, boosters claim, the last time the games came to the Southland, in 1984, they were a roaring success, even turning a profit rather than experiencing the multibillion-dollar cost overruns and deficits that have plagued other host cities.

But that was then and this is now. Los Angeles is a much different place than it was in 1984, and not in a positive way. Its aerospace industry collapsed in the 1990s, hundreds of thousands of the industry’s workers left for more hospitable climes. The city has become something of an economic drag on the state.

By using existing venues – such as the Los Angeles Coliseum, built for the 1932 Olympics – and keeping a tight lid on expenses, organizers say, the city can run a profitable event on a $4.5 billion budget.

That’s a small fraction of the $20 billion London spent in 2012 or the $40 billion the 2008 Beijing games cost, which sounds good, but big public projects tend to bust budgets.

And if the real cost is much bigger, a little thing called Basic Principle No. 4, just two paragraphs in the host contract that bidding cities must accept, comes into play. It would make Los Angeles financially responsible for any deficits.

That provision – plus security and traffic fears and other impacts – was the fatal blow to boosters in Boston and Hamburg and is raising eyebrows in Los Angeles, even though Garcetti is, with City Council approval, making the key pledge.

City Administrative Officer Miguel Santana and Chief Legislative Analyst Sharon Tso told the City Council in August that they couldn’t “verify, validate or further explain the budget” that the LA24 committee has offered to justify its projected profit.

This is dangerous territory for a city government that has trouble meeting basic service needs. LA24 will try to persuade the IOC to waive the guarantee, as it did for Los Angeles in 1984 when no other cities wanted the games, but other bidders have since failed to get a waiver.

Were Los Angeles not able to get one, there are indications that city officials would turn to the state government.

When Los Angeles was bidding for the 2016 games, the state set aside $250 million to fatten its bid. But that was when former bodybuilder Arnold Schwarzenegger was governor.

Would Jerry Brown be as enthusiastic if Los Angeles sought a state backup? And after San Bernardino, does California really want the Olympics and their security issues?

We await the answers.

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