Recession Shadowing Chicago Bid for Games

Recession Shadowing Chicago Bid for Games
By MONICA DAVEY
Copyright by the Associated Press
Published: July 26, 2009
http://www.nytimes.com/2009/07/27/us/27olympics.html?_r=1&th=&adxnnl=1&emc=th&adxnnlx=1248732834-bxR07n9mGOx76XVPBZ7Q2Q


CHICAGO — On a recent afternoon, Mayor Richard M. Daley delivered his annual speech on the condition of the city he has run for 20 years. Revenues may fall $250 million short. Some city workers must take 15 unpaid days this year, including Mr. Daley. More than 400 workers were laid off that very afternoon, after talks with two unions collapsed.

Leaflets opposing the effort to hold the Summer Games in Chicago were laid out last month near the Olympic Museum in Lausanne, Switzerland, where Chicago 2016 lobbied for the event.

In the same address, Mr. Daley pressed forward with the city’s efforts to host the 2016 Summer Olympics, which carry an expected $3.3 billion price tag. A decision by the International Olympics Committee is due in October, and Chicago is considered a favorite among the four finalists.

Polls here suggest broad support for bringing the Olympic Games to the city. But increasingly, the economic downturn is taking a central role in the local debate over the bid as more residents raise concerns that Chicago taxpayers, already struggling, could be left paying the bills despite assertions from organizers that no city dollars will be needed.

“How do we know?” a resident, Douglas Brown, demanded of leaders of the Olympics bid during a recent neighborhood meeting on the South Side.

“We can’t take your word for it,” Mr. Brown said, adding, “When do we get our guarantees to make us sleep at night?”

At the same time, Mr. Daley and other supporters of the Games argue that the Olympics would be a force — perhaps the force — to lift Chicago from this financial gloom, with seven years of new construction, jobs and tourism.

Asked about the difficulties of lobbying for an Olympics bid during a recession, Lori Healey, the president of Chicago 2016, the bid committee here, said: “I think it makes it easy. People are hungry for jobs and opportunities.”

Earlier events that placed Chicago on an international stage, Ms. Healey said, also came during periods of financial gloom: a World’s Fair in 1893 and again in 1933.

To hear Ms. Healey and other bid leaders tell it, there is no downside. If the International Olympics Committee were to choose Chicago over Madrid, Rio de Janeiro and Tokyo on Oct. 2, advocates predict the Games would not only break even but would also make money (as have, they say, earlier Olympics in the United States), generate more than $22 billion in indirect economic impact on the city and create $1 billion in new tax revenue. Many of the sites needed for the events would not require construction because they already exist.

Organizers say private financial support is mounting, with $60 million raised so far for the bid, and no city dollars are expected to be needed for either the bid or the Games.

On that last point, however, residents of Chicago seem skeptical. They have heard promises before.

This spring, a $1.15 billion deal to privatize the city’s parking meter system turned into a fiasco after City Hall’s inspector general called it a dubious financial deal and after motorists said they poured money into fancy new meters that, in turn, spat out error messages. A few years ago, Millennium Park, a downtown centerpiece, opened behind schedule and millions of dollars over budget.

“You all are projecting we’re going to make a lot of money,” a resident, Robin Kaufman, told Olympics planners at a neighborhood meeting, one in a series intended to shore up support. “But the bankers were projecting they were going to make a lot of money. Bernie Madoff was predicting he was going to make a lot of money.”

Ms. Kaufman lifted a sign that read, “No Blank Checks.”

At a high school auditorium on the West Side, where the bid leaders showed glossy Olympics schematics and stood beside toned former Olympians, Stephanie Patton asked, “Why should we trust you?”

Even without a city having been picked for the 2016 event, Chicago agreed this summer to spend $86 million on land for an Olympics village. Bid leaders say private developers will ultimately foot the bill for a project that is to create permanent housing regardless of the Olympics.

Bid leaders say the Games themselves are expected to make $450 million in profits. In case of a shortfall, though, a “safety net” package for the Games will include an expected $1 billion in private insurance, according to bid leaders, as well as pledges from the State of Illinois of $250 million and the City of Chicago of $500 million.

Then last month, Mr. Daley indicated that he would sign a host contract required by international Olympics officials, including a standard blanket provision offering the city’s backing — one that Chicago leaders had earlier said they hoped to modify.
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The notion that the city could then be responsible beyond $500 million “set off some alarm bells” for aldermen, one of them, Joe Moore, said. Mr. Moore added that the City Council was seeking more details before it signed off on it. And a group here opposed to the event, No Games Chicago, said the prospect seemed to have suddenly stirred an outpouring of interest from people who had been silent on the Olympics.

“The levee broke around that issue,” said a founder of the group, Bob Quellos.

What strikes some residents as particularly puzzling is the bid committee’s refrain that, as a private nonprofit entity, it is separate from city government and public money. Technically, that may be, but skeptics note the committee and City Hall share goals and often seem intricately intertwined; Ms. Healey, for instance, stepped down as the mayor’s chief of staff to lead the committee.

Crucial to maintaining residents’ support for the Games, polls suggest, is convincing them that their dollars will not be spent. In February, a poll by The Chicago Tribune found that 64 percent of residents of Chicago and its suburbs favored having an Olympics but that 75 percent were against the use of tax money to cover shortfalls.

At one of the community forums, a city official likened the efforts of those planning the Olympics Games to Jean Baptiste Pointe DuSable, who is believed to have been the first non-Indian settler of Chicago, and Daniel H. Burnham, whose 1909 Plan of Chicago largely designed the city with the long strip of lakefront parkland that defines it.

Then the bid leaders brought out their big guns for these crowds: a videotape of Barack Obama, then a candidate for president, in Chicago, his hometown, smiling and shaking hands with Mr. Daley during a rally last summer for the bid and declaring his wish that an Olympics reveal Chicago as “not just a city that works, but a city that inspires.”

Patrick G. Ryan, the founder of the Aon Corporation and the chairman of the bid committee, told one crowd that the thought that private money being raised for the Games might otherwise pay for schools, garbage collection or city workers’ salaries was wrong.

“To say we could spend the money either hosting the Games or on something else is really a false choice,” Mr. Ryan said. “This money only comes in if we win.”