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≡ L.A.’s RISKY BUILD ≡
As soon as the euphoria of the 2017 award of the 2028 Olympic Games to Los Angeles had worn off, the Los Angeles City Council has continuously wrung its hands with worry over potential operating losses by the wholly private Los Angeles Organizing Committee for the 2028 Olympic and Paralympic Games.
As part of the bid guarantees to the International Olympic Committee, the City promised to cover the first $270 million in losses, with the State of California responsible for the next $270 million and Los Angeles in the hook for the rest.
No matter that the 1932 Tenth Olympiad Committee – in the depths of the Great Depression – returned a stunning $196,267 surplus. Or that the Los Angeles Olympic Organizing Committee for the 1984 Games had revolutionized sports marketing and revived the Olympic Movement with minimal building and produced a $232.5 million surplus.
For 2028, the organizers have created a new revenue stream with the International Olympic Committee approving a pilot program – which will become permanent – of venue naming rights, which for 2028 will mostly be confined to temporary sites for the Games.
Moreover, the 2024/2028 bid was founded on the concept of no new venue construction. Venues would be either fully existing, or temporary sites would be created and then returned to their former state after the Games.
LA28 has kept that promise. But the City of Los Angeles didn’t.
In an astonishing bet on itself, coming a few months after an emergency effort to close a $1 billion budget gap for fiscal 2025-26, the City Council approved on Friday – by 11-2 – to undertake a frantic expansion of the Los Angeles Convention Center at a currently-projected cost of $2.62 billion.
This came as the discussion over expanding the Convention Center – opened in 1971 and first expanded in 1993 – had been going on for 10 years or more. Now, because the 2028 Olympic Games was staring the Council in the face, the decision had to be taken last week.
As Chief Legislative Analyst Sharon Tso explained in the 16 September Finance & Budget Committee meeting:
● “The real concern that we have is really about Olympic readiness. When we embarked upon this, the whole purpose was to do this for the Olympics. And ironically – ironically – where we’re at, we could actually compromise the delivery of the Olympics, by moving forward on a project that could possibly be delayed for any number of reasons.”
● “I will remind you that there are at least 10 events that will be taking place there, as well as six other events that will be using adjacent facilities there. That facility, that whole sports park, will be utilized every day by LA28. Every day. They are expecting over a million ticketed people who will be attending everts there.
“And any risk that compromises the delivery of that, it gives me great concern. And we could be on the hook for additional liability and the fact that we worked so hard to maintain venues here in the City makes me think really hard about that. And so that is of great concern.”
So the City Council, which has continuously regaled LA28 with its concerns of the finances of the Games, has now folded itself like a taco, taking a $2.62 billion or more gamble that the Convention Center expansion will get substantially done by 31 March 2028, with the project to be finished after the Games, in 2029.
LA28’s exclusive use date for the Convention Center is 1 June 2028, so there are a couple of months after the stop date, but the organizing committee will need non-exclusive use to the site for cabling, deliveries of materials, site visits and so on.
So where LA28 has continuously modified its venue plan to save costs and increase revenue, most recently the move of diving from the LA84 Foundation/John C. Argue Swim Stadium in Exposition Park to the Rose Bowl Aquatics Center in Pasadena, the City Council has done the opposite and rolled the dice on a major facility for the Games in downtown Los Angeles.
The LA28 organizers plans to use the Convention Center for fencing, judo, table tennis, taekwondo and wrestling for the Olympic Games and boccia, para judo, para table tennis, para taekwondo, and wheelchair fencing for the Paralympic Games. Plus, part of the Convention Center will be used for gymnastics warm-up facilities, with the competition at the adjacent Crypto.com Arena.
If the project is not ready for LA28 use by the agreed date, the City will be liable for the cost to the organizing committee to relocate the sports and any shortfall in revenue from using a smaller site.
Rest assured, LA28 has already started planning for this, because the Games will not be delayed from its 14 July 2028 opening. But any future City warnings about LA28’s finances can no longer be taken seriously. The City Council is now all about risk and not about security.
Questions will quietly also be asked now at City Hall and at the LA28 headquarters about other City services during the Games. As Tso told the Budget & Finance Committee:
“We have real fiscal problems right now. We really do. We just completed a budget process that was very brutal, and if you’re happy with the level of service that we have today, then this is the project for you. If you want to devote pretty much all of your economic activity in the next few years, this is your project.
“But if you’re happy with the level service, that’s what you’re going to get with this project, because you will be very, very limited in terms of being able to add any additional firefighters in the next decade, any additional police officers, improving your Rec & Parks services, paving another street. That is all going to be at risk.”
Maybe LA28 should consider moving the sports in the Convention Center now and just keep the warm-up area for the arena events, in the close-by West Hall. But what will the Council say about moving more events out of the City of Los Angeles? Sacrilege! Or will they agree to stave off a potential $100 million or more in liability?
The financial foundation of the ultimately successful 1984 Games was minimizing construction. The 2028 organizers want to build no permanent sites. Now, it is the City of Los Angeles which is rolling the dice.
¶
It’s not all gloom at the LA28 offices in downtown L.A., a few blocks from the Convention Center.
The local beach communities news site The Argonaut reported last week:
“Facing sexual abuse settlements, growing costs and declining revenues, Santa Monica has declared a state of financial distress.
“The city council unanimously approved the declaration of financial distress last week, establishing a ‘tool’ strengthening its arguments when applying for grant funding or other types of external support. Through this motion, the city is not moving to declare fiscal emergency, which would affect city services.”
Santa Monica rejected LA28’s interest in establishing the beach volleyball venue in the city, which would have brought significant positive publicity to the beachside community, and the organizing committee walked away in March 2024. Beach volleyball will be held in Long Beach, the “second city” of the 2028 Games.
No one – no one – at LA28 is celebrating the tough fiscal situation in which Santa Monica finds itself. But there was probably at least one smirk.
Rich Perelman
Editor
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