THE BIG PICTURE: Los Angeles City Council committee approves LA28 Games Agreement; Wasserman says LA28 has over 50% revenue contracted!

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The Los Angeles City Council’s Ad Hoc Committee on the 2028 Olympic and Paralympic Games unanimously approved, with minor modifications, the proposed Games Agreement between the City and the LA 2028 Olympic organizing committee.

Six of the seven members of the committee were present for an online meeting across more than two hours. The detailed Games Agreement, posted on 17 November, was approved intact, but with the exception that the plan for involving community businesses be delivered a year earlier than specified – by 31 March 2022 – and reported against every six months thereafter.

After more than a dozen public comments, most of which were supportive of the Games coming to Los Angeles and the agreement itself, the six Council members asked questions of the City’s negotiating staff and LA28 Chair Casey Wasserman for nearly an hour and 45 minutes. While there was extensive emphasis on avoiding any financial risks for the City, even more attention was paid to contracting opportunities for local business and jobs for local residents:

● Councilman Mitch O’Farrell, head of the ad hoc committee, explained:

“This agreement addresses the key elements that were brought up during the committee hearings, including the local hire provisions, small business involvement, a thoughtful, comprehensive approach to the arts and culture, comprehensive insurance policies, environmental impact protections, in addition to legacy.”

Sharon Tso, the City’s Chief Legislative Analyst and one of the negotiators of the proposed contract:

“This Games Agreement is intended to serve as a template for further negotiations and discussions and commitments of LA28. … What this Games Agreement was intended to do was to protect the City from financial risk and also to establish a process by which we would address very important City policies and programs, and this Games Agreement essentially creates the vehicle for that public input and engagement for the very specific details of each one of those important City policies and programs.”

● Council member Paul Krekorian, one of the Council’s spending watchdogs:

“I think the work that we’ve done collectively on this committee over the course of the last few years has made this Agreement that’s before us now such a belt-and-suspenders kind of agreement that I’m satisfied that, it’s not without risk, but the risk is minimal, given the upside potential. We’ve crafted that in just about every way imaginable.”

● Council member Gil Cedillo noted the additional money that the Games will bring to City workers:

“When we talk about more services for the City, the City going beyond its normal and customary processes in delivery of services, I look at this as overtime. I look at this from the perspective of the City worker, the County worker and State worker. As a representative for the City, I welcome and embrace these opportunities for us to do more work. Because it means these families that are part of the City family will have an opportunity, and will budget and anticipate that they are going to do more work. There’s going to be more clean-up, there’s going to be delivery of services, there’s going to be more overtime. There’s going to be more experiences for them to have for them and their families. So I see this as a very positive thing.”

LA28 Chair Wasserman answered several questions, but also made a bombshell announcement about the organizing committee’s financial status:

“I think it was explained that there is a baseline of services that the City operates at, and our job is to make sure that any costs above that baseline across City services is reimbursed fully by LA2028. So, we worked very clearly with the City to make sure that the City was protected. We weren’t asking for more for free; you know, whatever the City does, it does, and whatever is needed beyond that is a requirement of LA2028 to reimburse the City for those services. …

“We have no requirements for new venues. We have no requirements for additional infrastructure. We have no requirements for additional hotel rooms. Everything we [need] is in place today, in fact, it was in place when we put our bid in in 2016, and that bid is the bid we would deliver today, if we didn’t have new venues popping up that create more opportunities.

“Even the rail lines that were under construction in 2016, or the airport [expansion] that was under construction in 2016 was not part of our delivery plan for 2028. So, our plan was what was in place in 2016 and we believe that plan is great. We believe that plan will continue to improve. But, the risk for Games in traditional cities comes from a cost perspective; our risk comes from a revenue perspective, if we can’t deliver the revenue to cover the costs, although as we sit here today, with well over half our revenue contracted, and we are prepared to deliver the Games – if we had to – with the revenue we have today.

“Now we don’t believe that will be our final revenue number. We feel very confident in our ability to drive revenue over the next seven years because of the economic platform that is both Los Angeles and the United States, and our ability to leverage incredible venues, incredible universities, incredible civic locations to make these Games truly unique.” (emphasis added)

The LA28 budget is $6.884 billion.

However, Council member Paul Koretz complained that a souvenir order recently placed had come with some defective merchandise; Wasserman promised to “dig into it” and fix the issue.

Cedillo also took strong issue with those critics who cite surveys of past Games which suffered from large cost overruns:

“I think we need to say very clearly that those studies that were referenced [about Olympic cost overruns] are closer to fraud, or it’s closer to fraud to suggest that those guide our analysis and perspective. They do not apply to the City of Los Angeles, and so we should not engage in some type of Olympic hysteria as we go forward.”

O’Farrell closed with an interesting perspective on a Games which is being privately organized, but which might have an aspirational impact on the City government going forward:

“My goal, in being a member of this committee all these years and now chairing it, has always been and will continue to be seeing a better Los Angeles the day after the 2028 Olympic Games conclude. We approach our task with a clear recognition of the considerable challenges that currently face our great city, to get the best Olympic Games agreement ever of any city, and one that helps us build a more livable and equitable Los Angeles, post-2028.

“I think of the 2028 Games as a prime motivator to leverage our collective resources to make real and visible progress on the production of coveted affordable housing, homelessness, climate change, equity – social and racial – and not, as some have claimed, to sweep our challenges outside, or under the rug, or hide anything. Nor can we allow our approach to bringing a successful Olympics to Los Angeles be led by fear, cynicism and negativity.”

With the 6-0 vote on the Agreement with the amendments on the dates, the matter will be forwarded to the full City Council for its review and approval.

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