In a high-stakes media event today, Boston 2024 strived to allay concerns that taxpayers will be exposed to outsized risk for cost overruns if the city successfully bids to host the '24 Games. During the release of the anticipated “Version 2.0” of the bid, Boston 2024 Chair Steve Pagliuca and others repeatedly emphasized that they had budgeted conservatively and will obtain extensive insurance policies to guard government budgets. Among their top protections against overruns: an estimated $210M operating surplus. However, the new bid still leaves several major venue questions unanswered, including the location of a cycling velodrome, an aquatics center and a media operations headquarters. Those are historically three of the most costly Olympics projects.
MORE THAN A FEELING: Boston is confident it can generate a surplus on the actual operations of the Games, releasing a plan that would call for about $4.8B in revenue and about $4.6B in expenses, Pagliuca said. That creates a $210M cushion, he said, but it also could be considerably higher because the committee used high-end estimates for costs such as venue construction but low-end estimates for ticket sales. "We think the city and state are very well protected under this plan and we've budgeted a lot to make that happen,” Pagliuca said. But government watchdog groups and Olympic critics worry most about infrastructure costs related to the Games, which have ballooned into the tens of billions of dollars in other host cities. Boston 2024 will guard against such overruns with multiple layers of insurance: $270M in budgeted contingencies ($60M of contingencies included in project plans along with the projected surplus), surety bonds and capital replacement insurance for individual projects and an umbrella policy as a final backstop. The operating budget will carry $128M to pay for insurance premiums.
DON’T LOOK BACK: In a tweet, leading opposition group No Boston Olympics said, "Boston 2024 is presenting a plan that exposes the public to massive risk. Taxpayers are still on the hook if things go wrong.” Boston will hire private developers to build two of the largest parts of the project, a 69,000-temporary-seat Olympic stadium in the under-used Midtown section of Boston, and the athletes’ village at UMass-Boston, both the same locations as originally proposed. The USOC will hear from the Boston organizers during a regularly scheduled board meeting on Tuesday. While the USOC board has no formal action scheduled, CEO Scott Blackmun said earlier this month that the board still must be convinced Boston can win and successfully host the Games. The USOC has until Sept. 15 to either advance Boston to the international selection process or back off.
