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Los Angeles officials are expressing growing fears that taxpayers and the city’s coffers could face severe costs to support the 2028 Olympic Games if the city does not sign a tough agreement to ensure “zero-cost” games.<\/p>\n
Some city officials have long been concerned that taxpayers could face huge bills if the Olympics don’t generate the revenue promised by organizers. Delays in finalizing an agreement between City Hall and the Olympic Committee have heightened those tensions.<\/p>\n
The exact cost to LA and other local governments remains unknown, as officials wait to hear from LA28 and federal security agencies about exactly what services they will need. The recent controversy over the relationship between LA Olympics chief Casey Wasserman and Jeffrey Epstein has heightened uncertainty about finances among some city leaders.<\/p>\n
City Atty. Both Heidi Feldstein Soto and Council Member Monica Rodriguez issued letters demanding a contract stating that LA28 would cover any future costs to the city, as the city hosts hundreds of thousands of athletes and fans.<\/p>\n
“The contract, pending for more than six months, is needed to prevent any scenario in which funds could flow back to the LA 28 organization’s wealthy supporters and investors without reimbursing extraordinary costs funded by taxpayers,” the city attorney wrote to council members.<\/p>\n
Rodriguez agreed in a separate letter this week that the city needs a contract that assures the Olympic organization will pay for any additional costs for policing, transportation, trash pickup and more, so as not to burden taxpayers or cut “core city services.” <\/p>\n
City officials argued that it should be prioritized over LA28, a private nonprofit that is up for re-election this year, creating a “legacy fund” to finance future youth sports programs, public sports facilities and the like.<\/p>\n
“Bankruptcy cannot be the legacy of these Games,” Rodriguez wrote, without elaborating on what he meant, although L.A.’s top budget official recently estimated a deficit of “several hundred million” dollars, unrelated to the Olympics. <\/p>\n
LA28 officials responded with a statement released earlier, saying, in part, that “LA28 is committed to delivering the safest, most secure and fiscally responsible sports that will benefit Angelenos for decades to come,” adding, “We are engaged in good faith negotiations and look forward to our continued partnership with the City of Los Angeles.”<\/p>\n
LA28 chief executive Reynolds Hoover said at a press event on Wednesday that ticket sales were a means for the host committee to ensure taxpayers are not stuck with a big bill in the future.<\/p>\n
The stakes remain high for both sides. The private LA28 group needs the city’s police, fire, sanitation, roads and transportation services to organize a successful event. The city wants this Games Mahakumbh to be a success, not only to shine its image on the international stage, but also to ensure that there is enough money to pay for all the additional work that the city staff has to do.<\/p>\n
LA28 leaders estimate that the Games will cost more than $7.1 billion. He says the money will come from a variety of sources: about $1 billion from the International Olympic Committee, $437 million from international marketing rights, $2.5 billion from corporate sponsors in the US, $2.5 billion from ticket sales and hospitality packages, $344 million from licensing and merchandise and $405 million in other revenues.<\/p>\n
LA28 reports being ahead of schedule on the revenue front. But city officials worry that unexpected events \u2014 including an economic recession or natural disaster \u2014 could blow up the revenue model, with one of several wild cards being the willingness of President Trump and the Republican-controlled Congress to follow through on a pledge of funding to the Democratic-controlled city.<\/p>\n
L.A. officials have long expressed concern that Trump and Congress could delay $1 billion already earmarked to reimburse state and local governments for security, planning and other Olympics-related costs.<\/p>\n
While some others, including two elected officials and an attorney representing city staff, raised concerns, a person with knowledge of negotiations between the city and LA28 said a tentative agreement would likely go before the City Council “within two or three weeks.”<\/p>\n
The person with knowledge, who spoke on condition of anonymity because of the sensitive nature of the discussions, said negotiators on both sides should take into account how a third party, the federal government under Trump, is integral to the financing model. <\/p>\n
The source tracking the negotiations said both sides needed to make sure the agreement “paved a path to maximize the federal resources that were dedicated by Congress to sports,” adding: “The contract needs to avoid saying that LA28 is going to pay, for example, for all the additional costs of the LAPD in a way that makes the federal government say, ‘Okay, then you don’t get any federal money.’ \u201cWe can\u2019t afford to leave a billion dollars on the table.\u201d<\/p>\n
City Administrative Officer Matt Szabo, one of the negotiators for the city, took a positive stance. <\/p>\n
Szabo said, “We are invested in a successful Olympics. The organizing committee knows it needs the city and urban services to have a successful Games.” “It is in the interest of both the city and the organizing committee to hold a successful Games. We are united with all our strength and together we will succeed, or not.”<\/p>\n
The 2028 Games have been designated a National Special Security Event, placing it in the same category as major party political conventions and Super Bowls. The US Secret Service sets security plans for those events.<\/p>\n
L.A. officials have said they are still waiting to hear from the Secret Service about how wide the security “blast zone” around each athletic venue should be. The federal agency will then direct how many police and federal agents will flood those areas, which include the Los Angeles Memorial Coliseum, Exposition Park and Crypto.com Arena.<\/p>\n
Attorney Connie Rice, who represents L.A. city employees concerned about how the city will pay for the Games, said her clients still have questions. Rice, whose previous litigation practice had helped implement LAPD reforms, said that staffers who helped plan security said they had estimated that the Los Angeles Police Department and Los Angeles County Sheriff’s Department alone would need at least $1 billion to pay for additional security during the games.<\/p>\n
The city and county of Los Angeles will not receive $1 billion from the current federal allocation because several other areas, including Long Beach, Oklahoma City and the state of California, will also compete for U.S. funding. And the federal government has not yet issued its \u201cnotice of funding opportunity\u201d \u2013 setting out the parameters for claiming a share of the $1 billion.<\/p>\n
Rice argued that the city gave up its best advantage when it signed an earlier agreement to host the Games. \u201cWhen the Games are over and LA28 disbands, who will pay the bills, or who will they send the invoices to?\u201d Rice asked. \u201cThere is no obligation for LA28 to raise funds after the program ends.\u201d<\/p>\n
Los Angeles city officials expect to receive requests from LA28 by October for the services the sports organization needs at each venue. The group organizing the Games has agreed to pay any costs over and above the city’s normal expenses. But there is no clear understanding of what constitutes a traditional level of service. The massive event is expected to require a variety of services, including trash pickup, bus service, road closures, park maintenance, drinking water stations and building inspections of temporary Olympic structures.<\/p>\n
In his letter to City Council members late last month, the City Attorney raised several questions about the financial contract with LA28. Feldstein Soto argued that the games are “increased at risk” given the recent claims against LA 28 President Casey Wasserman.<\/p>\n
Wasserman’s name appeared in files about convicted sexual predator Epstein after records show the then-28-year-old sports marketer went on a two-week tour of Africa sponsored by Epstein and later exchanged risqu\u00e9 emails with Epstein’s partner Ghislaine Maxwell. Although some activists called for Wasserman to step down as LA28 president and called for a boycott of the games, the uproar has led to no apparent decline in sponsorships or ticket sales.<\/p>\n
As city attorney, Feldstein Soto is advising city officials negotiating the Olympic contract. Her letter said she would insist that “transparent audit rights and procedures” be implemented to ensure that the city’s coffers suffer no losses in support of the Games.<\/p>\n
The letter raised the possibility that natural disasters or other emergencies could cut into LA28’s bottom line. It also asks: “What if the federal government does not pay the estimated $1 billion (or) … (what if) the city’s actual spending exceeds $1 billion?” Feldstein Soto’s response: “In any case, this office believes that before any surplus funds are available for the (LA28) Legacy or Tribute Fund, all surplus funds must first be reimbursed to the City and its taxpayers, as promised.”<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
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