Organizers unveil financial guarantee for Chicago's bid
CHICAGO -- The chief organizer of Chicago's bid for the 2016 Olympics thinks city residents will support the games -- even if it means $500 million of their tax money is at risk.
"I don't think the balloon has been burst," Chicago 2016 chairman Patrick Ryan said Friday during a news conference to announce details on the city's proposal for a financial guarantee for the games.
The U.S. Olympic Committee is waiting to see Chicago's final package for a financial guarantee. USOC officials told city organizers during an inspection visit earlier this week that they want the government to "have some skin in the game" to please the International Olympic Committee.
The plan, first announced publicly Friday afternoon following a private briefing for city aldermen, would put the city on the hook for up to $500 million if the games' operating budget lost money.
An Olympic financial fiasco is highly unlikely, Ryan said. The organizing committee projects a budget surplus of $525 million, an estimate organizers believe is conservative. That surplus is the first of a five-layer structure of financial guarantees the city will submit to the USOC.
If the games ran in the red, the first $200 million of losses would be covered by money the city expects to make by selling rights to build the planned lakefront Olympic Village and the rental of luxury suites at the Olympic stadium, Ryan said.
The next $250 million in losses would be covered by the city. After that, the next $250 million in losses would be covered by private insurance and other undetermined public money, which Ryan said he wouldn't discuss.
Finally, the city would stand behind a final $250 million guarantee to dig out from an Olympic financial shortfall.
Dana Levenson, the city's chief financial officer, said the chance of city money being tapped is "practically nonexistent." He said the money would come from "cash on hand, or we could bond it out." Asked whether property taxes would be used, Levenson said flatly, "No."
Chicago mayor Richard Daley previously had said taxpayer money would not be used for the Olympics. Ryan said USOC officials advised organizers just this week that government guarantees are necessary to win an international bid.
Ryan said organizers would continue to seek private money to guarantee the games to put more distance between the city and financial risk.
Though cost overruns for the Olympics are common, deficits for the organizing committees are rare. A year after the Turin Games, organizers reported a projected shortfall of $32 million on their operating budget of $1.58 billion, believed to be one of the first Olympic deficits in decades.
The financial details overshadowed a second announcement at the news conference. Organizers announced the site for the $78 million Olympic aquatics center -- where swimming and diving events would be held -- would be in Douglas Park, a West Side city park. The center would be a permanent swimming facility that could be used by the neighborhood after the games.
Copyright 2007 by The Associated Press
