Vancouver | A $1 Billion Hangover From an Olympic Party

[M II A II R II K]

A $1 Billion Hangover From an Olympic Party


February 24, 2010

By IAN AUSTEN



Read More: http://www.nytimes.com/2010/02/25/sp...er=rss&emc=rss

VANCOUVER, British Columbia — Josie Lombardi came downtown this week for a taste of the Olympics accompanied by a friend rather than her husband, because he is on an Olympics boycott. She was thrilled to see the Olympic caldron up close, she said, but after being told she would have to wait five hours to see an exhibit of Olympic medals, Mrs. Lombardi began to think her husband might have a point.

- “O.K., are the Olympics worth it?” Mrs. Lombardi said while stopping for lunch at Murchie’s, a venerable tea and coffee shop. “I don’t want to be too negative because there’s good and bad, but I have to agree with my husband. All he can talk about is the debt. I’m worrying about what’s going to happen next.” While hundreds of thousands of people have streamed onto the streets to enjoy (some of them to excess late at night) the Olympic party, there is still an undercurrent of crankiness and apprehension in the city.

- Well before the Games began, the global recession pushed several of the Games’s sponsors, including Nortel Networks and General Motors, into bankruptcy. Whistler Blackcomb, the resort that is hosting the Alpine skiing events, will soon be sold at auction. Security costs, first estimated at $165 million, are now headed toward $1 billion.

- As for Vancouver’s municipal government and the taxpayers, the bad news is already in. The immediate Olympic legacy for this city of 580,000 people is a nearly $1 billion debt from bailing out the Olympic Village development. Beyond that, people in Vancouver and British Columbia have already seen cuts in services like education, health care and arts financing from their provincial government, which is stuck with many other Olympics-related costs. Many people, including Mrs. Lombardi, expect that more will follow.

[Steely Dan]

my hunch is that vancouver will be fine in the long run. already in the past two weeks from casual conversations with friends and family i've heard a lot of "vancouver looks like a fantastic city, i have to go and visit it some time".

[muppet]

I'll echo that - in the long run alot more tourists, visitors and business, even wealthy immigrants will end up in Vancouver purely from the increased media profile, and putting such a beautiful city squarely on the map. It was already the destination of choice for wealthy Hong Kongers.

[krudmonk]

You guys are weighing the exposure and name recognition alone, which is what vain politicians do when deciding to drop a billion dollars on 8 NFL games a year.

[waterloowarrior]

It's not like the all the Olympic Village money is gone permanently... as long as they sell for a good price they'll be OK, although I've read that they may not get all their money back for the price of the land.

I'm pretty sure most Canadian municipal and provincial governments have seen tough budgets with spending cuts.

[miketoronto]

Canada has to get off this conservative money kick, and just do like other world cities do. Spend the money, have one great show, and just enjoy it.

We are one of the richest countries on earth, and we can afford the Olympics if we want to.

[bobdreamz]

Vancouver has been put on the map because of this exposure. The money spent is miniscule compared to the amount of future tourism the city and region will reap in the ensuing years. The city looks fantastic on TV!

[BTinSF]

You can't confuse a billion $ worth of new economic activity (tourists etc) with a billion $ of income to the city government which is apparently what is needed. I'm not sure what the local tax rate is, but you surely need a number of times a billion in increased tourism to generate that amount.

The real question is what is the post-games plan for what was built for the games like the Olympic Village: Did the city get its money's worth in infrastructure and facilities regardless of the games? If it got a billion dollars worth of new infrastructure goodies for the billion dollar debt, well OK.

[pip]

^you know it is more than just tangibles when measuring the cost/benefits of the Olympics.

[niwell]

Originally Posted by BTinSF

You can't confuse a billion $ worth of new economic activity (tourists etc) with a billion $ of income to the city government which is apparently what is needed. I'm not sure what the local tax rate is, but you surely need a number of times a billion in increased tourism to generate that amount.

This is exactly the point most people are missing. The nature of municipal finances in Canada means that a significant portion of costs will end up coming out of municipal coffers, whether directly or through the trickle-down effect. Increased tourism isn't going to make up for this. I don't have enough knowledge of Vancouver to make a judgment on whether or not the infrastructure built as a result of the Olympics was worth the costs so I won't try. However, I do know a few people who work in BCs planning sector (both municipal and private) who have relayed that the municipality and region are in for some hard times budget-wise.

And as great a project as the Olympic Village is, it's hard to deny that from a financial perspective it's been a bit of a boondoggle. If the tax regime in Vancouver is anything like Toronto's I wouldn't be surprised if the revenue stream from property taxes will actually end up being lower than the decaying industrial it replaced. The city might have higher residential tax rates though, I'm not sure.

[BTinSF]

Originally Posted by pip

^you know it is more than just tangibles when measuring the cost/benefits of the Olympics.

Intangibles won't pay debts (ask someone in Montreal).

[Double L]

This has been an issue plaguing our cities for a long time now. "Should cities accept big-league events even if they don't turn a profit from it?" I remember when it was an issue here in my hometown when we hosted the Super Bowl in 2004...and again when the Super Bowl went to Jacksonville and Detroit in the years following our hosting.

It's just something you need to have your own opinion on. It might not be worth it. Unless your city could find a way to profit from the economic impact. If you will profit from it, then do it.

[cabotp]

Originally Posted by niwell

This is exactly the point most people are missing. The nature of municipal finances in Canada means that a significant portion of costs will end up coming out of municipal coffers, whether directly or through the trickle-down effect. Increased tourism isn't going to make up for this. I don't have enough knowledge of Vancouver to make a judgment on whether or not the infrastructure built as a result of the Olympics was worth the costs so I won't try. However, I do know a few people who work in BCs planning sector (both municipal and private) who have relayed that the municipality and region are in for some hard times budget-wise.

And as great a project as the Olympic Village is, it's hard to deny that from a financial perspective it's been a bit of a boondoggle. If the tax regime in Vancouver is anything like Toronto's I wouldn't be surprised if the revenue stream from property taxes will actually end up being lower than the decaying industrial it replaced. The city might have higher residential tax rates though, I'm not sure.

I'm not 100% positive, but I do belief other than a few warehouses. The vast majority of industrial land that the Olympic Village was empty. Basically there was no industrial property tax being collected.

The city only got caught up in the Olympic Village because the global financial melt down. Will the city make a profit or not who knows. But I don't see the real estate market crashing anytime soon here.

As for some of the other infrastructure that was built.

Canada Line (subway or metro line from downtown to the city of richmond and the airport). While this line was never part of the Olympic bid. I do feel the Olympics helped to push it along and set a deadline date. This to me is one of the biggest benefits the city got.

Convention Centre. This is a plus. Although it will only be that way if we can get some good sized conventions here. Either way it should mean more people doing business which will helps local sales.

Things like the Olympic Oval and the new curling ring and new upgraded riley park community centre, killarney community centre, trout lake community centre. The Oval and curling rink will mostly be converted into sports community centres. It is hard to measure the long term benefits other than it gives people more places to swim, skate, play basketball, and or other sports. The long term benefit is a healthier population.

Up at Whistler there is of course the slide centre, sky jumps, and the caligan valley region with the cross country, biathlon, etc. If everything is kept. Long term benefits is more practice ground for athletes and world cup hosting in the future. Again hard to put a price on.

[cabotp]

Originally Posted by bobdreamz

Vancouver has been put on the map because of this exposure. The money spent is miniscule compared to the amount of future tourism the city and region will reap in the ensuing years. The city looks fantastic on TV!

I must say having lived here all my life. I always wondered how the TV view would look.

As for tourism whether it will increase or decrease remains to be seen.

[pdxtex]

what city would bother to hold the olympics if they didn't think there would be a long term benefit? its a big expensive event thats held in big expensive cities. vancouver will be fine.

[TonyAnderson]

The long-term benefits of the exposure have to be a big part of why cities want the Olympics. There's no way they could think the events alone would turn them profits?

This is why I wonder if big name cities, like London, will actually get anything out of it. The Olympics did wonders for Salt Lake City and still are, but that was because Salt Lake City was a relatively unknown place.

[MolsonExport]

As a (former) Montrealer, who is old enough to remember the crushing debt legacy of the 1976 Summer games, I am not one bit surprised that this has happened. The difference being, as some have suggested here, that Vancouver will reap rewards (image, recognition, investment and tourism) from hosting the Olympics, whereas Montreal never did (we did, however, inherit a shitty stadium that started falling apart long before it was ever finished, thus needing constant cash infusions from, yup-you guessed it!, Montreal (and Quebec) taxpayers!!"). Montreal achieved its recognition pinnacle with Expo '67. Yes, Vancouver held Expo '86, but the latter was but a mere shadow of that of Montreal's.

[pip]

Originally Posted by BTinSF

Intangibles won't pay debts (ask someone in Montreal).

you know what I mean.

Intangibles such as increases awareness of the city, puts the city on the map so to speak. Does it always work out no, its a gamble. But rest assured the whole world knows of Vancouver now. How that pays out in the future whether it be increased business locating there or give Vancouver a glance over where they wouldn't have before, more residents moving there, etc. is impossible to measure. The bigger the name the more likely people will do their stuff there. Vancouver is now a household name in the world. There is a reason every city just about wants an Olympics.

[Continental180]

well thank god the US isnt having any olympics anytime soon.

[NYaMtl]

Originally Posted by BTinSF

Intangibles won't pay debts (ask someone in Montreal).

We did get several lasting infrastructure improvements that were a big part of that billion dollar debt, often forgotten among the public and media.

http://maisonneuve.org/pressroom/art...lympic-legacy/