The $51 billion price tag of the Sochi Olympic facilities shone a bright light on the capital investment required to host the Games. Many financial analysts speculate that although the bid committees for the Games suggest financial benefits, many cities are left with aging structures that they need to support. As the 2014 Olympics draw to a close, Sochi will pass the torch to the next venue while joining the ranks of past hosts. The question is, can future venues like Rio de Janeiro and Pyeongchang learn from the past, effectively evaluate the present and thus plan for the future? Below are some lessons learned from past Olympic attempts at program change.
Athens: Understand your future funding needs
While London has been successful driving traffic to their 2012 Olympic venues, cities like Athens have not been so fortunate. Athens allowed their once breathtaking facilities to fall in to disrepair and continue to pay millions of dollars to maintain their unused structures, increasing the financial pressure on a country already in crisis.
“Athens staged the Summer Games in 2004, with a final price tag of more than $15 billion. That contributed to the country’s enormous debt load, which sparked the current economic crisis and bailout. The games did spur development that may not have been built otherwise, including an impressive metro, highways and an international airport. But a decade after the games, many of the 24 Olympic venues remain unused.”
Vancouver: Use what you have, build only what you need, plan for future use
The 2010 Winter Olympics in Vancouver featured a $7 billion price tag. Vancouver made use of existing structures like the BC Place Stadium for opening and closing ceremonies and GM Place (now Rogers Arena) to house hockey. They also used the event as a chance to make investments in infrastructure that would have long lasting benefits.
“…there were major benefits in the form of three massive infrastructure projects – the Sea-to-Sky Highway upgrade, which changed a dangerous, winding mountain road into a safer, faster highway; the construction of the Canada Line, which provided rapid transit to Vancouver International Airport and several communities on the route; and the Vancouver Convention Centre, which gave the city a large, modern conference venue overlooking the harbor.”
Vancouver Olympics worth the $7-billion price tag, study says
The Globe and Mail
London – Plan for changes in programmatic goals
In 2005, London won the bid for the 2012 Olympics and from that point on, the Olympic Delivery Authority and politicians alike hammered home the idea of legacy. This place that would be built for a few weeks in the summer and cost $13.4 billion would also transition to a functional community for years to come. Since the closing of the Games, the park has been under construction, converting it to its permanent use. Unlike many of its predecessors, all 8 of the permanent Olympic structures have found a post-Games use.
“When it is completed there will be two new schools, 1.9 million square feet of retail and entertainment areas, 22 miles of cycle- and footpaths, nine miles of new roads and four miles of waterways – and five world-class sporting venues. To help ease London’s housing shortage there will be about 8,000 new homes.”
One year on: the transformation of London’s Olympic park
This can all be attributed to a more progressive approach to developing the Olympic site. Ingrained in the planning process for the Games was the flexibility for post-Games use, which so many cities fail to plan.
“‘In the future the park has got to have many functions. We want it to have that magic we saw at the Olympics and Paralympics, but it can’t be a Disneyland with razzmatazz every day. It has to have days where it is tranquil, when people can walk the dog, fly a kite and have a picnic. Then on other days we want major events, to have it as a fantastic destination and visitor attraction. We want to get that balance right, and that is quite difficult.’”
Dennis Hone, the chief executive of the London Legacy Development Corporation (LLDC)
One year on: the transformation of London’s Olympic park
Sochi – Choose partners and suppliers wisely
Now that the 2014 Games at Sochi have come to a close, Russia must now take on the task of supporting these investments. Though building the winter venue in a subtropical location may have seemed like a daunting challenge, the real challenge now is repurposing the $51 billion investment for the future. Sochi will be the site of the 2018 FIFA World Cup but can it attract enough visitors to otherwise support such expenditure? And more importantly, how did they run up such a bill?
In 2007, Russia estimated it would cost $12 billion to host the Sochi Games but ended up spending more than four times that, making it the most expensive Olympics ever. The source most analysts point to is corruption. According to a prominent former Russian deputy prime minister, Russian officials and businessmen have stolen $30 billion during the years leading up to the Games. As reported in our previous post, Developing and Managing the Sochi Facilities, missed construction deadlines, changes in leadership, and corruption led to a swiftly inflating budget.
“In the six and a half years since the I.O.C. awarded the 2014 Winter Olympics to Russia, the state has disbursed more than $50 billion to prepare Sochi and its surroundings for the Games. Most of that money is being paid directly from the federal budget to various contractors. Billions go through Olympstroy, the state Olympic construction authority, which has had four directors in six years…How much of Russia’s $50 billion has gone to fund Olympics-related activity and how much covers kickbacks, bribes, and shakedowns is anyone’s guess. Basic bookkeeping is not prioritized. A Moscow friend, a foreigner who has worked as a senior manager for several Olympics, says, “I have never seen a budget in Sochi.’”
Putin’s Run for Gold,
The Future: Rio de Janeiro
Rio de Janeiro has both the 2014 World Cup and the 2016 Summer Olympic Games ahead. They will be the first South American city to host the Summer Games. As their projected spend passes the $30 billion mark, citizens are protesting as they suspect corruption as well as limited improvements to public services. Rio is also under the microscope after Sochi’s highly publicized rush to completion. But with funding coming from several sources and multiple levels of government involvement, the on time completion of the 2016 Olympic venues hangs precariously in the balance. And with such a push to be ready for 2016, one can only wonder if there’s time to consider the fate of all this work once the Olympics have passed. While projects like the cleanup of the sewage-filled Guanabara Bay will have lasting benefits, the future benefits of other projects like the addition of 80 new hotels and 31 apartment buildings will face the true test of time. Brazilians wait and watch anxiously to see if Rio can learn from past host cities and transition these new structures into useful and productive facilities once the Olympic banners are lowered.
Maracana Stadium, Rio de Janeiro. Maracana Stadium, built in 1950, will be upgraded for the 2014 World Cup before converting to the site of the opening and closing ceremonies two years later.