The Daley administration and the Chicago's Olympic bid committee went into damage control mode last week after the mayor flip-flopped and signaled to the International Olympic Committee that Chicago taxpayers will cover costs overrun associated with the 2016 Summer Games. In response to the blowback from aldermen and editorial writers, Daley denied that taxpayers will ultimately be liable for anything above the $500 million guarantee already approved by the City Council in 2007. Meanwhile, Chicago 2016 sports and operations director Doug Arnot tried to diffuse the situation by simply dismissing the possibility of cost overruns on Olympic-related projects, telling the Sun-Times:
"The places where the games have gone over budget . . . has been in the mega-construction projects associated with the games. London is rebuilding all of the East End" of the city, Arnot said.
"We don't have mega-construction projects associated with this plan," he said.
It's somewhat difficult to define a "mega-construction project" in the context of the Olympics, particularly when foreign currencies are involved. So rather than cite the examples of London's 2012 Olympic Stadium (the cost of which has doubled from £282 million to £547 million) or Vancouver's 2010 Olympic Village (where "some citizens feel duped" by the growing pricetag), let's look instead at the three most recent major capital projects taken on by Daley. We think his adminstration's track record speaks for itself:
O'Hare Expansion: The $15 billion project cost -- which came in nearly five times higher than the initial estimate of $3.6 billion -- drew further scrutiny when it political insider Chris Kelly was indicted for allegedly paying off a consultant in exchange for $8.5 million worth of inflated contracts. Last year, American and United airlines backed out of helping to pay for the expansion, explaining to the Federal Aviation Administration that the city's plans were “ill-conceived," adding: “Unfortunately, the city did not accept the more modest and financially prudent approach.”
Block 37 Superstation: After spending $320 million on a plan initally estimated to cost $213 million, taxpayers continue to dump money into this stalled project in the Loop, which aimed to create a central hub for express trains to O'Hare and Midway airports. As Crain's reported last summer, a dearth of private investment (and a $1.5 billion overall shortfall) forced the CTA to shelve the plans. Despite being touted as a public/private partnership, taxpayers covered a $130 million shortfall last year alone. Equally troubling: When the city asked for an additional $20 million to cover cost overruns last June, officials refused to even answer questions about the problems plaguing the site.
Millennium Park: Proposed as a $150 million project with no public financing, Millennium Park came in $350 million over budget and was completed four years behind schedule. The now-defunct Neighborhood Capital Budget Group highlighted the bill of goods sold to the public on a project fraught with "poor planning, design problems and cronyism [that] led to skyrocketing costs." In the end, taxpayers paid $270 million for the park. Private donors came up with less than half.
The Community Media Workshop's Curtis Black has more.
Comments
Valerie F. Leonard (not verified) on Mon, 06/22/2009 - 10:08
Thanks for yet another great article, Angela. I think you make an excellent case that the Olympic budget will probably be blasted to smithereens. The international examples are relevant, regardless of how people try to downplay them. They give us a sense of the magnitude of the cost overruns, even after the IOC is involved. Clearly, the IOC could do a better job of encouraging host cities to give more accurate bids and keeping the costs in line. In fact, they need to step up their own financial analysis and due diligence.
Your local examples are even more telling, Inflated bids and cost overruns seem to be an acceptable cost of doing business in the Chicago culture. While I think that some workers will benefit from the Olympics, the more I read, the more it becomes apparent that this will be another taxpayer funded bonanza for the rich and politically influential. Our elected officials, in many instances, have turned a deaf ear to their constituency in favor of a few pieces of silver that will soon turn to dross. It is my sincere hope and prayer that they would re-visit their job descriptions and exercise proper due diligence to protect the interests of the public.
Anonymous (not verified) on Tue, 06/23/2009 - 09:37
I have watched how the City of Chicago does business, and I have found that those in power in this town have no consideration for the citizens who pay taxes, and those who work for them. This city government over spends on the City of Chicago's budget every year, and we, the citizens of this town, must pay out of pocket.
Fifty aldermen sit in high, back leather chairs every week, Wednesday at Noon, and silently agree with whatever is put forth by the City of Chicago's budget office. They are all dressed up and go no where.
Most Chicagoans believe that they are unable to change the results in this city's government. So, they think, what is the use of of getting up early on a cold, snowy, or rainy day, standing in a slow moving line to vote for a candidate who was not chosen by them. Someone selected by the only active political party in this city. In an election the opposing candidate (if picked) was purposely chosen as a dummy candidate that will allow the "smart" politician to win.
All it would take to stop this pattern of bad voting behavior is for the citizens in this town to protest by going to the polls and voting out the irresponsible, wild spending candidates. Change your mind set citizens of Chicago by going to the polls and voting for the candidate that you know will do a good job. Even if you think your candidate cannot win. Vote for him or her anyway. Stop the bad behavior of politicians who will not listen and act irresponsibly with your money.
Politicians are not dumb. If they note a change in the voting behavior of the voters, they will either change or be booted out of office,
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