Mayor Richard M. Daley said today he believes that, in addition to the legacy of engaging future generations of young people in sport, the benefits to Chicago’s economy of hosting the 2016 Olympic and Paralympic Games will be great and the risk to taxpayers low.
“Simply put, I believe that at a low risk to taxpayers, the Olympic Games will be a huge boost to our economy, raising it to a new level. The Games will help us recover sooner from the recession that still grips our nation and enable us to better compete in the global economy,” Daley said in a news conference held at 250 S. Wacker Drive.
“Hundreds of thousands of jobs will be created for hardworking Chicagoans as we lead up to the Games and more jobs will be created after the Olympics have ended and our city is even more clearly positioned globally as a great place to visit and conduct business,” he said.
The Games will also create a legacy that expands opportunities in urban sports for young people in Chicago and the United States for generations to come, he said.
Daley held the news conference to give details of his appearance with representatives of Chicago 2016 last week in Lausanne, Switzerland, before a meeting of the International Olympic Committee.
“Last week when asked in a meeting with IOC members about whether Chicago would sign an unlimited guarantee, because I believed and continue to believe that the Olympics would be a low risk to taxpayers but a great benefit to our economy, I agreed.
But, perhaps I spoke too quickly,” Daley said.
“I should have more fully explained what my concerns were and that we would purchase additional insurance to protect taxpayers before we sign the agreement. I should have more fully expressed my frustration at that moment on behalf of Chicago’s taxpayers.
“And, I should have made it clear, as I did soon after, that we would need to hear from members of our City Council and the people of Chicago on this issue,” he said.
He said that if Chicago must provide an unlimited guarantee, he can support doing so only if additional insurance is purchased by Chicago 2016 to cover tax dollars in event the worst should happen and there is a deficit.
Daley said that although Chicago 2016 has already conducted surveys and held many meetings with people from all parts of Chicago, including members of the City Council, better communication is needed.
He made clear that no agreement — including an unlimited guarantee to obligate Chicago’s taxpayers — was signed in Switzerland.
“Up until a few weeks ago we believed that our proposal was fine with to the International Olympic Committee. Personally, I continue to believe that an unlimited guarantee is not necessary, but unfortunately, the International Olympic Committee doesn’t agree with me,” Daley said.
“I want to restate that I don’t like being put in the position of supporting an unlimited guarantee — even with insurance to cover it — but that’s what the IOC now demands if we are to remain a contender for the Games and all the new jobs, greater revenue and neighborhood benefits that would come with it,” he said.
Daley said it’s important for people to understand that in the worst case, should the Olympics fail to make a profit — something Chicago 2016 deeply believes won’t happen – the Committee has put or will put in place over $2.2 billion in various “safety nets” to protect taxpayers.
According to the Chicago 2016 Committee, these are:
- A projected surplus/contingency of $450 million in the budget for the Games
- $1 billion in event risk insurance
- $500 million guarantee from City
- $250 million from State of Illinois
In addition, 2016 will acquire $375 million in insurance against cancellation of the Games.
Daley pointed out that not a single summer Olympics Games since 1972 has lost money, and American host cities have returned an average operating surplus of $748 million.
The Mayor said there is time to work through a final decision before October 2, the date on which the International Olympic Committee will make its final decision on which city will host the Olympic Games.
“At my request, briefings on all these issues with members of the City Council have already been conducted. We need to hear from the Council. Members need to weigh in on this important decision, including bringing it to a vote, if that’s what they want to do,” Daley said.
“I have asked Pat Ryan to testify before the City Council personally and he has agreed. Again, this is an important issue that needs public discussion,” he added.
Daley summarized the benefits the Games would bring and reasons why they present low financial risk:
- The Games will create 315,000 new job years —the equivalent of one full year of work for 315,000 people.
- Further, 2016 expects the Games to generate over $20 billion in new economic activity, including over $1.5 billion in business taxes across the state.
- New neighborhood investments will be made, leaving a legacy of an improved quality of life, including an aquatics center and amphitheater for sporting and cultural events, a multi-sport facility and 50-meter recreational and competition swimming pool, a new hockey field, new tennis courts and new recreational space at Northerly Island.
- The Olympic Village, which will be developed on the site of the closed Michael Reese Hospital, will become a mixed-income housing and retail community for Chicago residents. Billions of people around the world will be exposed to Chicago and its place as an international city and as a destination for tourism and business.
- Because the 2016 plan focuses on temporary venues and requires little new, permanent construction, the budget for the Games is lower than that of other cities. Chicago does not have to build massive capital projects, as have other previous host cities.
- Chicago 2016 projects lower revenue from ticket sales than were received by Sydney in 2000 and conservative funding from television rights — all of which help make their budget reasonable and responsible. Daley said the Chicago 2016 plan reflects the overall objectives he has set from the beginning of the City’s efforts to host the Games.
- Taking Chicago’s economy to a new level by creating tens of thousands of jobs and generating much needed new revenue.
- No burden to Chicago’s taxpayers from the cost of the Olympics. “I would not pursue the Games if I believed there would be a deficit and if I believed taxpayers weren’t protected,” he said.
- No diversion of tax dollars from the many challenges facing the city — from fighting crime to investing in neighborhood improvements.
- A full discussion throughout the city and in the City Council about the Olympics, including both people’s concerns and hopes.
“Those who are involved in putting together the finances for the Games have consistently assured me and others that the risk to taxpayers of signing this agreement is small, while the jobs, revenue and other economic benefits from the Games would be great, should we get them. And, so will the legacy to our children and our neighborhoods,” Daley said.
“I would never take members of the City Council, taxpayers or the people of Chicago for granted or do anything that would harm them or our city. I want only what’s best for Chicago,” he said.
Mayor’s Press Office, 312-744-3334