Garcetti hails “deal of a lifetime” as LA council approves 2028 Olympic contract

City council green lights LA's deal for the 2028 Olympic and Paralympic Games.

Garcetti hails “deal of a lifetime” as LA council approves 2028 Olympic contract

The Los Angeles city council has voted unanimously to authorise local authorities to sign a host city contract with the International Olympic Committee (IOC) for the 2028 Olympic and Paralympic Games.

Friday’s vote paves the way for LA 2028 bid committee to enter a tripartite agreement with the IOC that will see the city awarded the 2028 Games and Paris given the 2024 edition when Olympic decision-makers meet in Lima, Peru in September.

The council’s decision was hurried through in order to meet an IOC deadline, despite voters not knowing important details regarding LA’s new Games budget, and in the absence of an independent evaluation of the city’s spending plans.

The LA council approved LA 2024’s host city contract - a legally binding agreement between any Olympic host and the IOC that sets out financial guarantees associated with the Games - in January, but was required to vote for a second time after LA and Olympic officials negotiated a new contract for the 2028 edition.

IOC members voted in July to award both Games at the same time, prompting the start of negotiations over which of LA and Paris would go first.

LA’s bid detailed a US$5.3 billion privately funded budget for the 2024 Games, which was independently audited by accounting firm KPMG. While bid chiefs have indicated their Games plan for 2028 will be identical to their 'low-risk' 2024 proposal, new financing plans will not be finalised for several months and agreements with venue operators for the Games may not be concluded until 2019.

This week, the city of Los Angeles, LA 2028 and the United States Olympic Committee (USOC) agreed a memorandum of understanding that sets out the terms of their partnership for the 2028 Games.

The new agreement calls for the city to contribute US$270 million towards projected cost overruns of US$500 million, up from the US$250 million originally earmarked as a contingency for the 2024 Games. It also provides city representation on the LA 2028 board of directors, gives the city consent rights over significant venue changes from the 2024 plan and a greater say in LA 2028’s overall insurance and risk management strategy, and stipulates that a new independent review of the Games’ budget must be conducted in due course.

We negotiated the deal of a lifetime to bring the Games back to America, create a new Olympic legacy for the next generation.

Ahead of Friday’s vote, local opposition groups, including NoOlympicsLA, voiced concerns over the expedited vote as well as unknown risks to the taxpayer, while a report by LA’s city administrative officer and chief legislative analyst highlighted the “greater uncertainty” that would come with staging the Games in 11 rather than seven years time.

The report did, however, recommend that council members endorse the 2028 bid, saying that solutions could be found that would “mitigate the added risk".

Under the 2028 host city contract, LA stands to receive certain financial sweeteners including an increased IOC contribution of as much as US$2 billion, as well as advance payments totalling US$180-million to help cover the longer planning period.

Up to US$160 million of that sum will come in the form of an interest-free loan to support ‘youth and sport-oriented’ projects in the host city prior to the Games. The IOC has also waived its right to a 20 per cent cut of any surplus should the Games turn a profit, which could potentially run to hundreds of millions of dollars.

“We negotiated the deal of a lifetime to bring the Games back to America, create a new Olympic legacy for the next generation, and deliver access to sports and fitness programs to every community in Los Angeles,” said LA mayor Eric Garcetti, who has been a prominent figure in the city’s Olympic bid from the outset.

“Today’s vote by the city council is a resounding show of confidence in our fiscally responsible plan for 2028, and more evidence of Angelenos’ passion to return the Games to LA.”

LA city council president Herb Wesson added: “Today's vote isn’t just about 2028; it is about what will happen in between now and then: the progress we will make, the principles that will guide us and most importantly, the young people we will inspire.”

Both LA and Paris are set to stage their third editions of the Games - LA previously hosted the event in 1984 and 1932, while Paris staged it in 1900 and 1924