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MARK AUSTIN THOMAS: Yesterday the British parliament got some bad news: The costs for the Olympic games London is hosting in 2012 will be three times the original estimate. This news comes as L.A. and Chicago are pushing to host the games in 2016. Both cities insist they can make money hosting the Olympics, but Marketplace’s Bob Moon says one of them may face less of a financial risk.
BOB MOON: Chicago’s promotional video talks of a grand Olympic village along the shore of Lake Michigan.
[ VIDEO: “‘Make no small plans’ has long been our city’s unofficial motto. . .” ]
Just this week, after long promising no public funds would be needed, Chicago’s mayor persuaded the city council to put up a more than $500 million good faith “guarantee”— while still insisting there’s “zero chance” tax dollars will be needed. Organizers vow there’s plenty of private support lined up.
But the head of L.A.’s Olympic bid, David Simon, says his city still has something Chicago doesn’t:
DAVID SIMON: We’re blessed with existing facilities for almost everything the Olympics need.
Indeed, Chicago organizers reportedly have explained that L.A. isn’t being required to post the same public guarantee because of its existing facilities.
But when it comes to soaring costs like those just revealed in London, Simon argues L.A. has a lot less risk.
SIMON: With a very limited construction budget, you don’t have the kind of cost overruns that you do when you need to build and Olympic village or a main stadium and those kinds of major facilities.
U.S. Olympic officials are set to decide a month from now which city gets to go forward with an Olympic bid.
In Los Angeles, I’m Bob Moon for Marketplace.
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