DALLAS - Now that the Olympic flame has been extinguished in Sydney, Australia, Salt Lake City has only 486 days left to get the 2002 Winter Games up and running. Meanwhile, Salt Lake and other future host hopefuls scramble to find what it takes to put on "the best Games ever." The answer: money. A lot of it.
The money is expected to come from federal grants, Olympic sponsorship fees, and several billion dollars of bonds.
As part of its preparation for the Games, Salt Lake City is planning a bond referendum for November in the hope of winning approval to issue more bonds for its light-rail system. Olympic contenders Dallas and Houston are both touting bonds as the best way to pay for Olympic venues and related projects before they make bids for the 2012 Summer Games.
The International Olympic Committee requires cities that host the Games to have ample infrastructure in place -- streets, transit systems, parking, and water supplies, as well as venues for the events. The IOC has the power to take the Olympic Games away from a chosen host city if those terms aren't met, because the organization could lose billions in broadcast fees and ticket revenues during a shoddily staged Olympics.
The 2000 Summer Olympics will cost Sydney taxpayers about $1.05 billion (U.S.) over the next 10 years, to be paid via a special sales tax approved for New South Wales by Parliament. The sales tax will pay back bonds that helped build such venues as Stadium Australia and that bolstered the city's already strong transit system, said New South Wales Treasurer Michael Egan.
Salt Lake City, which was late to receive federal and corporate funding partly because of a 1998 scandal in which Olympic officials there were accused of bribing selection committee judges, is now rushing to get ready to host the Winter Games in early 2002.
The city has a nearly $1.5 billion Olympic budget for the Winter Games and is getting plenty of federal funds. In 1999, U.S. Transportation Secretary Ron Slater awarded the city $31 million in discretionary funding that covered part of the roadwork promised by the United States Olympic Committee to the IOC for the 2002 Winter Games. That sum was in addition to the state's usual transportation appropriation from Congress.
In addition to a federal grant of $48 million to be used as an Olympic Discretionary Fund, the federal government also gave Salt Lake $25 million for a bus system to carry spectators during the Games that will later become part of the city's transit system. All in all, by the end of 2001, Congress is expected to give Utah nearly $500 million of federal funds to help stage the Games, officials said.
Some of the onus for an Olympics-induced expansion of the city's light-rail system was lifted off Salt Lake residents when President Clinton signed a bill giving the city an additional $20 million toward the project. The remainder of the project's initial $120 million cost was paid for with bond proceeds, including a $65 million issue sold in September by Zions Bank. A Nov. 7 sales tax question would back additional bonds to extend the light-rail system to suburban areas, which many say will help expand the reach of the Games and alleviate parking problems.
"The federal light-rail money is a tremendous step forward for the project," said Mayor Deedee Corradini. "It shows taxpayers here that they don't have to foot the entire bill for this need. But without bonds, these Games would have been nearly impossible to finance."
Bonds have also backed improvements to University of Utah arenas slated to be used as venues, officials said.
"Overall, the Olympics have been used as an impetus to get this bond funding accomplished, and it's been an economic positive," said David Hitchcock, director at Standard & Poor's and chairman of the agency's Utah rating committee.
"The biggest area of bonding for the state has been in road improvements, which have been needed for some time, as well as some housing at the University of Utah," Hitchcock said.
"Utah still has a relatively low debt service ration, and debt maturities are rapid, so we feel these bonds are very secure."
Standard & Poor's assigns a AAA rating to both Utah and Salt Lake County.
But even with bond funding already in the plans, city officials want the Salt Lake Olympic Committee to pick up some of the slack, even if it means backing bonds with sponsorship funds. The SLOC is expected to pick up nearly $1 billion from corporate sponsors -- large companies anxious to affix their logo to the "Olympic brand."
Salt Lake faces some hefty service costs for the Olympics. Police estimate they would need an extra $10.7 million for officer overtime before and during the Games. Fire department officials say their extra costs -- including temporary fire stations at the Salt Palace-based Main Media Center and the University of Utah athlete village -- will top $3 million. Olympic-related costs at the Salt Lake International Airport, including multilingual signage and additional security, will total nearly $1.8 million.
Cities that want to host future Games are already preparing. Hoping to win early favor with selection committees, Dallas and Houston are working hard to pull together venues, transit systems, and airport improvements before each submits its bid to host the 2012 Summer Games.
Houston-Harris County Sports Authority has planned a Nov. 7 referendum to fund a downtown basketball arena that officials say would likely be included as a venue in its bid. Harris County-Houston Metropolitan Transit Authority officials are working on financing options to get a light-rail starter system operating in time for the Games, should the city win its bid. The city also has a $699 million airport improvement bond sale slated for later this month, a project that officials say should boost Houston's Olympic hopes.
Another referendum slated for November could give the city, if approved, the ability to use bonds to put aside a $100 million insurance fund backed by taxes on Olympic goods should the city host the Games. The IOC has mandated contingency funds since Montreal suffered a $1 billion deficit after hosting the 1976 Summer Games.
Dallas voters in mid-August approved a $2.9 billion light-rail funding plan. Although that project has been planned for several years, Dallas Olympic proponents say that the passage of the bond program will be a positive factor when the city posts its bid for the 2012 Games.
A possible third airport in the Dallas Metroplex is proposed in Denton County, and if that idea is approved, it could alleviate some of the Dallas-Fort Worth International Airport's heavy traffic during the Olympics, should Dallas win the hosting competition.
