Chicago's plan to remake the city looked good on paper, but it could have ended up
costing the city's taxpayers millions of dollars. (Photo from Chicago 2016 Bid Book)

Thousands of Chicagoans congregated in the windy streets last Friday
hoping to celebrate its selection to host the 2016 Summer Olympics,
only to be blown away when their city didn't even survive the first round of cuts.

I have just one message for the city of Chicago: "You can't always get what you want, but if you try sometimes well you just might find, you get what you need."

Maybe it's just my penchant for being a Scrooge, but I believe
Chicago should be thankful for not taking on the long-term burdens that
come with hosting the Olympic Games.

While all the anecdotes from Chicago 2016, the committee that ran
the campaign to get Chicago selected, told of how much hosting the
Games would help the city, provide jobs and rebuild a decaying portion of
the city, it failed to mention the dirty secret of the Olympics: The
massive public debt left on the citizens of an Olympic city after the
Games have blown through town.

History of Olympic-sized debt

Prior to 1984 the Olympics were a publicly funded event. But in
1976 the Games left Montreal wallowing in debt that would end up taking
it 30 years to pay off. The magnitude and cost of hosting the Olympics became a burden few cities wanted to take on.

In 1984 Peter Ueberroth led the first privately funded Olympic Games
in Los Angeles.  Using a model of corporate sponsorships to finance the
project, the 1984 Olympics became the most lucrative in history. 
Following L.A.'s lead, the Games once again became attractive to
potential hosts.

The positive externalities of hosting the Olympics and the massive
cost have always been heatedly discussed, but with the corporate model
in place the public responsibility to pay for the Games became low
enough for the positives to outweigh the negatives.

In 1996 the bombing in Atlanta's Olympic Village gave signs of how
much it could cost a city's image if a tragedy did occur during the
Olympics. With these fears in mind, heightened security at all the
Games following the September 11 attacks on the Untied States cost
hosting cities millions of dollars not accounted for in budget plans. 
The 2004 Olympics in Athens, for example, while applauded for its
on-field competition, left the city in tremendous debt they are still paying off.

"What has to be kept in mind is that often the highlighted benefits
are an incomplete picture of the economic situation," Simon Chadwick,
professor of sports business at Coventry University told the BBC.

"A country could spend $10bn on a Games, but only get back $8bn for its economy," he said.

The discrepancies come in part from underestimates by the committees
creating the bid packages. And when an Olympic project goes over budget,
it is the public that foots the bill.

When Sydney bid for the 2000 Games, its committee estimated a total
cost of more than $2.6 billion, of which just $317 million would be
borne by the public. By 1998, however, after the Games budget was
audited, the true cost of the Games was found to be more than $5.14
billion, of which the public would be paying more than $2 billion.

Planning picnics in the rain

My miser approach to looking at the Olympic celebration doesn't mean
there aren't positives that come from hosting the Games. The
festivities give the people of the city positive experiences that few
events can rival. The acute stimulus can help local businesses and
provide jobs in the immediate short-term. And in a macro-sense, the
Games could provide benefits to youths that outweigh the long-term
economic shortfall.

But a lot of things have to go right.

Allen Sanderson, a sports economist at the University of Chicago,
told the BBC: "If we do things well, there will be a positive impact.

"If we do things poorly, zero is an optimistic outcome," he said.

Sure you can buy lake front property, turn it into a billion dollar
Athletes' Village and plan on selling the housing after - Sydney sold about 80 percent of the 2,074 units by 2006. But aren't cities in
the U.S. still having trouble selling homes? What if the money the city
planned to get from those sales doesn't add up in the end? Also, the
economic prosperity of the Olympics counts on huge sponsorships from
major corporations. Last I checked, Ford and General Motors, two of the
biggest sponsors in sports, weren't doing so hot.

Who would have had to pick up the check if there were no sponsors left the pay the bills?

Mayor Richard M. Daley told the IOC that Chicago's bid came with a
"full government guarantee." In non-political speak he means, 'The
people of Chicago will pay the rest.'

You shouldn't be planning lavish parties in the midst of a hail storm with the people of your city as the safety net.

Oh, and what a lavish party it is. The Chicago 2016 committee
bragged during their presentation that they had 78,000 hotels set aside
for the Olympics, including 28,000 5-star hotels. Do
athletes' families and IOC officials need to spend their time in 5-star
hotels? Are 4-stars not good enough?

Part of the problem is that the IOC cares more about how big and
grand their bash is than what happens once they jet town for their next
luxurious party. (This was the same group that had to rewrite the rules to disallow their members from visiting bid cities -- a result of members' penchant
for corrupt actions like selling their votes for lavish
gifts.)

Truth be told, Chicago, you didn't need the Olympics. Sure it would
have been a reason to fix your transit system and clean up some of the
not so nice areas, but you don't need a gigantic bash to do those
things. I've never heard of someone throwing a 10-keg party so she can
patch up her sidewalk.

Putting taxpayer dollars at risk so you can fix up the city is backwards thinking at its finest.

The honest truth is that all the superlatives spoken about the Windy
City during the bid process were absolutely true. The diversity and
warmth of the people of Chicago is rare within big cities of the U.S.;
these are hard working people with blue-collar backgrounds and
white-collar personalities.

"Chicago is a place where we strive to celebrate what makes us
different just as we celebrate what we have in common," said President
Obama to the IOC. "It's a place where our unity is on colorful display
at so many festivals and parades, and especially sporting events, where
perfect strangers become fast friends just because they're wearing the
same jersey."

And it doesn't need the Olympics to make it any better.