Report: Boston Olympics could bring in billions
A new study says Boston Olympics in 2024 could bring in billions of dollars into the Massachusetts economy and create jobs, but would require careful planning and cost control.
“The Olympics could be a net economic positive, but that success will depend upon smart budgeting and effective planning to avoid some of the huge cost overruns that have bedeviled some Olympics host cities in the past,” Paul S. Grogan, president and CEO of The Boston Foundation, said of the study, prepared for the foundation by the UMass Donahue Institute.
The report predicts the creation of 4,100 construction jobs annually over a six-year span, adding $4 billion to the state’s economy.
And the economy would continue to benefit during the Olympics, according to the report, with $5 billion in operational spending for the Olympics. Tourism would add another $300 million in spending and support nearly 4,300 jobs in 2024, the report said.
But while the report touts benefits, it also advises caution. Among the major concerns are those of cost overruns. Most modern Olympic games have had cost overruns, according to the study, with London recently recording a 101 percent cost overrun for the 2012 Summer Olympics. The average cost overrun for summer games was 252 percent, the report said. While Boston 2024, the group leading the effort, plans to purchase insurance to cover overruns, this is still a “novel concept,” according to the report, and “agreements with the (International Olympic Committee) typically expose the host city to financial obligations related to cost overruns and budget shortfalls.”
Public transportation and infrastructure continues to be a challenge in Boston, according to the report, raising concerns over whether public funds will disproportionately be funneled into Boston projects leading up to the Olympics and if those projects will be more extensive because of the games.
“It is clear that Olympic construction and spending activity will likely have a significant economic impact on the state, especially as it draws on otherwise untapped sources of funding from the private sector or external sources,” the report’s authors concluded. “That said, substantive questions still remain regarding the bid and the fiscal realities of the budget forecast.”
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