The Olympics, Urban Revitalization, and Economic Development
This post by Fred Steinmann
On Sunday, February 28, the 21st Winter Olympic Games, held in Vancouver, British Columbia, Canada, came to an end during a spectacular closing ceremony viewed by millions across the world and tens of thousands in attendance. For many, the Olympics are a celebration of sport. For others, the Olympics represent the very best possibilities of humanity. And for some others, the Olympics are viewed as a way to radically transform a community seemingly overnight. In a February 2010 article published in Planning: the Magazine of the American Planning Association, James Krohe Jr. writes, “The International Olympic Committees likes to portray the Games in terms of sporting ideals. Since the 1960’s or so, entrepreneurial mayors tend to see them in terms of development deals.”
In the weeks leading up to the Vancouver 2010 Winter Olympics and the days since the closing ceremony, there has been a lot of talk and speculation about what the Winter Olympics could do for the wider Reno-Tahoe region in-terms of successfully revitalizing a depressed tourism industry and encouraging significant economic development in both the short and long-term. Many have suggested that the return of the Winter Olympics to Squaw Valley in the near future could help revitalize tourism counts, help souvenir shops, and help pack area bars and nightclubs. But as James Krohe Jr. writes, “Unfortunately, hosting the Games gets no medals as an urban development strategy. Host efforts tend to be over promised and underfunded, and seldom achieve the goals that local organizers set out.”
I understand the “nostalgia” of having the Winter Olympics return to the Reno-Tahoe region but it’s important to keep in mind that it would be just that – nostalgic. It is highly unlikely that the Winter Olympics would lead to a renaissance for tourism and economic activity throughout the region. In fact, it could very well leave the local communities involved saddled with billions (that’s right – billions) of dollars of debt to build new facilities and infrastructure that will never be used once the Olympics leave town. Keep in mind that Squaw Valley already hosted the Winter Olympics in 1960. Did those Olympics lead to a hundred years of prosperity and uninterrupted growth? No. In fact, only 30 years later, during the spread of Indian gaming in states like California, Oregon, Washington, New Mexico and Arizona, the wider Reno-Tahoe region has experienced considerable decline in its annual visitor counts. And in-terms of general economic growth, northern Nevada has continued to trail the nation in several important economic categories.
The Winter Olympics is not a solution to current short-term economic problems nor is it a long-term plan for long-term economic prosperity. Urban revitalization and economic development do not come out of a bottle – it happens incrementally and over time. Successfully urban revitalization and economic development occurs by building a mid to high skill level workforce through education and workforce development programs. Communities committed to long-term urban revitalization and economic development are also committed to developing home-grown firms and businesses through a comprehensive small business and entrepreneurial development strategy that generates mid to high paying jobs that positively contribute to a community’s overall quality of life. Authors and experts who have studied the economic impacts of hosting the Olympics such as John R. Gold and Margret M. Gold (Olympic Cities: City Agendas, Planning and the World’s Games 1896-2012, 2007), Holger Preuss (The Economics of Staging the Olympics: A Comparison of the Games 1972-2008, 2006), and Christopher Shaw (The Five Ring Circus: Myths and Realities of the Olympic Games, 2008) have almost universally concluded that hosting the Olympics is not a substitute for proper urban planning and economic development efforts.
In many cases, the initial economic impact of hosting the Olympics is far less than what organizers had hoped for and the hosting local communities tend to take on huge amounts of debt for facilities and infrastructure that will quickly deteriorate once the Olympics have passed. According to Krohe Jr., the failed Chicago bid for the 2016 Summer Olympic Games asserted that the Summer Olympics would pump approximately $13.7 billion into the Chicago-metropolitan economy. But an independent analysis conducted by Anderson Economic Group projected that the 2016 Summer Olympic Games would only generate about $4.4 billion in overall economic activity with the majority of it coming from additional tourism and infrastructure spending in Chicago and Cook County.
In Sydney Australia, the Australian national government spent nearly $1.6 billion on infrastructure designed to support the 2000 Summer Olympics in anticipation of a tourism boom. Turns out, according to Krohe Jr., Sydney’s gross domestic product, as a direct result of the Summer Olympics, rose only by about one percent. In fact, tourism throughout New South Wales, of which the City of Sydney is the provincial capital, has increased at a rate less than the rest of the nation since the 2000 Summer Olympics. In Athens Greece, the City of Athens spends nearly $100 million a year in just upkeep of the venues used during the 2004 Summer Games. And for Beijing? Although official estimates are hard to come by, it is estimated that the Chinese national government spent an estimated $40 billion to host the 2008 Summer Olympics. In all of 2009, the “Bird’s Nest” stadium, which cost an estimated $500 million to build, hosted just one event – an opera. These three cities, along with Barcelona Spain and Montreal Canada, are still paying off tremendous amounts of debt that have hamstrung, not helped, their local and regional economies.
The recent Vancouver 2010 Winter Olympics is a unique case in that the City of Vancouver, its partnering local jurisdictions, the province of British Columbia, and the Canadian Federal Government, really didn’t shell out a lot for new facilities. Take for example the following venues. BC Place was the home of opening/closing ceremonies. It’s also the ongoing home of the CFL BC Lions football team. Canada Hockey Place was the home of ice hockey – it has been and will continue to be the home of the NHL Vancouver Canucks hockey team. UBC Thunderbird Arena was home to women’s ice hockey. It has been and will continue to be the primary hockey arena for the University of British Columbia. Vancouver Olympic Center was home to men’s and women’s curling. Although it is a new facility, it was built with the intention of replacing an aged and deteriorating community center. Some have suggested that the Reno Events Center could be a good venue for Olympic curling. Problem with using the Reno Events Center is that it will cost hundreds of thousands of dollars to retrofit the facility in order for proper chiller equipment and flooding equipment to be installed. Also, the Reno Events Center could be nearly 20 years old by the time Reno-Tahoe hosts a Winter Olympics. Who knows what the costs of renovation to accommodate the Olympics will be then. In the end, neither Reno nor Lake Tahoe or any of the surrounding areas have the needed facilities already in place to host a Winter Olympics. It would take billions just to build the facilities – not to mention the infrastructure needed to move millions of people around for a few weeks.
I had the pleasure of attending the Vancouver Winter Olympics for a few days. I also have attended the Salt Lake Winter Olympics in 2002 and the Calgary Winter Olympics in 1988. I absolutely enjoyed all three Olympics and I look forward to attending more in the future. But as an economic development professional, I’m not at all convinced that the Winter Olympics is either an urban revitalization panacea or urban economic development instant cure for our region. The Olympics is a celebration of sport. It is also a celebration of local and regional culture and pride. The cities that have done well with the Olympics in the past – Vancouver, Barcelona, Los Angeles – had a long-term vision for their communities that did not necessarily include hosting either the Winter or Summer Olympics. It’s okay to go after the Olympics for nostalgia purposes as long as we keep in mind that the Olympics should never become a substitute for true urban revitalization and economic development policies, programs, and practices.
