Thursday, August 27, 2009

Auditor Says Chicago 2016 Plan Solid and Reasonable

About a month ago Mayor Daley said that Chicago would sign the IOC host city contract if Chicago wins the right to host the 2016 Olympics (something he previously said he would not sign). This contract makes the host city completely liable for any cost overruns associated with the Olympics and many residents and in turn aldermen were rightfully upset with this new development. As a result the City Council requested that the 2016 plan be audited by an independent group called the Civic Federation. The purpose of this audit was to see if the bid team came up with an accurate and feasible plan

Well the audit is done and the group said:
...if Chicago 2016 sticks to its plan to buy additional insurance, the extra coverage would create "an effective safety net" to protect taxpayers in the event of problems such as cancellation of the Games, natural disasters or "loss of development financing."
This is a big win for the bid team as it's hard to imagine any alderman fighting the Olympic bid now. However, there are still some issue that the auditors warned about such as oversight from the aldermen:
The report also said it was critical for the City Council to use its oversight powers to monitor the city's Olympic plans. But that appears to miss the political reality of City Hall, where aldermen routinely have followed Daley's lead and rarely challenge his major plans.
And probably the riskiest component in our opinion is the plan for the Olympic Village since there continues to be a lot of volatility within the current real estate market:
Among the greatest risks in the Olympic plan is the impact that a changing real estate market could have on the financing of the billion dollar Olympic Village, according to the report. To address that risk, the Olympic committee's plan calls for multiple developers to spread the financial burden in addition to the proposed insurance policies.

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