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As Money Machine, Games Didn't Deliver

A year before Olympics, officials promised a $10 billion windfall. No one's saying that now.

By Bob Mackin 15 Feb 2011 | TheTyee.ca

Bob Mackin covered the multi-year story of the 2010 Olympics for 24 Hours Vancouver, where he is a reporter, and contributed stories on the Games as well to The Tyee.

February 2003. A tale of two Campbells. One on the right, the other on the left. No relation. Ex-cop and coroner Larry is the rookie mayor of Vancouver. The other, Gordon, is an ex-real estate developer, a former three-term mayor of Vancouver.

Larry has won an election with a platform that included a plebiscite on the Olympic bid boosted by Gordon. Larry doesn't cancel it, but agrees to campaign for Gordon's vision. Larry promotes the Games as a vehicle for social change. Gordon says they'll bring jobs and prosperity.

On Feb. 22, 2003, 64 per cent of voters sign on, backing the bid. The International Olympic Committee is impressed. Vancouver beats PyeongChang, South Korea by a scant three votes the day after Canada Day.

Today, Larry's a senator who lives at the Olympic Village, the $1.1 billion complex pushed into receivership under watch of current mayor Gregor Robertson.

Gordon will be replaced before the end of this month, and wave goodbye with red mittens one last time.

Back in 2003, buoyed by the euphoria of winning the IOC vote in Prague, Premier Gordon Campbell proclaimed: "It's not going to cost. At the end of the day, it's going to generate revenues into the province."

Costs? Revenues? The jury is still out.

Shifting numbers, some still hidden

The Feb. 17, 2009 budget claimed the economic impact would be $10 billion. By Oct. 28, 2009, Small Business Minister Iain Black told the legislature that the Games would be "a $4 billion revenue-generating spectacular."

Fast forward to Dec. 17, 2010, long after the last athlete went home and all the banners were gone. PricewaterhouseCoopers -- in a study paid for and scheduled by Ottawa and Victoria -- downgraded its estimate, saying only $2.3 billion was generated over seven years. This, in a province where the Gross Domestic Product was worth almost $198 billion last year.

"There are a lot of positive things, but I don't know if it will ever be measured in dollars," said Intrawest CEO Bill Jensen at a July 2009 Canadian Ski Council conference in Whistler. Jensen's Whistler Mountain hosted skiing and Blackcomb sliding in venues paid for with tax dollars.

VANOC eventually compensated the resort for $32.1 million. Intrawest thought it deserved more. VANOC CEO John Furlong scored a seat on the board of directors when the mountains were spun off and turned into a public company. Intrawest, which holds a 24 per cent stake, decided in January to vacate Vancouver in favour of Denver by year-end.

Denver, ironically, is a city that won the 1976 Games, but voters returned the rings to the IOC when they realized how much it would cost.

PricewaterhouseCoopers also was paid to gauge Metro Vancouver Commerce, an ad hoc combine of various municipalities led by Vancouver, Surrey and Richmond. They spent $700,000 of their own tax money and received $800,000 from the federal government to buy Olympic tickets from VANOC and wine and dine 100 visiting businesspeople. The list of invitees remains secret. So do details of precisely who invested what because of the Games.

Metro Vancouver Commerce claimed on Feb. 4 that it attracted $168.8 million in direct investment. That figure relied heavily on special effects-heavy Hollywood North-lensed blockbusters Thor, Tron:Legacy and Mission: Impossible 4. Only $22.4 million of the alleged windfall is actually for recurring expenses, like office rents and salaries.

The elephant in the room, of course, is the Olympic Village. The False Creek luxury condominiums were pushed into receivership last November over developer Millennium's $740 million debt. MVC partner Richmond suffered the loss of Microsoft last fall when it quietly closed its development centre. Politicians raced to the same facility for photo opportunities when it opened during the good times of 2007.

A sober warning

While studies ordered by federal, provincial and local governments predicted big financial gains, there were other solid data projecting a much different story.

Economists at the College of the Holy Cross in Worcester, Massachusetts, who specialize in studying mega-events, have taken a long, hard look at the Salt Lake 2002 Winter Olympics. One of those economists, Victor Matheson, warned governments in a 2006 report to "view with caution any economic impact estimates."

"While most sports boosters claim that mega-events provide host cites with large economic returns, these same boosters present these figures as justification for receiving substantial public subsidies for hosting the games," Matheson wrote. "The vast majority of independent academic studies of mega-events show the benefits to be a fraction of those claimed by event organizers."

A May 2010 Holy Cross report found Salt Lake 2002 "had a modest short-run impact on employment and no significant impact on total employment in the long run." That followed a Nov. 2008 report that found hotels and restaurants gained $70.6 million, but general merchandise sales fell $167.4 million. This happened, they say, because the Games caused local residents to alter consumption patterns and local residents and regular visitors were displaced by those attending the event.

PricewaterhouseCoopers spokesman Jim Nelson said his firm "has not done any in-depth analysis on the potential aversion effect for past reports, however we are looking at it now as we develop the full-year 2010 report" which is expected in mid-2011.

They could start by knocking on doors in Marpole, South Granville and Denman Street, areas that reported drops in business during the Olympics and demanded emergency meetings with Vancouver city hall.

Transportation and security tie-ups were a reason. Some people rented their houses and left town. Others stayed home and watched the Games on TV or went to the Games. Many changed their work schedules and their regular shopping routines. Downtown hotels and restaurants were jammed, but many suburbanites with spare rooms hoping for a windfall from deep-pocketed Games visitors never cashed-in. Tourism had a golden spike in February, but Tourism Vancouver overnight stay figures show 2010 was below recent averages.

The HST connection

Whether they wanted the Games or not, the public was slapped with a slew of new or increased taxes and fees that were announced or enacted before the Games. Transit tickets and passes, gas taxes, parking meter rates and off-street parking taxes all rose. Community arts and sports groups lost provincial grants while the province diverted funds to its Robson Square celebration site and tourism ad campaign. All in the wake of the Great Recession. The unpopular Harmonized Sales Tax might be seen as Games fallout, given that Premier Campbell has explained his government moved quickly to impose the tax because the Federal government promised, in return, a $1.6 billion one-time infusion of cash to help close a projected B.C. budget deficit accrued in the year of the Olympics.

Back in 2003, Mayor Larry Campbell said citizens didn't want to give a blank cheque to a future organizing committee. They wanted guaranteed consultation and participation and community-based oversight "that is independent and reports directly to the community."

"There's a chance here, if we do it right, that we can use the 2010 Games to help people move out of poverty, so they will no longer have to worry about governments that aren't too concerned about their future," said his lieutenant, then-councilor Jim Green.

The Vancouver Bid Corporation came up with the Inner-City Inclusivity Statement, a 37-point sheet of promises, meant to sway local support. Affordable tickets. Accessible venues. The poor wouldn't be evicted and civil liberties would be respected. Consultation. Accountability. Sustainability. The social policy framework was an Olympic first. It even set-up a committee that recommended authorities build 3,200 new social housing units to solve homelessness.

'Profound disjuncture'

University of B.C. professor Jim Frankish's Two Solitudes: The 2010 Vancouver Olympics and Inner City Inclusivity Commitments found ICI was largely a controlled and limited corporate social responsibility image campaign.

"The sports, business, tourism, patriotism and hedonism coalitions dominate discussions/decision-making," the report said. "In 2001, our mayor conducted a poll. Residents said that ending homelessness and addressing drug abuse/mental health issues were the top preferred outcomes of the Games. Clearly, there is profound disjuncture between these preferences, the work of VANOC and its partners and the largely pro-Games behaviour(s) of residents during the Games."

The UBC team's polling of Vancouver inner-city residents found one-third of respondents said they could not afford tickets; 52 per cent thought information was poorly provided; 17 per cent of those who rented housing said landlords increased rent to gain from the Games, and 13 per cent said they learned they were evicted due to the Games; one-tenth participated in a protest.

Though VANOC claimed in a self-report card that it upheld its side of the bargain, no independent watchdog was ever funded, recognized or respected. The IOC itself never followed-up on the ICI.

"They're commitments. You commit yourself like in religion," Gilbert Felli, the executive director of Olympic Games, said on a March 2009 Vancouver checkup. "It's intangible so it's not measurable.

"At the end -- for the IOC -- we cannot be involved with social details in a city because it's not our task. Our task is to look at sport."

'The real legacy'

Vancouver shed its "no fun city" image when most citizens realized they could party or protest responsibly in public. B.C. Civil Liberties Association executive director David Eby said people were able to get their message out and Vancouver Police discovered "they can be more hands-off with demonstrations and end up with a more positive result."

Eby said it's shameful the hands-off approach didn't carry over to Toronto for June's G20 summit, which was marred by a riot and allegations of mass-police brutality. He also remains critical of the RCMP for spying on anti-Olympic activists at their homes and workplaces.

Hosting the Games was more expensive than politicians ever admitted, and the benefits are debatable. But NPA Councilor Suzanne Anton said it was essentially a brand-building exercise that brought citizens together.

"Vancouver has demonstrated it can do events, it can get volunteers, and host conventions. That's the real legacy," Anton said. "The financial is really a wash."

Sport BC president Tim Gayda said sport enrollment numbers will be available in March, but increases are expected in several areas.

"Not only [more] kids wanting to do it, corporations wanting to be part of it, people wanting to volunteer," Gayda said. "People seeing it as an opportunity to improve community and health."

The glow of the Games did not transform the Downtown Eastside. Canada's poorest postal code remains a haven for homeless, addicts and the mentally ill.

"The neighbourhood looks just like it did before the Olympics, the human misery," Eby said.

'Like watching an aging rock star'

Games opponent Chris Shaw, who authored Five Ring Circus: Myths and Realities of the Olympic Games in 2008, said celebrations marking the first anniversary of the Games are indicative of the negative impacts.

"The best we can do a year later is not move on and do something else, but recapture the moment and look backwards," Shaw said. "Looking backwards comes with that sense that we had that moment of glory, like watching an aging rock star. It was this one-shot deal and people are so desperate to feel world class and are locked into that moment in time. We were sold 24 dollars worth of junk jewelry and gave up an awful lot to get it."

University of British Columbia professor Rob VanWynsberghe, head of the Olympic Games Impact study project, said social impacts were felt before the Games, environmental fallout happened before and during them, and economic impacts are occurring now. The legacies, he said, will take much more than just one year to define.

"It's really early days," VanWynsberghe said. "It just takes time."  [Tyee]

Read more: 2010 Olympics

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