Rings and a Prayer
Gentlemen, start your bulldozers. The Olympics might not be headed to New York until 2012might not arrive here at all, depending on which city the International Olympic Committee picks from among a dozen or more candidates in 2005and even then would be here and gone faster than a single run of Shakespeare in the Park, but the Olympics industry has focused its attentions on us full force. At City Hall last Wednesday, amid the rows of former Olympians and awkward tributes to the New York spirit ("If there's any place that's demonstrated the power of hope," intoned U.S. Olympic Committee CEO Lloyd Ward, "New Yorkans have done that"), it was easy to forget that the Olympics are not just about sports, but also construction. Lots of construction.
In New York, the impact would be felt from Staten Island, where equestrian and mountain biking courses would be carved out of the Greenbelt, to Flushing Meadows-Corona Park, where residents are already blasting a plan to streamline lakes for Olympic rowing. But by far the largest change to the cityscape would be on Manhattan's West Side, where the Olympic plan would utterly reshape the landscape, with an extended 7 train leading to a football stadium, expanded Javits Center, acres of new commercial development, and possibly a replacement for Madison Square Garden. (Last week, the mayor ominously referred to the existing Garden as not "economically viable.") Even before New York got the Olympic nod, Dan Doctoroffthe former NYC2012 president, current deputy mayor, and owner of what the Times called a "tiny, passive interest" in property on the West Sidewas indicating that the city would pursue the West Side plan immediately, regardless of who gets the 2012 Games.
While the city says only 137 households would be directly displaced by the new development, local activists say that number misses the point. "They are playing a shell game, only counting the blocks they want," says John Fisher of the Clinton Special District Coalition. "When my landlord wants to start throwing out people because a building across the street just came on line, or when a Starbucks replaces a deli because the price per square foot has gone up, that's secondary displacement."
Helen Lenskyj, author of The Best Olympics Ever?, a critique of the social impacts of the 2000 Sydney Games, says two of the main Olympic legacies are gentrification, as landlords jack up rents in anticipation of the flood of media and support workers who descend in advance of the games, and sanitization, which could begin as early as the arrival of the IOC inspection team in 2005. "You don't want these IOC bigwigs to see drug addicts and beggars in the streets," she says. In Atlanta, about 9000 poor and homeless residents were arrested during the run-up to the 1996 Olympics, according to Atlanta Taskforce for the Homeless director Anita Beaty. "Developers use the Olympics as the biggest development project they've ever had an opportunity to engage in," Beaty says. "Then it's a steamroller, and it keeps rolling."
Then there's the money. For a city with a looming budget deficit, this may seem a bad time to embark on a $5 billion construction project, but Doctoroff insists there's no reason for alarm: The entire public share of the construction budget, he says, will be paid off by the magic of tax-increment financing, or TIF. Under the TIF plan drawn up by Bear Stearns in 2001 (pre-9-11, it's worth noting), property tax revenues for a huge swath of the West Side, running from 28th Street to 41st Street, Ninth Avenue to the Hudson River, would be frozen at current levels. Then, any additional tax moneythe "tax increment"resulting from new development would be used to pay off the construction bonds for the subway extension and the city's share of the stadium. According to Doctoroff, while debt service would be huge, the tax increment would be even larger, and easily pay its own way.
What, though, if the 20 million square feet of hoped-for commercial development never comes to pass? What if property values in the TIF district don't rise by three percent a year for 30 years as projectedor even fall? And what if any new office buildings only cannibalize development from other areas of the city, say, Lower Manhattan? The Bear Stearns report doesn't say, and Doctoroff only repeats assurances that "we don't have that concern." Would developers guarantee minimum tax payments, regardless of whether buildings get built? Doctoroff: "That's something we'd have to work out." New York's Olympic plan, it seems, is a $5 billion leap of faith.
Unbelievers aren't hard to find. "I think it's questionable whether in the next three or four years, given the market, those buildings will occur," says Jeff Zupan of the Regional Plan Association. "And if they do, if the city makes it attractive for companies to relocate there, are they affecting lower Manhattan adversely? That's a very serious problem."
TIF experts also question whether a West Side TIF meets the but-for requirementthe notion that no development would occur "but for" the tax subsidy. "If it's the most underutilized area in Manhattan, then why wouldn't it develop anyway?" notes Howard Greenwich of the East Bay Alliance for a Sustainable Economy in California, where TIFs are a commonly used development tool. "You're tying the hands of future governments 20 years from now, because these property taxes will be off-line, and there's nothing you can do about it."
The outlook for the planned extension of the 7 train to Eleventh Avenue is similarly hazy. Though the new transit link is the straw on which all else rests, no one knows if it can be completed by 2012 or within the planned $1.5 billion budgetthe MTA didn't even hire a contractor to study the issue until this summer. (Recall that the recently completed Queens Connector took 12 years and $1 billion for a much shorter stretch of track.) Add in security costs (the 2004 Athens Games have budgeted $600 million for security alone) and the need for increased public services to the new development, and the cost of the Olympics could well soar past current estimates.
In fact, cost overruns have been the norm in recent Olympiads. Atlanta lost $1 billion on the 1996 Games, according to Georgia Tech planning professor Larry Keating. Sydney's "best Olympics ever" ended up costing the public more than $1.2 billion, nearly four times as much as original estimates, according to the New South Wales Auditor-General. The 2004 Games in Athens, meanwhile, have been an orgy of blown budgets and missed deadlines: The final tally will run at least $8 billion, the vast majority of it public money, even as the Athens Organizing Committee frantically slashes venues to save cash.
"At this stage it really is all make-believe," says Rob Livingstone of the Olympic bid-tracking site Gamesbids. com. "In Montreal for the '76 Games they hadn't planned a deficit, but of course they had one. Ask a Montreal taxpayer if they're happy about that."
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