Gov. Jerry Brown signs bill to set aside $250M for potential LA 2024 Olympics cost overruns

Gov. Jerry Brown signed legislation Thursday that provides Los Angeles’ bid for the 2024 Olympic and Paralympic Games a state-funded $250 million guarantee against cost overruns.

Brown’s signing of SB 1465 into law was viewed as critical in the eyes of the Inteational Olympic Committee if Los Angeles’ bid to host a third Olympic Games was to remain viable. The move comes a week before Los Angeles 2024, the local organizing committee, has to submit Stage II bid documents regarding goveance, legislation and venue funding.

“The state’s financial support underscores the united support behind bringing the Games back to LA, but also confidence in our city’s ability to host a fiscally responsible Games that is high-tech, low-risk and sustainable and would allow us to spend the years leading up to 2024 focusing on creating the best possible experience for athletes, fans and all other members of the Olympic family,” LA 2024 chairman Casey Wasserman said.

The new law sets up a state-funded Olympic Games Trust Fund for potential cost overruns. The fund would pay up to $250 million to cover cost overruns related to the Games. The state-funded payments would begin only after LA 2024’s private insurance payouts are exhausted and the City of Los Angeles contributes $250 million.

LA 2024 has projected a $161.1 million surplus on the 2024 Olympics that are expected to come with a $4.66 billion price tag. LA 2024 expects to receive at least $1.5 billion in television and inteational sponsorship revenue from the IOC and $1.437 billion in domestic sponsorship revenues. The 1984 Olympic Games generated a $232 million surplus.

Bid documents state LA 2024 will set aside $400 million for contingencies and will spend $150 million on insurance premiums. LA 2024 officials have told city officials they expect the U.S. govement to contribute $1 billion toward security costs if the bid is successful.

The surplus projection for a 2024 Olympics is based largely on a lack of construction costs because of a wealth of existing venues. Eight-five percent of proposed venues either already exist or are planned with 80 percent of the facilities built since 1984. Bid documents already submitted to the IOC also emphasize the $88.2 billion that will be spent over the next 10 years improving the region’s transit system.

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