Glamour, pride and cash: Why cities compete to put on a sports spectacle

theglobeandmail.com
July 5, 2015
By Dakshana Bascaramurty

Here they were, with sweaty palms, patriotic red scarves and ties around their necks and $9.7-million invested in a big idea. The group from Toronto had crowded into a hotel ballroom in Guadalajara, Mexico, in November, 2009, with several hundred others to watch votes being counted in a way that suggested a student council presidency was on the line rather than a multibillion-dollar sports event.

Veteran swimmer Benoit Huot says the uniforms for the 2015 Pan Am and Parapan Am Games are the best he's ever seen. The uniforms were unveiled in Toronto Wednesday.

In the previous 18 months, members of Toronto’s Pan Am Games bid team, doing their best imitation of political party leaders at election time, had flown to such destinations as Paraguay and Ecuador in hopes of convincing the group of 51 Pan Am voters to back the Toronto ticket. On that day in November, they delivered an elaborate 50-minute presentation: a final splashy sell of their city capped with a moving short film about average kids from the Americas growing up to be athletes and competing in the 2015 Pan Am Games in Toronto. The bid team, made up of politicians and business people, and endorsed by both the federal and provincial governments, wanted this. Badly. The city was haunted by two failed bids for the Olympic (beaten by Atlanta in 1996 and Beijing in 2008).

Jagoda Pike, the bid team’s president, sat in the first row of chairs, watching officials count the votes. They called out what was written on each ballot before placing it on the table in front of them in one of the three piles that represented the three finalists: Toronto, Lima and Bogota. Ms. Pike anxiously watched as one of pile grew faster than the others. Soon, she and a few others clued in to the fact that the tall pile was Toronto’s.

Even as she and her entourage rose to their feet amid cheering, hugging and the kind of smiles that hurt your face, nearly 4,000 kilometres away, the naysayers were piping up. Had Toronto actually won something of value or had it been caught in a $1.4-billion boondoggle?

Six years later, nearly 7,000 athletes are about to descend on the TO2015 Athletes’ Village located in a downtown neighbourhood built from scratch - and the budget has swollen to $2.5-billion. The last time the Toronto region played host to a sporting event of this magnitude was in 1930, when the inaugural British Empire (now Commonwealth) Games, came to Hamilton.

Come fall, when the bunk beds are removed from the athletes’ village, sports venues convert to their long-term use, and final medal counts are forgotten, the lasting legacy of the games may be more apparent.

But for now, cynics are still asking why Toronto, or any city, would want to take on something so colossal, so logistically complex and frightfully expensive - unless perhaps it had a greater prize in sight.

In many ways, the Pan Am Games are the little sister of the Olympics in the Americas. For the past 64 years, they have been staged every four years (always the year before the Summer Olympiad), showcasing many of the same sports but not always the same calibre of athlete. (Swimmer Michael Phelps won’t be in Toronto, nor will sprinter Usain Bolt.) They’re governed by the Pan American Sports Organization, but follow the same charter as the Olympics and are largely organized by the same tribe. Many of the executives on Toronto’s Pan Am organizing committee worked with the team that put together the Vancouver Olympics in 2010.

These major sporting events typically run for just a few weeks but their allure to host cities goes well beyond that: They can be a catalyst for building transit and new facilities, and offer emerging municipalities a chance to get on the map.

In playing host, Toronto is putting a lot on the line: It hasn’t taken on an event of this scale in 85 years and is spending far more to do so than any of its predecessors. Just a week before the opening ceremonies, organizers are praying the gamble has been worthwhile.

Sparked by sports

Late on a Friday afternoon in mid-June, Toronto Mayor John Tory is making dinner, to a soundtrack of camera shutters. He isn’t going to eat it, of course - he never allows himself to be photographed doing that. Flanked by the chief executive officer of the Pan Am Games and its chef de mission, he is placing slices of pepperoni on a sauced-up round of dough to show off the expansive food hall in the new athletes’ village. This photo op is followed by another: a ribbon cutting on Queens Quay, the waterfront boulevard finally open after years of construction - just in time for the Games.

This is supposed to be a good press day for Mr. Tory, for the city and the Pan Am organizing committee. Hey, look at all this city building we’re doing. We have new things - we’re a world-class city!

But both projects, as well as others expedited for the Games, have long been on Toronto’s to-do list. Only an infusion of cash from upper-level government (the province has even assigned Pan Am a cabinet seat) and a firm deadline have spurred them to completion.

That is how it goes with major athletic events.

Their popular appeal crosses party lines and serve as tools for communities to pry generosity from otherwise stingy upper levels of government. Vancouver knows this all too well. The Olympics attracted cash injections to accelerate major infrastructure projects so it could show its best self to the world. It upgraded its Sea-to-Sky Highway and built the Canada Line extension to its Skytrain. The Olympic Village spurred building in the False Creek area, long a target for redevelopment.

Similarly, the Pan Am village is in the West Don Lands, an area Toronto had a long-term vision to revamp. After the cyclists and sprinters decamp, it will be an instant neighbourhood composed of community-housing towers, condominiums, a YMCA, a student residence for George Brown College and an award-winning park. The development sprang up in record time, again due in large part to a gift of capital from the province. Without it, Waterfront Toronto, the agency representing all three levels of government that oversaw the project, anticipated it would be completed between 2020 and 2025.

Queens Quay had encountered setback after setback for three years after work began. After several deadlines were missed and with the Games creeping closer, Waterfront Toronto put its foot down.

“We said to our contractors, we said to our partners...You cannot delay now. You can’t come to us in a couple months and say, ‘We need longer,’” said Meg Davis, the agency’s vice-president of development for the West Don Lands. The cost of the village and other infrastructure ordered to be ready for the Games has almost doubled the original Pan Am budget, bringing it to no less than $2.5-billion.

Weeks before the Mayor’s pizza demo, there was much fanfare in the city over completion of the Union Pearson Express, a rapid-transit shuttle that transports people 24 kilometres between the downtown train station and Pearson International Airport northwest of the city - another long-awaited project expedited for the Games. Media coverage of these shiny, new things has taken on a celebratory tone, but some ask why it took a multibillion-dollar sporting event to make them happen.

“Do you really need a mega-event to catalyze spending and to get projects built that really we should’ve been building all along?” asks Matti Siemiatycki, an associate professor at the University of Toronto who specializes in planning and says the city has “missed a generation of infrastructure.”

Mayor Tory, however, sees the situation as inevitable: “In business, half the time when you say you’re rolling out a new product, there’s a date by which you have to do it - the show must go on. I think it’s human nature that you put off these things until you no longer can put them off.”

In Toronto, even with Pan Am Games pressure, not all the projects on the city’s wishlist have been finished in time. A new concourse at Union Station - the major downtown Toronto transit hub - was to be done by now but a new target date of 2017 has been set. The pedestrian tunnel that was to connect Billy Bishop Airport, located on Toronto Islands, to the mainland terminal, also won’t be open until after the Games have wrapped despite ambitions to have it ready for crowds arriving for Pan Am.

A promise of major infrastructure upgrades may encourage public backing for a Pan Am or Olympic bid, but there is no guarantee it will be kept. The original budget for the 2007 Pan Am Games in Rio was $162-million, the true cost may have exceeded $1.6-billion. Rio’s promises included an expanded transit network, a ring road, a new highway and, most important for residents, the cleanup of sewage going into beautiful Guanabara Bay. None of it materialized.

The federal and provincial governments pledged so much support for Pan Am on condition the wealth be spread throughout the Golden Horseshoe. So, while four new venues have sprung up in Toronto, others are scattered across southern Ontario: a velodrome in Milton; a soccer stadium in Hamilton; a badminton, table tennis and water polo venue in Markham. But some still saw missed opportunities.

A vision for the much-needed redevelopment of Hamilton’s waterfront was central to a bid Ms. Pike had helped put together to have the city hold the 2010 Commonwealth Games. The plan died after that prize went to Delhi, then was revived for the Pan Am bid, which proposed a lakefront stadium for track and field.

Instead the stadium went to York University’s campus in north Toronto again denying Hamilton’s waterfront the dramatic transformation it seems only a major sporting event can make a reality.

Instead of lamenting missed opportunities, Mr. Tory looks to the future. If things go well at Pan Am, he says, the city should “be looking for other events that will help us to keep focus on building more infrastructure, developing more neighbourhoods and doing things.”

Yet this phenomenon also has a downside: Organizers rush to finish projects that might be better following a slower, market-driven timeline. In Vancouver, the city took four years to pay down the debt it took on to build the Olympic Village on False Creek. It was to be converted to condominiums, but the recession hit during construction and developers went bankrupt. The city inherited $690-million in debt and struggled to sell pricey units in what was routinely described as a “ghost town.” Only last year did it finally get rid of the last of them. The village is now considered a success story, albeit one with a tumultuous past.

Madcap mascot

Pachi is working up a sweat, or rather whoever is in costume as the seven-foot (maybe eight with the yellow ball cap) porcupine who looks like Chip ’n’ Dale’s flamboyant cousin. The Games’ mascot is dancing in front of the bleachers of the venue where the soccer events will be held. The city lost its shot at a waterfront makeover, but it did get the $145-million Hamilton Pan Am Stadium.

Pachi tries to spark some excitement among the dozens of children who have been bused in to fill the stands, and surprises unsuspecting reporters with unwanted hugs: a one-rodent cheerleading squad. The fanfare stems from the fact the stadium is officially finished - in late May, almost a full year after its original target date. After the crowd hears from a soccer star and the province’s Pan Am minister, Mayor Fred Eisenberger, in mirrored shades and an unbuttoned navy jacket, takes the podium and expresses how excited he is. It’s a sharp change of tone from the previous week, when he’d sent a blunt letter to the premier’s office complaining about all the delays.

Then, after obediently kicking around a soccer ball for the cameras, he joined a reporter to vent further about how the process had tested his patience and that of the city, which had sunk $54-million into the venue, which is to become the home of the Tiger Cats - the city’s storied team in the Canadian Football League.

“There’s going to be lessons to be learned after all this is over. I have no doubt there may even be some lawsuits,” he says.

Asked what lawsuits, he sees the city communications official standing beside him is alarmed, and doesn’t elaborate.

Builders encountered a multitude of complications, from replacing faulty caulking that caused leaks in offices to 11th-hour modifications to make sure the stands could support thousands of spectators. The builder will cover the cost, but these setbacks became a year-long headache for subcontractors, city councillors, the Tiger-Cats and Hamiltonians.

The same rang true in Rio, when the Brazilian metropolis parlayed being a Pan Am host into a winning bid for last year’s World Cup of Soccer and next year’s Summer Olympics - except on an even larger scale. In fact, Brazil is the poster child for sports-sparked development, and now has more soccer stadiums than it knows what to do with. One that cost $900-million U.S. in Brasilia, the capital, is now a parking lot for buses.

Rio also won the Pan Am Games by pledging to build several expensive sports venues, the crown jewel being the oblong Estadio Olimpico Joao Havelange which, with its partial white roof, looks from the sky like a powdered donut. Originally it was to cost about $24-million, which rose to six times that - $152-million - by completion. Proponents said Brazil’s second-largest city long needed such a venue, which helped Rio win the Olympics.

But it, like many of Rio’s “Olympics-calibre” facilities, has not held up over the years, and is now undergoing extensive renovations for the Olympics.

It’s a concern that New Democrat MPP Peter Tabuns has for Toronto: “I worry that, if they use up the cash on simply construction and operation and don’t have the money to endow the facilities so they’re there for people to use in the long run, that will be a huge waste of the investment.”

Alberto Murray Neto, a former member of the Brazilian Olympic Committee based in São Paulo, says the Summer Games bid by Rio was a way to justify the enormous expense and has just drained its coffers further. Many in Brazil bitterly criticize the decision to sink billions into big sports events when there is so much need for spending on health care, public transit and education in a country where so many still live below the poverty line.

The notion of turning a profit on something like the Pan Am Games is a thing of the past. Winnipeg cleared a modest $8-million in 1999 - not bad for a relatively small investment of $130-million. But four years later, Santo Domingo had major cost overruns, a trend that continued with Rio and then Guadalajara in 2011.

Mr. Murray Neto also scoffs at the desire expressed by many host nations to increase interest and participation in athletics. Why, he asks, was programming for Brazil’s impoverished youth not the starting point and why were facilities not designed for broader use by the public?

“They are trying,” he explains, “to start to do a house from the roof.”

The Montreal factor

The sky was falling. The billowing blue Teflon cover on the main venue of the 1976 Summer Games had buckled under the weight of the winter and torn open. A small avalanche of ice and snow tumbled 61 metres to the floor of Montreal’s Olympic Stadium. The auto show inside had to be cancelled.

Rio is far from the only city that knows what happens when a legacy proves to be an albatross.

Mayor John Drapeau, renowned for the successful Expo 67 World’s Fair, boasted in 1973 that “the Montreal Olympics can no more have a deficit, than a man can have a baby.” Famous last words. The original budget ballooned from $360-million to $1.5-billion, and took the city three decades to pay off.

Montreal is hardly alone. An analysis of all Olympic host cities from 1960 to 2012 by researchers at Oxford University’s Said Business School found cost overruns in every case.

They identified the Montreal overrun - 796 per cent - as the biggest (since eclipsed when Sochi spent a reported $51-billion on last year’s Winter Games).

Although “seen to be a very inexpensive bid at the beginning,” says Allison Stewart, one of the report’s authors, Montreal’s effort accelerated. “It wasn’t just enough...to be sufficient. It had to be really special.” The city had been caught up in the Olympics culture of peacocking.

Then there are the long-term costs.

When the sky fell in January, 1999, it was just the latest of many disasters to plague the on the Olympic Stadium. Key parts of its design, including the spage-age, retractable roof, weren’t even ready for the opening ceremonies in 1976.

Home to the baseball Expos from 1977 to 2004, the “Big Owe” has since fallen from glory and mostly been used to host trade shows that don’t cover its operating costs, let alone the $700,000, orange Kevlar roof added in 1987, the Teflon replacement in 1998 that cost a whopping $37-million or the $220-million in repairs the province now says are required over the next decade - and don’t include the roof.

Also, for years after the Games, the city didn’t know what to do with the velodrome it had built because normal cycling demand wasn’t nearly enough (a similar fear looms over the new Milton facility). In the 1980s, it became the Montreal Biodome, an indoor, multi-ecosystem tourist attraction.

Despite the cautionary tale presented by past hosts such as Montreal, the prestige seems priceless to those vying for the honour, says Curt Hamakawa, director of the Centre for International Sport at Western New England University.

A member of the U.S. Olympic Committee from 1990 to 2006, he says that, while intellectually, both bid organizers and the public understand the “social and economic ills” that come with events of this size, the chance for fame and notoriety often outweighs them. Especially for emerging cities, such as Seoul, Rio and Beijing.

“It’s like getting something precious, a crown jewel, if you like, for their city,” Mr. Hamakawa explains. “Most people are proud of the place that they call home and they want to boast about the specialness of their city. Hosting an Olympic games does that like almost nothing else.”

Despite having been a booster of the Olympics institution for 16 years, he can’t cite a single city that has fully utilized all the expensive, expansive facilities it built. For Pan Am, the Commonwealth and Olympic Games, venues are always overbuilt to meet the capacity of such major events - and there is little opportunity to have anything else of that magnitude afterward. The stunning Ai Weiwei-designed Beijing National Stadium, better known as the Bird’s Nest, was built for the 2008 Summer Games with a seating capacity of 91,000. It has sat virtually empty since then, hosting a handful of events of much smaller scale.

There are really only two bona fide success stories: Los Angeles and Barcelona, says U.S. economist Andrew Zimbalist, author of Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup.

Los Angeles won the 1984 bid because it had no competitors and was therefore able to get away with using existing venues; communication and transportation infrastructure were also already in place.

In 1992, Barcelona took on the Summer Games because doing so aligned with a long-term vision rebuild various rundown parts of the city. From the outset, legacy was the priority.

“They took the Olympics and folded it into the city plan, and they made the Olympics work for the city,” Mr. Zimbalist says.

“That reverses the typical sequence.”

Build it, but will they come?

In March, basketball phenom Andrew Wiggins, the pride of Vaughan, just north of Toronto, arrived with the Minnesota Timberwolves for a much-hyped game against the Raptors. During practice at the Air Canada Centre reporters asked whether he’d be wearing a Team Canada jersey at the Pan Am Games.

The bashful 20-year-old was noncommittal, saying he would make the call after the season. In the end, the league’s rookie of the year passed on the opportunity. While the Olympics may draw many professional athletes, the much smaller stage the Pan Am Games offers doesn’t have the same pull. They couldn’t even land a hometown boy.

A poll conducted in May highlighted the plain reality that the Pan Am Games are seen, at best, as a second-tier sporting event even in their host region.

About four in five adults in southern Ontario said they did not plan to buy tickets to the Games. A local paper ran the results with an unapologetically harsh headline: “Most of us not interested in Pan Am Games: Poll.”

Since Toronto won the bid, the most coverage Pan Am has received in Toronto media has focused on steadily growing security costs and expense scandals involving members of the organizing committee.

This past week, most Pan Am-related stories were about driver complaints about the region adding new high-occupancy vehicle lanes on many major highways and restricting their use to vehicles carrying three or more passengers.

Despite this, the organizing committee hasn’t tempered its ambitious expectation to see Pan Am fever break out. From the start, it has said its goal is to sell out every single event - 1.4 million tickets in all. At last count, sales were less than half of that - just shy of 650,000.

So why did Toronto bet so large on an event with limited appeal?

Winnipeg - the only other Canadian city ever to be a Pan Am host, which it has done twice - had a modest goal as well as a modest budget.

Sandy Riley, chief executive officer of its 1999 operation, says the ultimate objective was to build community in a city that needed a boost after having lost the Winnipeg Jets hockey franchise in 1996. A new athletic centre was built on the campus of the University of Manitoba, but the rest of the spending mostly went to minor upgrades on existing facilities or the construction of temporary ones, such as the velodrome, which was dismantled soon after the closing ceremonies.

Toronto, however, still clings to its Olympic dream.

“I think there was a sense that...if we were ever going to move into the conversation again, we were going to have to demonstrate that we could actually pull this off,” Mr. Siemiatycki says. “That was another longer-term reason to be bidding for this.”

The term “Olympic-calibre” has been used by many members of the TO2015 team to describe Pan Am facilities and many of the senior executives from the 2010 Vancouver Olympics team were hired to work on Pan Am.

For now, though, they shy away from questions about the prospect of an Olympic bid. When asked in May if the Olympics would be his focus after the Pan Am Games wrapped, CEO Saad Rafi bristled.

“No,” he replied bluntly. When pressed on whether Toronto had what it took to host an Olympic Games, he remained reticent.

“I don’t know. I’ve never hosted an Olympic Games. I wouldn’t know.”

Before joining the Pan Am venture, Mr. Rafi was Ontario’s deputy health minister in Ontario, getting his current job, which paid him $438,718.52 last year, the original CEO, Ian Troop, departed amid accusations of improper spending and rumoured clashes with the Pan Am board’s chair, former Ontario premier David Peterson.

And Mr. Rafi is right to be cautious about any Olympic ambitions before the Pan Am has even held its opening ceremonies. It’s believed that Delhi’s poorly run 2010 Commonwealth Games (similar to the Pan Am in size) tainted its chances at an Olympic bid for 2024.

Changing Olympic landscape

So much depends on how things go at Pan Am. Then again, a cultural change is afoot at the International Olympic Committee that could bode well for Toronto. Last year, largely in reaction to the reported $51-billion cost of the Sochi Winter Olympics, which has discouraged others from bidding on the Winter Games, the IOC passed Olympic Agenda 2020.

This new legislation is meant to discourage the construction of white elephants and, in the bidding process, give credit to cities who have existing sports venues that would only require minimal upgrades to make them “Olympics-ready.”

“Sustainability and legacy are at the core. Really, the event has to serve a long-term purpose,” says Christophe Dubi, executive director of the Olympic Games, in an interview from Lausanne.

Even so, cities are waking up to the realities of the costs and benefits. The allure of playing host is waning. The organizing committee in Boston behind the city’s bid for the 2024 Olympics has called for a statewide referendum to gauge public opinion - polls have shown very low support among residents so far.

Last year, a host of European cities including Munich, Stockholm and Davos, Switzerland, all contemplating a bid for the 2022 Winter Games pulled out, many due to lack of public support.

But not everyone is having second thoughts. Last month, the head of the Canadian Olympic Committee told a reporter he plans to start bid discussions later this summer.

“My view,” Marcel Aubut explained, “is this country should look at the Summer Games as a priority - and there’s not any city in the country other than Toronto that could offer the site to do this.”