Article City Council Voting & Slide Show of Plans

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City Council Votes 45-5 For Olympic Funding Plan
Under Plan, Taxpayers Would Be On The Hook As Last Resort

(CBS) CHICAGO The Chicago City Council has voted 45-5 to approve a plan to offer a financial guarantee of $500 million in local tax dollars for the 2016 Olympics.

But as CBS 2's Joanie Lum reports, the debate before the vote brought a range of opinions.

When the U.S. Olympic Committee visited the city last week, they said the lack of a guarantee of financial backing was the city's most serious weak point in its Olympic bid. Chicago is competing with Los Angeles to be named the American candidate for the games.

"This is going to be a monumental thing for the city of Chicago," Ald. Ed Burke (14th) said, imploring his colleagues to vote for the guarantee.

"The bid for the 2016 Summer Games has, in the words of Daniel Burnham, stirred the soul of Chicago,” he added.

"I think this is a no-brainer," Ald. Danny Solis (25th) said.

While some alderman dared to dream, others said they're concerned about the hard reality of kicking in $500 million of taxpayer money to guarantee the 2016 Olympics.

"I don't want to end up with a lemon on my hands,” said Ald. Ed Smith (28th).

Ald. Toni Preckwinkle (4th), who represents the South Side ward where the Olympic Village would be built, voted against the measure, saying the city's 2016 committee had not been inclusive or operated in a transparent manner. Preckwinkle said she was troubled that talk of a $500 million guarantee did not come out until after last month's city election.

"The same people who didn't tell us anything now want us to trust them that the possibility of using these guarantees is very, very remote,” said Ald. Toni Preckwinkle (4th).

USOC officials told city organizers during an inspection visit that they want the government to "have some skin in the game" to please the International Olympic Committee.

Under the resulting plan, which was unveiled by Mayor Richard M. Daley last week, Chicago taxpayers could be liable for half a billion dollars in overruns, but only as a last resort.

Daley compared the city's financial responsibility to earthquake or tornado insurance.

“This is only an insurance policy, it is only an insurance policy,” he said.

Chicago 2016 Chairman Patrick Ryan has said the organizing committee projects a budget surplus of $525 million, an estimate organizers believe is conservative. That surplus is the first of a five-layer structure of financial guarantees the city will submit to the USOC.

If the Games ran in the red, the first $200 million of losses would be covered by money the city expects to make by selling rights to build the planned lakefront Olympic Village and the rental of luxury suites at the Olympic stadium, Ryan has said.

The next $250 million in losses would be covered by the city. After that, the next $250 million in losses would be covered by private insurance and other undetermined public money, he said.

Finally, the city would stand behind a final $250 million guarantee to dig out from an Olympic financial shortfall.

Some aldermen said they felt excluded from the process. Twentieth Ward Ald. Arenda Troutman (20th), who lost her re-election bid, said this would be her last important vote as an elected official.

"I am still the voice of the people, I must vote no to the continual mistreatment of my community,” Troutman said.

Wednesday's vote also gave the city the ability to enter into intergovernmental agreements with the Chicago Park District, the Metropolitan Pier & Exposition Authority, the Board of Education and other municipalities and private institutions that would grant land and venue use as part of Chicago's bid.

But professor Irv Rein of Northwestern University said last week there cannot be an absolute guarantee that the Olympics will make money or break even. He said even though many cities have indeed made money on the Olympics, that does not mean it is a certainty. It took Montreal 30 years to pay off its debt as a result of organizing the 1976 Olympics.

The USOC will decide on April 14 whether Chicago or Los Angeles will get to go forward with an Olympic bid.

The International Olympic Committee won't pick a host city until 2009, and other bidders are expected to include Madrid, Rio de Janeiro, Rome and Tokyo.