Boston is no longer in the running for the 2024 Summer Olympics. While the City convulses in streams of joy and sorry, the question “what went wrong” emerges. The answer to that question may go back to 1822 when the city was incorporated, over 200 years before the Olympics would have happened. Or maybe the cause is traceable back to 1630 when Boston was first incorporated as a town. There is a fundamental mismatch in the mutually considered investment strategies of the USOC and the City of Boston.
Matching is a key issue in capital finance. “Rules” dictate that the length of the borrowing period must match or be less than the length of asset life. Don’t try to borrow money to pay for a new roof with a 20 year life and arrange financing to pay for it over 30 years. That is not a match.
A similar “rule” applies for designating an Olympic Host city: The city needs to have the space to accommodate all Olympic requirements within their own jurisdiction. Or the city needs to have the open ended backing of the larger jurisdiction that would meet the Olympic host contractual requirements.
The USOC picked Boston for various reasons. One stated reason was to launch a new Olympics model featuring a smaller, more walkable venue. Tourists to Boston know the City meets that standard. But the USOC had additional requirements for larger stadiums and more event facilities than the city was likely to provide within its city limits. And, given the nature of state – local relations around finance, not just in Boston, but across the US, the city could not guaranty that required venues could be found within its borders. And it could not guaranty that the USOC’s facilities requirements could be met in locations outside of its borders.
The city of Atlanta has jurisdiction over 133.15 square miles. The city of Los Angeles has jurisdiction over 468.67 square miles. The city of Boston has jurisdiction of 48.26 square miles.
Boston doesn’t control enough land to provide for the venues required by the USOC. Had the city had an inter-governmental agreement for the location and financing of the USOC required venues, the match might have worked. But in New England, there is little tradition for that kind of intergovernmental partnership. New England lacks county government which, in the rest of the USA, provides a potential mediator or partner for achieving uses beneficial to the city but requiring jurisdictional cooperation beyond the city’s boundaries.
The finger pointing for who is to blame and who gets the credit has begun.
But without this intergovernmental partnership to respond to the substantial space requirements of the USOC, and given a tight deadline, Mayor Marty Walsh had little alternative but to end the process.