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Los Angeles Aims for 'No Build' 2028 Olympics on the Cheap

City Seeks a Repeat of Its Profitable 1984 Games With Minimalist Real Estate Approach

The Tokyo Games will be among the most expensive Olympics in history.

Tokyo bet big on real estate for the Summer Olympics that open on Friday by shelling out $15.8 billion on sports and other facilities, only to have the pandemic delay the games and leave the buildings largely empty. Los Angeles plans to take a far different tack in 2028.

Any economic boost Los Angeles gets from hosting its third Olympics seven years from now won’t come from expanding its sports real estate.

Organizers in one of the nation's most traffic-clogged regions are looking to avoid both worsening L.A.'s gridlock and repeating cost overruns that plagued past Olympic host cities by promising a “no build” Los Angeles Games. That means zero new permanent venues will be constructed for the 2028 Summer Olympics, as organizers instead use the region’s existing university and professional sports facilities.

“The approach not only makes sense from a cost standpoint, but it’s definitely going to help minimize the disruptions you might otherwise see with an event like this,” said Peter Belisle, Southwest market director in the Los Angeles office of brokerage JLL and a longtime L.A. resident.

An aerial view of the Los Angeles Memorial Coliseum, home to the USC Trojans and host venue of the 1932 and 1984 Olympic Games.

The Tokyo Games, which are scheduled to run through Aug. 8, will be among the most expensive Olympics in history, according to a study by the University of Oxford. The event has sped past organizers' original projected budget of $7.3 billion, while drawing added criticism in Japan for going forward despite rising COVID-19 cases and limited vaccinations.

That criticism extends to costs for eight new permanent venues, including a stadium built to accommodate up to 80,000 spectators who now won't be allowed in the building because of COVID-19 concerns. The full costs, including those for navigating the pandemic as well as lost ticket and sponsorship revenue, may not be known until well after the Tokyo Games conclude.

Los Angeles officials have a $6.9 billion budget for 2028 with a “no impact” approach to construction that was announced in 2019 by the official organizing committee, known as LA28.

“Our budget is privately-funded, realistic and fiscally conservative,” LA 2028 chairman Casey Wasserman said in a statement. “We are redefining what it means to host a successful Games.”

Of course, while officials said the budget was independently evaluated by accounting firm KPMG and includes a $615.9 million contingency fund to address any unforeseen overruns, it's still difficult to control actual spending on such a sprawling project. A spokeswoman for LA28 said organizers would not be commenting beyond prior statements and public disclosures.

Cost Concerns

Even so, the committee is aware of the importance of appearing tightfisted with spending to win public support after several other Olympic cities saw costs for venues and support systems more than double their original budgets. For instance, the 2014 Winter Olympics in Sochi, Russia, ultimately cost organizers and the city $55 billion, the most expensive games in history, either summer or winter, after originally being budgeted at $10.3 billion, according to Oxford University and the Council on Foreign Relations data.

That was followed by the 2008 Summer Olympics in Beijing costing $45 billion after being budgeted at $20 billion.

“We are focused and responsible for putting on this event, doing it privately, and taking pressure off the city,” LA28 operations director Lenny Abbey told the news website Curbed after the International Olympic Committee awarded the games to Los Angeles in 2017.

With zero building, the plan for 2028 is even more conservative when it comes to construction than the Los Angeles Olympics of 1984, also known as the only Olympics of the past 60 years to actually make money.

Ahead of the 1984 Games, organizers built two new venues totaling about $8 million, about $20.5 million in today's dollars for construction costs that were largely absorbed by the private sector, according to organizers. One was the Olympic Velodrome for track cycling events on the campus of California State University at Dominguez Hills in the South Bay suburb of Carson, financed largely by a group of corporate backers led by convenience store giant 7-Eleven.

Steve Hegg of the United States celebrates winning the men's 4000 meter individual pursuit in 1984 at the Olympic (7-Eleven) Velodrome at California State University in Carson, California.

The other was the swimming venue at the University of Southern California in Los Angeles, originally known as McDonald’s Olympic Swim Stadium in a nod to the hamburger chain that was its principal financial backer.

Both of those venues that were newly built for the 1984 Games have since been renovated or replaced, and both are among the list of 22 probable competition sites in the Los Angeles region identified by organizers for 2028.

The Uytengsu Aquatics Center Competition and Dive Pool at the Olympic Swim Stadium at the University of Southern California.

A steady symbol of the reuse and recycle strategy is the venerable Los Angeles Memorial Coliseum, which was built nearly a century ago in 1923 and made its global debut when Los Angeles held its first Olympics in 1932.

That venue served as the ceremonial and competition center for the 1984 Games, and it is now poised to play a similar role in the 2028 Olympics.

Elsewhere, the Coliseum will share a large part of ceremonial and other host duties with the privately built, $5.5 billion SoFi Stadium in Inglewood, which opened last year as the new home of the NFL’s Rams and Chargers.

The L.A. Memorial Coliseum under construction in 1922. The large stadium was built in less than two years, from December 1921 to May 1923.

The 2028 Los Angeles Games will also take place at existing venues such as Staples Center, home to the NBA’s Lakers and Clippers, and Honda Center, home of the NHL’s Anaheim Ducks. Plans also call for the use of existing facilities at convention centers in Los Angeles and Long Beach.

As with the 1984 Games, the bulk of 2028 competition will take place at gyms, sports fields and arenas built years ago at educational institutions such as the University of Southern California, California State University and University of California Los Angeles.

UCLA’s existing student housing will serve as the Olympic Village, and similar residential facilities at USC will house international members of the media covering the games. Universal Studios Hollywood, owned by the parent of Olympics broadcaster NBC, will serve as the media center for TV crews from around the world.

Regional Effects

For its part, the city of Los Angeles is not building new transportation systems specifically for the 2028 Games, but has sped up some transit improvement projects that were already approved or underway before the city was selected in 2017 to host the games. Those include subway, light rail, rapid bus transit and express lane additions, designed to better connect riders to most parts of the city and expected to be finished before the start of the games.

The Los Angeles Games are expected to have an $11 billion regional economic impact, according to a 2017 study by University of California, Riverside and consulting firm Beacon Economics, commissioned by the organizing committee. The impact includes $167 million in tax revenue, up to 79,000 new full-time jobs and about $7 billion in direct spending.

The city of Los Angeles is counting on the use of existing facilities to keep costs down for 2028, and for ticket sales and corporate sponsorships to exceed projections and help the city avoid the fate of past Olympics hosts and turn a profit. The LA28 budget anticipates $2.5 billion in corporate sponsorships and $1.9 billion in ticket sales as the two largest revenue generators.

The biggest anticipated expenses are temporary venue infrastructure at $1.4 billion and game support services at $1.2 billion.

The Opening Ceremony of the 1984 Summer Olympics on July 28, 1984.

The Oxford study noted that Olympic Games historically have averaged cost overruns of 172%, though the 1984 LA Games turned a profit of $232.5 million, more than $600 million in today's dollars, according to game organizers.

“We made a million dollars in 1932, we made [nearly] $250 million in 1984,” Los Angeles Mayor Eric Garcetti said at a 2019 sports summit in L.A. “I think we will make at least a billion dollars in 2028.”

If Los Angeles is able to avert traffic congestion headaches during the 2028 Games, possibly by encouraging or requiring the use of mass transit during peak driving times, JLL’s Belisle said the Olympics should boost sales at stores, restaurants, hotels and other businesses near game sites.

Since many of the city venues will be in largely built-out neighborhoods, Belisle doesn't expect a wave of non-Olympics private construction near those sites, "though you may be seeing some property owners looking to bolster the tenant mix and fill in the vacancies ahead of time if they have ground-floor retail near the venues,” he said.

Another potential benefit: Los Angeles is among several U.S. cities vying to host matches during soccer’s high-profile FIFA World Cup tournament in 2026.

“There’s a sense that the World Cup would be a really good dress rehearsal for the Olympics in L.A.,” he said.

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