Report backs Olympic financing plan

The Civic Federation issued a report Wednesday endorsing Chicago's financial plan for the 2016 Summer Olympics.

"The operating budget of the Chicago 2016 Olympics provides adequate protection for taxpayers," said Civic Federation President Laurence Msall in delivering the report to aldermen at city hall.

Yet he emphasized the word "adequate" and made it clear the 115-year-old Chicago-based, independent, nonpartisan watchdog agency was not endorsing the Olympic bid, only the soundness of the city's financial plan for the games, and he added significant provisos.

The report found the city's $4.8 billion Olympic bid solid, but emphasized that the plan must be followed by an independent, nonpolitical organizing committee should Chicago win the games when they're awarded by the International Olympic Committee in October. It also called for the city council to maintain an independent oversight role.

Finally, it called on the city to follow its plan to make these the most heavily insured games in history, especially given the uncertainty of the real-estate market with what would become the Olympic Village.

"Real-estate risk can be managed," Msall said. "All the risk cannot be eliminated."

Chicago's plan calls for the Olympic Village to be based on the former site of Michael Reese Hospital on the near South Side. The report pointed to the recent decline in the real-estate market that caused problems for Vancouver's upcoming Winter Games next year. Yet with "capital-return insurance" and other deals to make this the most heavily insured games, Msall said, the Olympics would most likely not have to draw on the city and state contingency funds being set aside as guarantees the games would be fully financed no matter what.

"There is an enormous amount of work for the city council to perform," Msall added. "The city council has to exercise its oversight responsibility."

Msall said it was essential for the city to find an independent, capable, financially astute chief executive officer to lead the organizing committee. Without naming names, he suggested someone along the lines of Peter Ueberroth, who oversaw the Los Angeles Summer Games in 1984. Msall took no position on Chicago 2016 Chairman Pat Ryan.

The city council commissioned the Civic Federation to do an independent, objective review of the Chicago 2016 plan in June. The 90-page report was delivered after six weeks at a cost of more than $100,000, much of it paid for by local foundations aligned with the Civic Federation. It was performed largely by London-based L.E.K. Consulting, a firm that does have business with the city, but Msall said he felt confident that did not taint the findings, saying, "We believe it was able to carry out a full and independent review."

Chicago is up against Rio de Janeiro, Madrid and Tokyo as finalists for the 2016 games. The IOC is scheduled to make a decision Oct. 2.