Urban Future Initiative
Digital Roundtable
August 10-15, 2009
Moderated by: Samuel Assefa, Associate AIA, LEED AP
Subject:
Cost Benefits of Mega-events in the Context of Global Competition

Since London’s “Great Exhibition” of 1851, the first modern international exhibition, mega global events (World Expo, Olympic Games, World Cup, etc.) have been utilized to attract visitors and bring prosperity to the host city or state, and to establish mutual understanding and fellowship among people of different nations. Chicago’s World Colombian exposition of 1893 brought technologies and cultures from around the world, and over 27 million people (half the U.S. population at the time) attended during its six-month run. Its scale exceeded all other world fairs before, and it has been credited for introducing the emerging “American Exceptionalism” to the world, much in the same way that the “Great Exhibition” became a symbol of the Victorian era United Kingdom. In 1935, at the height of the Great Depression, a group of New York City businessmen planned for an international exposition to lift the city and the country out of depression. The New York World’s Fair was held in 1939, and like Chicago’s, it remains one of the largest world fairs of all time. However, unlike Chicago, it was an economic failure having generated only $48 million in revenue, compared to the $67 million investment by the organizers, the Fair Corporation, and nearly $100 million from other sources.

In recent years, the number of cities and states competing for the rights to host mega-events such as the Olympics have increased. At the same time, critics and voices against such events have equally increased, citing the high cost of temporary use venues which end up in a state of neglect years after the event, the social disruption such as eviction and displacement, environ¬mental degradation, and, most importantly, misdirected public investment. The 2008 Beijing Olympics, the most expensive to date, cost upwards of $45 billion (some economist project it could be as much as $70 billion!). London’s 2012 Olympics, initially budgeted for $3.9 billion, is already projected to cost at least $12 billion. While the 1992 Barcelona Olympics has been held as a model by many, critics such as Carolina del Olmo of Universidad Complutense de Madrid argue that its success is over exaggerated because the public resources used for the events, in¬cluding infrastructure, were simply redirected from one sector to another. She writes “… demand growth related with a mega-event doesn’t produce a net income, because it is a consequence of a mere change in the direction of the resource’s flow; that is, the resources go to a specific sector or a particular place but only because they are coming from another sector or place.”

However, despite the fact that the cost of mega-events always ends up significantly more than initial projections, while rarely producing expected economic returns, they have become impera¬tive tools for cities and nations to gain political, cultural, and commercial competitive edge in today’s global economy.

Maurice Roche, in his book Mega-events and Modernity, writes about mega-events, “in 2000, at the turn of the twentieth century, they (mega-events) are beginning to assume, once again, the kind of high political and cultural profile they had in 1900.” In com¬menting about the 1992 Barcelona Olympics, then-Mayor Pasqual Maragall admitted, “We have used the Olympic games as a pretext to obtain three key objectives: improving the quality of life in the city, exploring the economic impetus generated by the Olympics, and establishing Barcelona as a major European city.” (Bake and Tower 1996). Most agree today that hosting the 1992 games has launched the once obscure Catalan city into recognition as a “global city” almost overnight. When South Africa hosted the Rugby Union World Cup in 1995, it helped transform its image and introduced the new post-apartheid country to the world. China has used the 2008 Olympics to transform the countries image, and to position Beijing as a “global city.” At the 10 year anniversary of the 1996 Olympics games, Sam A. Williams, president of the Metro Atlanta Chamber of Commerce, stated “Atlanta has never stopped leveraging our Olympic opportunity to revitalize downtown Atlanta, recruit companies from all over the world and host the biggest and best sporting events in the nation.” A worldwide Lou Harris poll indicated that Atlanta’s image among corporate decision makers doubled after the Olympic games.

As Shanghai prepares for the 2010 World Expo, expected to attract 70 million visi¬tors, South Africa prepares for 2010 FIFA World Cup, the first in Africa, London pre¬pares for the 2012 Olympics, and as Chicago, Tokyo, and Rio de Janeiro and Madrid vie to host the 2016 Olympics, we have asked the Urban Future Initiative Fellows to explore the following questions:

• Are mega-events as relevant today as they were over a century ago, if so, why?
• What are the tangible and intangible benefits of hosting mega-events?
• Do the intangible benefits of hosting mega-events automatically outweigh their costs?
• What is the relevance of mega-events to global competitiveness?

About the UFI Digital Roundtable moderator:

Samuel Assefa served on the jury for the 2008/2009 UFI Fellowship. He is the former director of Policy for the Chicago Department of Planning and Development, where he helped oversee implementation of green planning and urban design policies. Prior to joining the City of Chicago, Mr. Assefa taught architecture at the California College of Arts and currently serves on various boards and civic organizations. He has worked in the private and public sectors in architecture, urban design and community planning. He has designed and implemented sustainable land use policies in various cities. As the senior urban designer for the City of San Francisco’s Planning Department, he developed and directed land use policies for high-density, transit-oriented developments, industrial area design guidelines, and guidelines for high-rise mixed-use developments for San Francisco’s downtown.