Seven reasons they’re so terrible for cities.
Pick a mega-event, and chances are you won't struggle to find something about it that went terribly, terribly wrong.
Athens lost billions of euros on the 2004 summer games en route to an economic collapse. Sochi built an outrageous train line for the Winter Olympics that was barely running a year later. New York's much-hyped mass transit Super Bowl left some fans stranded for hours. Thousands of people were evicted so Brazil could host the World Cup in 2014, and thousands of construction workers will die so Qatar can host it in 2022.
There's no cherry-picking here. The problems with mega-events "are well documented and occur in almost every case," writes geography scholar Martin Müller of the University of Zurich in a recent issue of the Journal of the American Planning Association. After interviewing dozens of planners and officials, examining documents and media reports, and visiting sites in 11 countries, Müller identified seven symptoms of what he's calling the "mega-event syndrome":
Together, these symptoms too often turn mega-events into obstacles rather than boons to urban development. The mega-event syndrome results in oversized or obsolete infrastructure for an inflated price that the public is forced to pay and in an uneven and inefficient allocation of resources. These symptoms repeat themselves, to a greater or lesser degree, in mega-events around the globe.
Let's take a closer look at the disease.
1) Overpromised Benefits
Mega-event promoters like to make big promises about the impact on jobs, the economy, infrastructure, and so on. The promoters themselves make a profit, but the greater social costs of these promises often far outpace the greater social rewards. Take the 1994 Winter Olympics in Lillehammer: the games were 100 times more expensive than another tourism program Norway developed during that period, but the revenue gains were only twice as large. During that year's World Cup, U.S. host cities cumulatively lost upwards of $9.3 billion.
2) Underestimated Costs
Tragically awful cost estimates plague mega-projects around the world, and mega-events are especially bad offenders. Since 1960, the average cost overrun for an Olympics is 179 percent. That's the average! Fixed deadlines that must be met, contractor profiteering, large contingencies that lack local knowledge, and flagrant lying by public officials are just some of the reasons the balance sheet always winds up in the red after mega-events.
3) Displaced Urban Priorities
Mega-events tend to take precedent over existing development projects—a symptom that Müller calls "event takeover." Land or capital that might have gone to other projects are reserved for the mega-event itself. That's great for a few days or weeks during the festivities, but afterwards the locals are stuck with a building they don't need and a maintenance bill they can't pay. The Lviv airport has a capacity of 20,000 passengers a day from its time as a 2012 UEFA championship host; come 2013, it handled 10 percent of that capacity.
4) Huge Public Risk
Mega-events place huge demands on host cities in terms of cost and completion, and public officials accept those demands as part of their bid. This basic framework, writes Müller, all but ensures profiteering: "Contractors know that the government is obliged to finish the project regardless of price." All too often it's local taxpayers who end up on the hook for the difference. Contrary to private investment promises, the public paid more than 95 percent of the costs for the 2014 Winter Games and World Cup.
5) Special Treatment
In an effort to court mega-events, local officials often carve out legal exceptions regarding taxation, property rights—even freedom of speech. (Vancouver outlawed posters and signs that didn't celebrate the 2010 Olympics, for instance, and Boston banned city employees from criticizing the city's bid for the 2024 Games.) Often this special treatment costs cities money: tax exemptions cost Brazil an estimated $250 million in revenue during the 2014 World Cup.
6) Elite 'Capture'
While officials sell mega-events to the public on the basis of expected social benefits, it's a select group of business and real estate interests that reap most of the reward. Müller calls this symptom of the mega-event syndrome "elite capture." To make matters worse, once a bid is secured, officials often see public input as a barrier rather than a necessity. Here's the secretary general of FIFA speaking in 2013: “[L]ess democracy is sometimes better for organizing a World Cup.”
7) Quick Fixes
Sometimes a mega-event can motivate a city to complete a project that's been on the shelf for a long time. That can be a good thing—unless fast-tracking means that the project can circumvent the established planning process, as is often the case. So the event, rather than the social need, drives the funding discussion and project execution. "Mega-events thus become a wildcard, allowing cities to jump to the front of the queue for government support," writes Müller.
To his credit, Müller offers a dozen policy changes to ease the mega-event disease. Those falling in the "radical" camp—which don't feel radical so much as rational—include capping public expenditures, bargaining with governing bodies, and treating the events separately from urban development. More "incremental" changes include seeking lots of public participation, building temporary structures if the post-event use is uncertain, and adhering to regular planning processes.
Or we can just build Mega-Event Island and let the quarantine begin.