Protecting the State from Olympic Liability

In the budget debate this week, the Senate adopted an amendment offered by Senator Tarr which sets in place a clear boundary on state liability for the Olympics:

SECTION 105A. Notwithstanding any general or special law to the contrary, no agency as defined in section 14C of chapter 7 of the General Laws or other entity created by the general court shall expend any state funds, except for the purpose of analysis and due diligence, or incur any liability, indebtedness or obligation, by guaranty, indemnification agreement, bond undertaking or otherwise, for the purpose of procuring, hosting, aiding, facilitating, or remediating the effects of, hosting the Games of the XXXIII Olympiad in 2024 unless the general court enacts a special act authorizing the expenditure of state funds for such purposes following at least 1 public hearing conducted by the house and senate committees on ways and means acting individually or jointly. The committees may conduct more than 1 public hearing in geographically diverse locations within the commonwealth. Nothing in this section shall be interpreted to waive any other requirement for appropriation or approval in any law, rule or regulation.

The Boston 2024 group has said all along that they don’t want to use taxpayer funds or put the taxpayers at risk. However, many of us feel it is critical that we put in place clear legal protections so that we are not surprised. This amendment is a step in that direction, but it only applies to the state and it’s agencies. It does not address the possible liability of municipalities. The City of Boston needs to put its own clear protections in place.

If we tell the Olympics that they truly need to fund the project privately — that we won’t pick up their overruns — that will give us the best chance of getting a “sustainable” and financially responsible Olympics.

Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.

6 replies on “Protecting the State from Olympic Liability”

  1. I was very pleased with the Mayor’s statement on Keller @ Large that he would not accept any liability for overruns from the Olympics. If the City is able to negotiate safe language — language that is different form the standard IOC boilerplate that would put the City on the hook — then we may have a bid that we can support. If the IOC won’t bend on that and we lose the bid, so be it.

    1. Thanks, Harry, for the question. The results of both amendments are essentially the same if you read the language carefully. The one I supported had already been discussed and adopted before the second amendment came up. The second vote was really superfluous and there was no real reason to have it.

      The Hedlund amendment is not stronger. Arguably, it’s slightly weaker. The one I voted for does allow state agencies to expend funds for “analysis and due diligence” in investigating the Olympics — which we should all support. Other than that, there is no practical difference. In neither case can any state agency spend funds for any other purpose without further explicit legislative action. Even if the Hedlund language were adopted, it would not prevent a further legislative action.

      The full text of the Hedlund amendment appears below. Compare it to the first, which I voted for, above. The transportation language in the Hedlund amendment does not strengthen it. If it has any effect at all, it is to allow spending, not prohibit it.

      Providing for a Private Sector-Funded Olympics
      Messrs. Hedlund, Moore, Tarr, Ross, Fattman and Humason moved that the bill be amended by inserting the following section:-

      SECTION XX. (a) Notwithstanding any general or special law to the contrary, and except as provided in subsection (b), no state agency, authority, or other entity created by the General Court, shall expend any state funds, incur any liability, indebtedness or obligation, directly or indirectly, by guaranty, indemnification agreement, bond undertaking or otherwise to procure, host, aid, further or remediate the effects of, the 2024 Olympics.

      (b) Because efficient transportation is essential to the economy of the state, and because efficient transportation is essential to the success of the 2024 Olympics, nothing in this section shall prevent any state agency, authority, or other entity created by the General Court, from spending state funds, incurring liabilities and obligations, or entering into other agreements for the purpose of the repair, maintenance, construction and operation of the state’s transportation system including, without limitation, roads, bridges, tunnels, rail lines, buses, boats and other means of transportation, even if such expenditures may also facilitate procuring, hosting, aiding, furthering, or remediating the effects of, the 2024 Olympics.

      (c) Nothing in this section shall prohibit any state agency, authority, or other entity created by the General Court, from expending the proceeds of, or servicing the debt created by, bonds authorized and issued, or performing contracts entered into, before the effective date of this section, even if they relate to procuring, hosting, aiding, furthering or remediating the effects of the 2024 Olympics.

      (d) The term “authority,” as used in this section, shall have the meaning given to it in section 39 of chapter 3 of the General Laws.

  2. I want to add a different perspective.

    London had the summer Olympics . Lots of money was put into London. One example: Oxford Circus is a great shopping area. I was there in October and did not recognize any of the shopping district from my last trip a few years before the London Olympics . Frankly, I was so lost. I needed someone to point the way to the stores. As one vendor told me, “Millions of pounds were spent by the stores to spruce up the area.” Like any good shopper, after a while I adjusted and visited the stores.

    With all the talk of the Olympic bid, Boston and environs will be altered. Whether it is a good thing or bad thing will be the test after the Games.

    I remember when Government Center was finished. My Dad had a store and he was forced out to a new location. We call construction renewal. There will be a lot of “sprucing up” for the visitors.

    We are a vibrant city. Today I read in the Boston Globe, a destination city. After the Olympics, there is a great opportunity to have an renewed city.

    Is it worth a shot to go after the games? For me, I think so. Why do I have a doubt? Every new venture brings anxiety and change. Is that what we want? I look forward to the vote.

  3. Will, I am pasting comments from the online edition of today’s Boston Globe written by Tariam in response to Steve Pagliuca’s new appointment. I believe this is a very comprehensive list of many of the reasons Boston 2024 is an awful idea. Please review. If you can get these questions answered, the madness will stop soon.

    1) Finances. We don’t believe the numbers. The costs are low and we are suspicious about the promised income. We really need a breakdown and an explanation of how they arrived at their numbers. This is the first, and biggest of our concerns. We don’t want Boston to labor under a multi-billion dollar debt that could drag on for decades. There are many things the city needs and carrying a huge amount of debt will be an obstacle to resolving other problems. The MBTA is already spending money that should be used for expansion and improvements to pay their employees. The debt they are carrying is swamping their system. We don’t want the city and the commonwealth to face similar problems.

    2) Transportation. We just had a total transportation failure. Work is needed to make sure we can get to work and get home again. We don’t want attention diverted from a crucial, everyday problem that affects thousands of people every day in order to provide transportation for a three-week party. We need switch plate covers, not superstations. The cost of the transportation needs the committee has listed is more than enough to bankrupt the city. They’ve also managed to add “buy all new buses” to the list of things the MBTA needs to do. And despite what it says in the bid documents, being “accustomed” to construction delays and backups does not imply acceptance. A more accurate term for what went on during the Big Dig would be “endured without killing each other”. Also, have the committee members ever used the T? Do they really think the T can transport all those spectators? Have they ever tried to explain to visitors how to get around by the T?

    3) Ownership. In the bid documents the committee said that they had contacted all the owners of the land that will be needed for the stadium, Athlete’s Village, the media centers, the natatorium, and velodrome, and they were all on board with the plans. Immediately, most of the private owners said that, actually, there had not been any agreement, in fact there hadn’t been any conversation, and a lot of them said they weren’t interested in selling because they had their own plans for that area. So, obviously, the committee lied. I don’t know if they lied to themselves, but they definitely lied to USOC. The Fort Point area already has land use approvals. The mayor has said he is not going to seize the land through eminent domain. Does the committee have working plans to use other areas?

    4) Public parks. I haven’t heard anyone screaming about using Long Island, Castle Island, Moakley Park and Magazine Beach, (other than the suspicion that Long Island was closed and the residents pitched out in order to remove the homeless from it) so I’m willing to accept that those venues are acceptable. But Boston Common and Franklin Park are beloved by their users, and wrecking them for a couple of events is not the kind of help they need. Boston Common should have been taken off the list of venues as soon as the screaming started. Replanting fifty trees and announcing that this is restoring it is nonsense.

    5) Security. I realize that this is a cost that will be borne at the Federal level, but during the Democratic Convention the Secret Service insisted that North Station be closed because it was too close to the Garden. The Secret Service will also be in charge of security for the Olympics. The Garden is listed for Gymnastics and the Basketball finals, and Basketball for the Paralympics. Are they going to close North Station again? What kind of impact will that have on roadways?

    6) Additional venues. They have the Garden listed for the Basketball Finals. They don’t list any venue for the preliminaries. If the preliminaries are going to be in Springfield, then shouldn’t they have listed it? Just to show they’ve done some of their homework? In addition, they have Nahant listed as an alternative to the Common for Beach Volleyball. I have to assume they’ve never tried to transport hundreds of people to Nahant. There are days when getting one person to Nahant is a nightmare.

    7) Advertising. Will Boston and the Commonwealth have to remove thousands of advertisements for a month? What will that cost? The T gets a lot of money from advertisements. Will they have to take a steep loss because of that? (And, as someone asked, will we have to cover up the CITGO tanks?) Is it even constitutional to forbid all advertising?

    8) Future tourism. There’s an assumption that many people who don’t live in Boston will watch the Olympics, see all the pretty pictures of Boston at its best, and will decide to visit. But we already get a lot of tourists. Do we need the Olympics to bring in more? Ten years down the road will we still be seeing positive results from having the Olympics?

    9) Rising sea levels and climate change: Boston is already ranked 4th in the US and 8th in the world for potential financial losses from climate change damage because so many of our physical assets are built on filled land at or near sea-level. Most of Boston 2024’s proposed sites — including the Olympic Stadium and Olympic village — are in that category, not to mention other highly vulnerable sites like Fort Point Channel, Moakley Park and Magazine Beach, and many of our region’s transportation nodes in Boston are below sea level (think tunnels, the T, etc.). The level of Boston Harbor is rising about 3 inches a decade now (10 inches over the past century). Boston 2024’s plans will just add to Greater Boston’s vulnerability while consuming time, attention and resources that should be focused on our current and future risk — by 2100, the equivalent of a “100 year storm” on every high tide.

    9a) It will be hurricane season. Are there any plans in place in case we get clobbered during the Games?

    10) In past Olympics studies have shown that the regular tourists stay home, and only the people with tickets come visit. That means that normal tourist destinations will not see their regular influx. Places like the MFA, the Swan Boats, Duck Boats etc. will be operating at a major loss. Has the committee come up with any ideas to alleviate this concern?

    11) A similar question has risen in regard to charities. Money that would normally be sent to various causes might be diverted to the Olympic Games. Has the committee given any thought to this problem?

    12) The entire plan is based on the assumption that the US Post Office will move out of its South Station building in time for train tracks to be laid and South Station to undergo another overhaul. It also depends on getting all those vendors out of Widett Circle, the MBTA to change over to electric buses, and the convention center extension to be finished. Has the committee given any thought to what they might do if one or more of these events doesn’t happen?

    13. The taxpayer commitment to cover the costs of the Olympics is going to be a huge weight around the city’s neck, and could mean the reduction or elimination of core governmental services, such as police, fire, public works, school system and so on. What will these cutbacks cost us? Which is better for the long-term financial health of Massachusetts and Boston: the Olympics or good schools?

    14. There is concern regarding the displacement of potentially thousands of residents, many on fixed incomes and also many students, with no place to go, just before the academic year begins, in order to provide housing for potential visitors. This comes from the call for landlords to write shortened leases for rental housing in order to accommodate Olympics visitors. Associated with this is a notion that Boston 2024 would set up a housing bureau and would control rents, even though rent control, unfortunately, is no longer legal, to the best of my knowledge.

    15. The plans for after-Olympics look grim. Areas of the city will “suddenly” become available for development, even though plans were already in place. One of the men most responsible for the Boston Bid runs a giant construction firm. Another is an architect. Without casting any stones, there is a great deal of curiosity as to just who will get to develop that land. The plans for the Fort Point area were worked out over a period of years with input from residents and developers. These plans are being tossed aside in favor of the media centers. Afterward, who knows? But it seems unlikely that the plans that were so carefully made will be used.

    16. Indicative of its overall contempt of the interests of the general public in practice, Boston 2024 has, so far, completely refused to acknowledge the completely unacceptable, most notorious of its plans to remove much of the Boston Common from public use. The plan has been to destroy dozens of trees that have taken decades to grow, in order to accommodate a couple of weeks of beach volleyball.

    17. Infrastructure costs. Boston 2024, USOC, and the IOC will demand certain upgrades and additions to the T, some roads, and so on. Some of these plans are already funded, but most are not. This will force Boston and the commonwealth to take on additional billions of dollars in spending above and beyond the overrun costs. What items from its budget will Boston be forced to drop in order to pay for all this?

    18. What part will Boston Redevelopment Authority play? Are they prepared to seize land by eminent domain? How will they decide who will be granted development rights after the games are gone? We know that Mayor Walsh said he would not seize land, but he can allow BRA to do so and still keep his hands clean. How will BRA decide what a fair price would be? Is Boston 2024 prepared to offer additional funds to companies that are uprooted and wrecked by the move?

    19. Has Boston 2024 given any thought to having an outside group of consultants look at the numbers? Having a set of neutral eyes on the finances might help a great deal in preparing the bid and calming taxpayer concerns.

    1. Picking up on your last point, I believe that by insisting on limiting state and local liability, we will force Boston 2024 to engage with truly neutral private parties with the competence to evaluate their plans. Limiting public liability will force them to seek private guarantees to satisfy the IOC on deliverability concerns. The deep pockets capable of offering those guarantees will, in turn, force Boston 2024 to be very real about their numbers.

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