Losing Bids, Winning Legacies: An Examination of the Need to Plan for Olympic Legacies Prior to the Bidding

Guy Masterman Losing Bids, Winning Legacies: An Examination of the Need to Plan for Olympic Legacies Prior to the Bidding Guy Masterman United Kingdom Whilst the concept of bidding for major sports events, and subsequently losing, but still achieving physical legacies to then use as a catalyst for the achievement of socio-cultural legacies, in other words aiming to strategically benefit just by bidding, is new, it has arisen because of the escalating costs it takes simply to enter the bidding race. When only one bidding city can win and yet all have to spend heavily in order to promote their candidature, the risks are clearly high. Whilst this is clearly an issue for host cities it is also a concern for rights owners, governing bodies and critically the IOC - when the risk might prove to be too much to bear for cities that consider Olympic hosting, clearly the future threat is fewer bidding cities. Aiming for winning legacies from losing bids might provide a solution. This paper looks at several cities and research undertaken in Manchester and New York in particular. Introduction Whilst Grenoble, Montreal and Sydney are a number of high profile cases of white elephants and clear examples of deficiencies in Olympic planning there are a number of examples of cities that have won the right to host an event and then gone on and planned to benefit in the longer-term with successful physical legacies. Tokyo, Calgary, Sapporo and Atlanta are all examples where positive legacies prevail. However, there are fewer examples of cities that have strategically planned for such prior to any decision to go ahead and bid/stage an event. Barcelona, Munich and Athens have all strategically set objectives and used their event to fast-track 1 urban regeneration and development to varying degrees in order to achieve physical legacies, but just how strategic this planning was prior to bidding is not clear. Bidding for a major sports event is expensive and not winning is clearly a considered risk. It is in fact both a short and long-term risk for bidding cities as well as the rights owners involved. A bidding city that does not win, loses its investment in making the bid and may only see that as a longer-term investment if a future bid is made that is then successful. It is clear that if there is a risk in losing, then a bidding city has to have the capacity to write-off any embedded costs if and when it does lose. The cost of bidding is also escalating and from the IOC s perspective this should also be of long-term concern because if bidding becomes unattractive due to embedded costs being too high, it might reasonably be assumed that fewer cities will be prepared to bid in the future leaving only a relatively small number of the world s major cities with the capacity to stage these spectacles. It is worth noting for example that out of the final five that bid for 2012, four were major capitals (London, Madrid, Moscow

172 Guy Masterman and Paris) with the other also a major international financial centre (New York). The IOC has recognised this threat: The Games have reached a critical size which may put their future success at risk if the size continues to increase. Steps must be undertaken and serious consideration given to effectively manage future growth, while at the same time preserving the attractiveness of the Games. If unchecked, the current growth of the Games could discourage many cities from bidding to host the Games. 2 In addition, the IOC also considers the inclusion of any intended legacy benefits in the form of facilities as critical and gives increased consideration to designs that provide for successful post-event use of the facilities. 3 Whilst there is evidence of implementation of early strategies in event planning by some bidding cities, it is less clear that it is being implemented at the right time in the planning process. Take Torino for example. Anecdotally, the winning host for the 2006 Winter Olympics is said to have not expected to win its bid. In addition, the design and therefore the after-use of its ice sports stadia were not considered until after the city had been awarded the Games. Proactively the IOC demonstrated its relatively new found responsibility as an advocator of legacies by advising the city, a year after it had won the bid, to consider leaving a legacy for ice sports in a city that at the time did not have any. By 2001 Torino was still regarded as having not considered its potential legacies early enough. 4 The concept of bidding, losing and then still achieving physical legacies, in other words aiming to strategically gain legacies just by bidding, is relatively new. Up until now there have been few cases of cities that have strategized in order to benefit from their bid whatever the outcome, and indeed ensuring that there is a return on investment when the bid is lost. A key question is whether did expect to gain just from the bid? The argument for having strategies for the achievement of physical legacies is two-fold. If an event can only make an unacceptable financial loss, a decision to bid and then host the event may rest on a longer-term perspective and a return on investment through tangible physical legacies. Secondly, if an event is used as a catalyst for the development of the economy and other less tangible benefits to society, culture and sport then the inclusion of physical legacies widens the potential for a return on investment. Losing Bids Winning legacies? An alternative bidding approach that takes a long-term perspective is one way to try and reduce the risks involved and also gain public confidence failing, and then bidding again for example. Several pieces of research have identified that prior experience of the bidding process is considered an important factor in winning a future bid for either the same or other events. Emery s research identified that from his sample there was an unwritten rule that was frequently mentioned by respondents and that was that there was a belief that an initial bid should be used as a pre-requisite to develop important relationships (and experience) to give future event bids more chance of winning. 5 In particular this can come down to the individuals that are involved. For example, Australia used the same key executives in its attempts to win the 2000 Olympic Games. 6 A long-term view here sees the achievement of objectives as possibly requiring a number of bid attempts. Manchester, for example, had three consecutive bids, for the 1996 and 2000 Olympics and then the 2002 Commonwealth Games before it could implement its plans to regenerate the east side of the city. Paris too has bid for and lost three Olympic bids (2 nd for 1992, 3 rd for 2004 and 2 nd again for 2012) and whilst it has not won an Olympics recently it has gone on to stage many other international

Losing Bids, Winning Legacies 173 events. 7 This process can be described as being cyclical or continuous. 8 Arguably the experience of other cities that is then utilised to assist other cities is important in this process. See Table 1 showing previous bidding history for each of the Olympic hosts from 2000 as well as from other cities from their respective countries. There are other similar examples. Brisbane bid for the 1992 Olympics and lost, however the bid is claimed to have focused the city on bidding for other events and in 2001 they staged the Goodwill Games. Having lost its bid for the 1996 Olympics, Athens duly bid for and won the 1997 World Athletics Championships and only days after that event was selected as the host for the 2004 Olympics. 9 Moscow used its 2012 bid experience to bid for the Youth Olympic Games and Rio de Janeiro has bid for the 2016 Olympics following its non-shortlisted bid experiences for the 2004 and 2102 games. Host Table 1: ent Successful Olympic Bidding Cities Sochi 2014 London 2012 Vancouver 2010 Beijing 2008 2000 (2 nd ) Turin 2006 Athens 2004 1996 (2 nd ) Previous Bidding History Nil Moscow 2012 (5 th ), St Petersburg 2004 (1 st round) Nil Birmingham 1992 (5 th ), Manchester 1996 (4 th ), 2000 (3 rd ) Nil Toronto 2008 (2 nd ), 1996 (2nd), Quebec 2002 (4 th ), Calgary 1988 (Host) Nil Rome 2004 (2 nd ), Aosta 1998 (5 th ), Cortina 1992 (5 th ), 1988 (3r d ) Salt Lake 2002 1998 (2 nd ) Anchorage 1994 (3 rd ), 1992 (6 th ) Sydney 2000 Nil Melbourne 1996 (4 th ), Brisbane 1992 (4 th ) Source: adatped from, http://www.gamesbids.com There are clearly examples of strategic long-term planning and more generally across the sports event industry with perhaps best practice to pass on. Research undertaken by Alderslade (ibid) for example cites the thoughts of several executives from US event organisations that have been involved in bidding for major international sports events. Those working for the 2012 Florida Olympic bid that failed at the national round of bidding highlighted the importance of the legacy component at the bidding stage for both winning and losing with the message that a bidding community can go on to benefit from the relationships after a failed bid because there is potential for future growth. Respondents from the three other US cities that lost at the same national round of bidding, Tampa, Cincinnati and Dallas, are reported to agree and for the latter it is claimed that the city was still able to gain a legacy from the profile it gained despite its early elimination. A longer-term perspective when it comes to assessing the merits of a failed bid indicate that there can be a return on the investment. In other words the experience and relationships that have been acquired are the legacy that can be exploited in order to produce a more improved bid next time. However, what the examples above do not identify is whether or not there might also be legacies in the form of physical facilities, win or loss, and whether they might then be featured in future bids. There are examples of cities that have gained physical legacies as a result of bidding and losing. Manchester for example was intent on following its event-led strategy of regeneration of its east side and despite not succeeding with either of its bids for the 1996 and 2000 Olympics it still built its strategically important facilities, the aquatics pool, Sport City and the City of Manchester Stadium. Of course it did require another event as the catalyst, the 2002 Commonwealth Games. Otherwise the fast-tracked infrastructure and stadia may or may not have been built until a later and undeterminable point in time. The evidence here suggests that Manchester gained legacies from its earlier planning but it appears that the legacies came out of the plans retrospectively. The key question now is whether cities strategically set out to provide physical legacies whether they win or lose?

174 Guy Masterman Athens plans for the new facilities it built for its 2004 Games were actually part of a wider and 30- year old strategy to develop its Faleron Bay area. This area in Athens had been a municipal regeneration objective since the 1960s and formed the basis of the Athens proposals for their candidature for the 1996 and 2004 Olympic Games and as such is an example of an event being used as a catalyst for urban objectives. Having been awarded the 2004 Games the city used the event in order to fast-track a number of new facilities that were desired long before they intended on bidding for either Games. The Water Plaza and Esplanade for example were intended to house a tourist attraction exhibition on the bay, the nautical sports complex to be used by clubs, scouts and fishermen, and the beach volleyball arena was to be turned into an open-air amphitheatre. 10 The event after-use of these facilities was pre-determined and demonstrates that the city, despite its now dormant sites, at least attempted to plan its long-term legacies prior to its bid. It would appear that the quality of this planning for after-use was inferior because as early as March 2005 post-olympic use was still to be determined for the rowing lake for example, the marathon route was in disrepair and unused, and the Olympic village required extensive refitting before it could be suitable for residential housing and passing on to commercial operators. 11 Manchester demonstrated a strategic approach. The city failed in its bid to host the 1996 Olympics and then as stated earlier, on also failing with its bid for the 2000 Olympics in the bidding contest in 1993 the city bid for the Commonwealth Games in the same year. Manchester considered the achievement of the objectives to be more important than the events that were used as the vehicles to achieve them. So long as the objectives could be delivered it actually did not matter whether it was an Olympics or a Commonwealth Games that delivered them. The city s 2000 Olympic bid document for example reveals a long-term capital investment programme for the refurbishment of the city and a 7year plan, from 1993 to 2000, existed for the investment of $200 million U.S. 12 This included supporting infrastructure such as implementing a second phase of development for the metro transport system that would include links through to the newly planned Olympic Centre in East Manchester, 13 links that would be of benefit in the long-term. With the building of Sportcity in this same location, it is clear that both the Commonwealth Games, and the 2000 Olympic Games before, were intended as catalysts for redevelopment and a specific strategy for municipal regeneration for the city as Howard Bernstein, chief executive of Manchester City Council recalls: The sporting and cultural events are at the heart of our regeneration strategy. The vibrancy of the city centre is a fundamental part of our overall growth plan for Manchester as a whole I think the Sportcity complex is an obvious manifestation of how we have used sport to actually drive a wider regeneration process in East Manchester. 14 The city wanted this redevelopment so that it could deliver long-term jobs and economic impact and the strategy they believed would deliver that was focused on the building of sports facilities. Just as in Athens, it was the physical facilities that were a part of a wider plan that included the redevelopment of the city centre, and other facilities such as the Bridgewater Hall, Urbis, and the city art gallery (ibid). The stadium and the Sportcity complex, the aquatics centre and the other facilities that were also built had always been objectives but when the Olympics bids failed the Commonwealth Games were seen as the next best opportunity to achieve them. The public funding received by the city made the building of the facilities possible might not have been achieved any other way (ibid). In this way failed bids can be sources of stimulated interest and almost seen as showcases that demonstrate the opportunities possible for urban regeneration. 15 There are more recent examples of strategic bidding for long-term success whatever the outcome. For example, Toronto bid for and lost both the 1996 and 2008 Olympics but it is claimed that it has gained from these bids not least with new physical structures. The city clearly used its bids as a cata-

Losing Bids, Winning Legacies 175 lyst for development that was not dependent on whether the bids were successful. In fact many of the city s bid-generated plans to develop its largely underused waterfront are still being implemented and will continue to be so until 2020 at a cost of over CD$12billion. Chicago, a bidder for the 2016 Olympic Games, has claimed that it intends to benefit from its bid whatever the outcome. By involving civic organisations as funding partners to support the bid it intends to use the bidding process to build further investment for increased employment and housing. Its mayor, Robert Daley, declared that the city intended to gain a positive legacy out of the bid process. 16 In contrast with the London 2012 Olympic bid, an analysis of New York s bid for the same Games, shows that the US city was prepared to benefit from its bid, win or lose. Both cities provided details on how they would be providing social, cultural, economic and sports legacies as is required in an Olympic bid book, however in comparison, their plans for the infrastructure and physical building of facilities for long-term use were quite different. The IOC does not require that a host city build new facilities and consequently does not require that there are always physical legacies of any sort. However, it recognises its need to protect against the prospect of white elephants and therefore does require that if facilities and infrastructure are to be built, then long-term after-use plans should be in place. 17 This now means that a bidding city can be judged on the legacy planning it provides in a bid book. Despite that, it can be seen that London was quite ambiguous in its plans for after-use and was clearly only planning to build new sports facilities if it won. Its lack of pre-bid long-term planning is clear to see when today LOCOG still chases an after-user for its new Olympic stadium. New York on the other hand was looking to provide physical legacies win or lose. Early strategic planning was undertaken that secured after-use and user prior to the bid. Its issues over its preferred new main Olympic stadium aside, according to the NYC2012 Director of Planning, every single one of its planned permanent sports venues at the time of the bid (November 2004) not only had its afteruse determined but also had its after-use management and operators nominated and in place. 18 In addition there was a firm statement by the city that every proposed Olympic venue has a detailed post-use plan, and the bid itself stated that a New York Olympic would be set up to help maintain facilities in the long-term. Even more importantly, every single one of its planned new sports facilities, apart from a bridge that was a part of the rowing lakes development, was to be built whether the city won the bid or not. 19 Indeed the city at the time of its bid had already started investing in new sports facilities to meet a growing revival of Olympic sports in the city. For example, an outdoor athletics complex, a pool and an 18,000-seat multi-sport arena, all part of the 2012 bid provision, were already underway in 2004. 20 The city was clearly not prepared to waste the opportunity of driving forward its city plan via a strategy that would see new sports facilities as anchors for revitalised neighbourhoods that would then act as catalysts themselves for development in office space, housing and parkland (ibid). The city s Olympic Legacy Plan was quite clear in identifying after-use and users and also in the liquidity in the plans for the longer term (see Table 2 ). 21 A point of clarification is required at this point and it concerns the importance of the role a bid plays in the plans for the building of facilities that would appear to be already planned. Efficient planning for example will make use of any existing and acceptable facilities and those that it has already planned to build in their bids. In effect this means after-use and after-users are generally covered as the buildings will already be operable. Madrid for example, in its 2012 bid, highlighted the use of the Palaccio de Deportes de Felippe II Sports Hall as its handball competition venue. Whilst the facility was opened after the city s bid had been submitted in November 2004, construction had begun some four years earlier. 22 Madrid s intention to use a multi-use facility that it knew would be in place at the time of staging the Games was merely an efficient approach.

176 Guy Masterman Table 2: NYC2012 Legacy Plan Venue Uuse/Post-Games Funding Venue Games Use Post Games Use Venue Owner Post Games Funding 369th Regiment Olympic Arena Bronx Velodrome Brooklyn Olympic Arena Gateway Park Olympic Marina Greenbelt Equestrian Center Olympic Aquatic Center, Williamsburg Olympic Water Polo Center. Flushing Olympic Archery Field, Flushing Olympic Regatta Center, Flushing Olympic Shooting Cente, Pelham Bay Park Olympic Stadium, Manhattan? Olympic Whitewater Center, Flushing Staten Island Olympic Cycling Center Icahn Stadium Randall s Island Competition Site Boxing Badminton Cycling Multi-sport arena Multi-sport arena NY State Dept of Military NY City Dept of Small Business Services NY State Dept of Military NY City Dept of Small Business Services Gymnastics Multi-Sport arena Brooklyn Arena LLC Brooklyn Arena LLC Sailing Equestrian Aquatics Water Polo Aquatics Water Polo Archery Rowing Canoe/Kayak Shooting Athletics Football Canoe/Kayak Cycling BMX Mountain Biking Olympic training site (various) Olympic training site (various) Permanent Marina Permanent Equestrian Center City Park with swimming Permanent Pool City Park and Field Permanent Rowing/Kayak Lake NYPD Shooting Range Multi-Sport Stadia Permanent Canoe Center City Park and BMX/Mountain courses Multi-Sport Center Multi-Sport Center National Parks Service NYPD Jets Development LLC (NY Jets) National Parks Service NYPD Jets Development LLC (NY Jets) Source: NYC2012, Urban Transformation; http://www.nyc2012.com/index_flash.aspx A final point of interest is the impact a bid can have once in motion. London submitted its bid for the 2012 Olympics with two particular components of its intended Olympic Park clearly earmarked for after-use as required by the IOC. However, whilst the aquatics centre and the Velopark were going to be managed by the Lea Valley Regional Park Authority after the Games, they were, at the time of the bid, only to be built if the bid was won. Interestingly, the important role played by the bid is highlighted here because in early 2005 some three months after the bid had been submitted, the then Mayor of London, Ken Livingston, agreed to fund the 22million Velopark anyway. 23 The original city plan that included the regeneration of the Lea Valley was only to have included any anchoring sports venues if the city was successful with its 2012 bid, however it was after the bid that the city re-thought the focus for this development. Nevertheless, the and plans produced in preparation for the bid and research post its submittal may possibly have contributed to this change and in any case the bid had, albeit in retrospect, become a catalyst for long-term legacies, win or lose.

Losing Bids, Winning Legacies 177 The key questions for the contribution of further research in this area concern the nature of the planning that is required for there to be physical legacies from bidding. In particular at what stage in the event planning process should strategies be deployed? In the case of Manchester the physical legacies were the objectives and the events were the strategies. However, these were not achieved until a bid was eventually won. Toronto on the other hand lost two bids and strategically gained as a result of just bidding the result of integrating regeneration planning with its bidding. Chicago at least intends the same and in the case of New York it remains to be seen if all their promised legacies will be realised. Further research in this area will focus on the planning approach that is required for there to be successful legacies from bidding alone and also key factors such as the involvement of funding partners and how they might be galvanized via a bid. Summary There are some high profile cases of white elephants and therefore examples of deficiencies in planning, but there are also examples of cities that have won their bid and then gone on and planned to benefit in the longer-term from physical legacies. Unfortunately it is more difficult to find examples of cities that have strategically planned ahead of their decision to go ahead and bid/to stage an event. Of those that have, Manchester, Athens, and Barcelona too, have strategically set objectives, assessed feasibility and used events to fast-track their plans for urban regeneration that have included the building of new stadia and other sports venues. To various degrees they planned for physical legacies before they bid for their events albeit Manchester s success outshines Athens failure when the quality of the planning is compared. Bidding is an expensive process with costs escalating year on year and as there is only one winner, the risks are high. The potential threat for the future is fewer bidding cities. Despite this the concept of bidding, losing and then still achieving physical legacies is somewhat new. It is nevertheless a critical one and for the future of the Olympics and many other sports events the answer may lie in an approach that sees bidding as a means to an end. Endnotes 1 C. Michael Hall, Imaging, tourism and sports event fever, in Sport in the city: The role of sport in economic and social regeneration, eds. Chris Gratton and Ian Henry (London: Routledge, 2001), 166-183 2 Olympic Games Study Commission: Interim Report, 114th IOC Session, Mexico, (Lausanne: IOC, November 2002). 3 IOC, Host city election process; http://www.olympic.org/uk/organisation/mission/cities(accessed 13 March, 2002).; IOC, 2ndOlympic Games and Architecture Seminar; http://www.olympic.org/uk/news/index (accessed 24 April, 2002). 4 Gilbert Felli, Transfer of Knowledge, in Architecture and International sporting events: Future planning and development, (Lausanne, IOC, Documents of the Museum, June 2002), 121-127 5 Paul Emery, Bidding to host a major sports event: The local organising perspective, The International Journal of Public Sector Management 15, no 4 (2002), 316-335. 6 H. Westerbeek, P, Turner and L, Ingerson, Key success factors in bidding for hallmark sporting events, International Marketing Review 19, no. 3 (2002), 303-322. 7 Gamesbids.com, 2008; http://www.gamesbids.com/english/archives/past.shtml. 8 L. Ingerson and H. Westerbeek, Determining key success criteria for attracting hallmark sporting events, Pacific Tourism Review 3 (1999), 239-253.

178 9 J. Alderslade, Focus on sports facilities & conference centers: Olympic loss, economic win, Economic Development Now. International Economic Development Council (2001), 11 November, http://www.iedonline.org/ednow/ 11_15_01/page. 10 Avgi Marcopoulou, Thymio Papayannis and Stavros Christopoulos, Restoration and development of the Faleron Sea Front, Athens, Architecture and International sporting events: Future planning and development, (Lausanne, IOC, Documents of the Museum June 2002), 95-104. 11 D. Smith, Olympic venues turn commercial; http://ww.sportbusiness.com/news (accessed 31 March, 2005). 12 Olympic Bid Book 2000 Manchester, Finance, Section 19, Volume 3 (The British Olympic Bid: Manchester 2000, Department of the Environment). 13 Olympic Bid Book 2000 Manchester, Transport, Section 2, Volume 2. (The British Olympic Bid: Manchester 2000, Department of the Environment). 14 Interview with Howard Bernstein, Chief Executive of Manchester City Council, Manchester Town Hall, (28 June, 2002). 15 Stephen Essex and Brian Chalkley, Urban transformation from hosting the Olympic Games, University lecture on the Olympics, Centre d Estudis Olimpics, Univesitat Autonoma de Barcelona (2003); http://www.olympicstudies.uab.es/ lectures. 16 Multi-million dollar fund to support Chicago 2016 bid, SportsCity; http://www.sportbusiness/com/news/162831. 17 Legacies and Costs of the Olympic Games, Olympic Review (Lausanne: IOC, April 2005). 18 M. D. Gonzalez, Presentation of NYC 2012 Planning (New York University, 4 November, 2004). 19 ibid. 20 NYC2012, Bid Book 2012 Olympics, Candidate File; http://www.nyc2012.com/en/bid_book.html (New York: NYC2012 Inc, November 2004). 21 NYC2012, Urban Transformation, NYC2012; http://www.nyc2012.com/index_flash.aspx. 22 Madrid Olympic 2012 venue officially opened, Stadia; http://www.stadia.tv/archive/user/news_article. 23 London 2012 bid outcome will not affect Velopark construction, Stadia; http://www.stadia.tv/archive/user/ news_article.