Review underscores financial risks in Boston 2024’s planning

Another leg of the Boston 2024 post-mortem has been rolled out with the release Tuesday of an analysis that details the risks of expecting private developers to pay for significant construction as part of the Olympics effort.

The analysis by the Brattle Group, which was asked to find financial weak spots in the Olympics proposal, said that several possible outcomes would have had devastating consequences for the budget, riding roughshod over an optimistic financial plan.

“Even though the bid was withdrawn, this report demonstrates that there were a series of real risks associated with bringing the games to Massachusetts,” said state Senate President Stan Rosenberg in a joint statement with Gov. Charlie Baker and House Speaker Robert DeLeo.

Securing private developers accounted for the “biggest sources of risk” in Bid 2.0., the report stated. Projections may have underestimated the costs associated with the Games, as well as courted uncertainty by betting the bid’s success on projected revenue.

The Athletes’ Village proposed for Columbia Point suffered from the same flaws as the general plan, as laid out in the report. Intended as a catalyst for the improving the area post-Games, the village was expected to transition into mixed-income housing. But this rested upon developer commitment, and organizers expected to privately fund $2.9 billion of development in Columbia Point.

Although the properties were projected to produce sufficient revenue through later use, developers could not be sure of an adequate return on their investment, the report said. Boston 2024 also assumed that securing tax designations and property-owner approval would go smoothly, an assumption the report found was tied to uncertain cost and revenue projections and not a guarantee.

Reconfiguring nearby Kosciuszko Circle was the largest road improvement tied to the bid, with the cost put at anywhere from $120 million to $220 million. Like the Athletes’ Village, Boston 2024 considered the rotary a catalytic development project, and one that was necessary even without the Games.

Still, budget concerns for this project were substantial, the report noted. The plan lacked sufficient detail to accurately assess for either risk impact or general effectiveness at meeting Olympic requirements. On top of that, the cost estimates were considered in the report to be conservative, perhaps actually reaching $240 million.

MassDOT predicted that completing the project on time would likely have exceeded that estimate, according to the report.

JFK/UMass station was also up for a remodel in the 2024 plan, with a new bus platform and new passenger waiting areas and canopies, all estimated to cost $60 million. In what appears to be a consistent problem, the report noted, proposed upgrades “would have been insufficient to provide the full benefits,” possibly costing another $40-$50 million for code compliance.


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