Santa Monica Next, like many media outlets, has long-assumed that Santa Monica will host the beach volleyball tournament in the 2028 Olympics. However, the city’s plans for 2028 seem uncertain as the Council balked at a proposal (City Council Agenda, Item 7a) put forward by the L.A. 2028 Olympic Committee (LA 2028) because it was overly restrictive in limits put on what events the city could hold, too costly for the city to bear the financial burden, and still somehow vague as far as what support and benefits the city would see.
After over an hour of presentation and discussion, the Council instructed staff to renegotiate with LA 2028 and signaled it would not move forward with the current proposal if many areas, mostly to do with finances and the potential benefits to local businesses, were not worked out. Earlier in the evening, LA 2028 had urged the city to accept the agreement without continuing negotiations because of what a great honor it is to host the event.
“It would be fiscally prudent to demand that we go back and renegotiate,” testified Councilmember Oscar de la Torre at the end of the discussion. “We want to be a great host, this is the best place to host beach volleyball…but we need some assurances.”
One concern is that if the 2028 Olympics do not turn a profit, then the city will not see any reimbursement for its costs. If the event is a success, there is no timeline on when the city will recoup its expenditures.
How does the city justify adding these expenses to the city’s budget, especially when later in the night it would debate whether or not to spend potential new revenue to fix the city’s aging infrastructure or hire new police officers?
Councilmember Caroline Torosis ticked off a list of things the city has not been able to do with its current budget (return library to pre-COVID hours, maintain streets and trees, etc…)before noting how often the Olympics runs over budget. A study done by Oxford University after the 2024 Olympics shows that the last three Olympic Games have run 185% over budget. A similar study done after the 2020 games compared the cost of the Olympics to a “deep disaster.”
City staff and consultants hired by the city to examine the fiscal impact of the proposal created a dire picture of the potential cost of the games for the city.
A fiscal impact study conducted by HR&A Advisors projects that if the City opts to host beach volleyball, it could lead to the Olympics causing the city to lose money instead of bringing in additional money during the course of the games.
Added revenue from tourism associated with the Olympics coming to the region would be a boon for the city, according to the report. The Olympics coming to Los Angeles will bring $10.65 million in fiscal benefits from hotel taxes, sales taxes and other fees. And that’s just if the games come to the region. If the city hosts the beach volleyball tournament, the city could earn another $2.78 million in revenue.
However, the impact study forecasts that the City would be responsible for $15.54 million in estimated costs to prepare for and host the Olympic Beach Volleyball tournament. The additional security, lost revenue from closed parking lots, and other expenses would more than erase the fiscal benefits. The Olympics would actually cost Santa Monica $1.45 million more than it would bring in.
So the question the Council faced…is the “free publicity” worth the $12.1 million the city will lose out on to host an Olympic Beach Volleyball Tournament. If not, what guarantees can the LA 2028 make to the city so it gets a better deal.
“The main takeaway for me is that there will be programs and services traded off if the city is to take on this financial liability,” testified Oscar Santiago, the city’s director of finance.
A representative of the LA 2028 committee testified earlier in the evening to encourage the Council to approve the agreement, but was unavailable for questions from the Council. This was a shame, because there were many, many, questions that Councilmember had about the proposal that were unanswered including:
- Will the Pier be closed?
- Does the city have to close beach parking lots for public use?
- When will the city be allowed to sell officially licensed merchandise?
- The relationship between LA 2028 and Santa Monica should be similar to the one with Paris 2024 and Versailles. There was a subsidy provided by Versailles. Will there be a similar agreement for Santa Monica?
- Is there a plan for the federal government to provide a subsidy beyond the homeland security subsidy?
- Who is responsible to pay for enforcement of ordinances on issues like price gouging in the short-term rental market or trademark infringement?
- Will sales of merchandise come back to the City if the merchandise is sold in the city, or will it go to the host city, Los Angeles?
- Will LA 2028 ever provide a chance to answer questions from the community?
- Why is LA 2028 unwilling to answer questions from the City Council?
- How do local businesses get IOC approval to host Olympics themed events?
- If the Pier remains opened, who pays for increased security that would be needed?
- If the Pier is closed, who bears the cost of all of the lost business revenue to the pier businesses who rent from the city?
- Assuming that people use their cars to access the venues, regardless of what the marketing around a car-free Olympics is, what mitigation can be offered to the people that live along the PCH?
The status of the Pier for the events is a crucial one. If the Pier has to be closed for security reasons, restaurants on the Pier wouldn’t just be losing out on an opportunity to cash-in on the Olympics, but also on at least two weeks of tourism during the busiest time of the year.
By signing the agreement, the city also agrees to not host any events with Olympics branding that could compete with LA 2028 events. This could be another fiscal loser for the city, and could even damage private business’ attempts to make money during the events.
By comparison, the City of West Hollywood will NOT be hosting any official Olympic events but is already planning a cultural festival to celebrate LGBTQ+ Culture and the “Pride House” where resources will be made available to LGBTQ+ athletes. Without an “official” deal with LA 2028 or the International Olympic Committee, West Hollywood will raise its profile and increase its coffers because of increased regional tourism.
The “official” deal has no such guarantees that Santa Monica will be able to do similar marketing should the city move forward.
“At a fundamental level, we’re all very excited about hosting Beach Volleyball in our community,” stated Councilmember Gleam Davis. “Our concerns come from a place of concern for our community.”
“Contracts are designed to provide some level of assurance to the parties, not create uncertainty…I want to give direction to staff to work with LA 2028 to bring beach volleyball to Santa Monica.”
