The governor's office today released the Brattle Group report on financial implications of holding the 2024 Olympics here. And what the Brattle Group found was that Boston 2024 dramatically underestimated the costs of certain facilities and that the much vaunted "deadline" effect for forcing infrastructure improvements could have meant even higher costs as contractors demanded extra payments to build everything on time.
It is our understanding that the Olympic Stadium would have been the largest such temporary stadium, making it difficult to evaluate the cost estimate that was in Bid 2.0. Similarly, Bid 2.0 had not fully developed its proposals for the Aquatics Center, the Velodrome, or the media center to allow a proper evaluation of the cost. However, past experience suggests that Boston 2024 would have been unlikely to meet those cost estimates, and a more reasonable cost estimate would have been over $970 million higher than reported in Bid 2.0. In addition, the contingencies included in Bid 2.0 are considerably lower than those typically used in the construction industry for projects at such an early stage of development. If Boston 2024 had used a more typical contingency, its projected cost would have been at least $100 million higher.
That would have more than wiped out the $100-million+ surplus Boston 2024 was projecting from ticket sales, sponsorships and the like.
Many of Boston 2024's infrastructure improvements included projects the state has yet to map out - such as bolstering the T's power and signal systems to handle all the extra trains required to meet the Olympic demand for the three-week games. Just those signal and power improvements would have cost upwards of $1.3 billion - money the state had yet to commit to - Brattle said.
Bid 2.0 appeared to assume that the projects could have been completed in time for the Olympic Games; an accelerated timetable may have driven the costs higher than estimated because of such factors as increased overtime and prices for materials. Even if cost were not an issue, the projects would still have required attention from MassDOT, which could have displaced other priorities.