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Burton Legislation Authorizes State to Sign Key Agreements and Creates Last-Resort Public Financial Guaranty
March 25, 2002—Sacramento, CA: California Governor Gray Davis gave critical backing to the San Francisco Bay Area's bid for the 2012 Olympic Games today by signing S.B. 1987, which authorizes the state to sign key agreements with the United States Olympic Committee (USOC) -- if the San Francisco Bay Area's bid is selected -- and creates a last-resort public guaranty which would only be tapped in the unlikely event that 2012 expenses exceeded Olympic revenues, a projected $500 million surplus and a $250 million private insurance guaranty. S.B.1987 was introduced by Senate President John Burton (D-San Francisco) and won overwhelming approval from members of both parties in the California Senate and Assembly last week.
"Governor Davis has given an enormous boost to the San Francisco Bay Area's bid and demonstrated his economic vision and leadership for the State of California," said Anne Cribbs, President & CEO of the Bay Area Sports Organizing Committee (BASOC) and 1960 Olympic swimmer. "This law provides tangible government support as a last resort but does nothing to change our absolute commitment to hosting a privately-financed, privately insured Olympic Games in 2012."
According to a study by Econ One Research, hosting the 2012 Olympic Games in the San Francisco Bay Area would generate $7.4 billion in economic activity for Northern California. Though the official Host City is San Francisco, the bid takes advantage of existing, outstanding athletic facilities throughout the Bay Area and will bring new housing, youth sports opportunities and permanent transportation, environmental, athletic facility and other improvements to the state and region. The USOC will select one candidate from among four U.S. finalists -- Houston, New York, San Francisco or Washington D.C. – in November 2002. The International Olympic Committee (IOC) will select the 2012 Host City in 2005.
The San Francisco Bay Area's bid proposes a privately-funded Olympic Games that will leave a surplus of at least $500 million, further backed by a $250 million private insurance guaranty to guard against revenue shortfalls. BASOC has developed extremely conservative budget and revenue plans for the 2012 Olympic Games that have received close scrutiny and approval from the City and County of San Francisco, which signed its own "joinder undertaking agreement" with the USOC in November, 2001. S.B. 1987 authorizes the state of California to sign a similar agreement, necessary as part of the bid process, and creates a last-resort state-backed guaranty – capped at $250 million – in the unlikely event that potential 2012 Olympic expenses exceeded revenues, a projected $500 surplus and $250 million private insurance guaranty. The guaranty requires no immediate appropriation from the state's general fund, and gives future legislatures maximum flexibility in fulfilling the state's potential – but extremely unlikely – obligations under the bill.
"We're incredibly grateful to Governor Davis, Senator Burton and our friends in the Legislature for this state-backed guaranty because it provides an added layer of last-resort financial protection and positions us to win," said Cribbs. "But we fully intend never to need or use California tax dollars to fund the Olympic Games."
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