Boston 2024

[Equilibria]

If the USOC sticks with Boston then it essentially confirms Baker expressed his support for the bid behind closed doors, and before getting results from the review he ordered (which has stated as recently as yesterday is vital to whether or not he supports the bid).

Politically, how can he get away with supporting the bid given the statements he has released?

The whole episode also gives a beautiful demonstration of how other Governors (and Mayors) can expect to be treated by the USOC. I'm no Baker fan, but he did lay out a timeline and a process for making a decision. The USOC is threw a snap ultimatum at him over the span of a weekend. If I were him, I might tell them no just to spite them, Boston 2024 be damned.

To get the things you otherwise wouldn't have had for decades (Blue and Orange Line extensions), centuries (North-South), or potentially ever (Mass Avenue subway). Irrational exuberance is all well and good, if - and only if - it results in something of appreciable value that we couldn't have had otherwise.

Otherwise, why spend $5 billion when you can spend $1 billion, or if you're counting the infrastructure expenses as all costs getting paid either way, $0?

$5B in private funds? Because having an Olympics is a good in itself. It's fun, and it builds civic pride. But we've been over this before.

 

[West]

Politically, how can he [Baker] get away with supporting the bid given the statements he has released?

I would be shocked if this one instance reveals him to be anything different than what we've so far seen that he is.

The whole episode also gives a beautiful demonstration of how other Governors (and Mayors) can expect to be treated by the USOC. I'm no Baker fan, but he did lay out a timeline and a process for making a decision. The USOC is threw a snap ultimatum at him over the span of a weekend.

Agreed. And I think the USOC has had enough time to observe Baker, and talk to either him or his staff, that they should be well aware of this aspect of his personality / governing style. And so I strongly suspect that their sudden hard deadline (sudden in public, anyhow) might very possibly - or even probably - have been set so as to get exactly the answer they know Baker is most likely to deliver: "still studying it". Which the USOC will grasp onto as their "out" to switch horses.

If this is true, it would be both pathetic and par for the long-run course by the USOC. And it really smells to me like what is going on. The USOC is an organization with an exceptionally inglorious history during my lifetime. This doesn’t excuse the many blunders by Boston 2024, but the USOC dug this hole for themselves, too, and it looks to me like they are trying to position Baker to be the blame taker. Won't work, in my opinion.

 

[Equilibria]

Agreed. And I think the USOC has had enough time to observe Baker, and talk to either him or his staff, that they should be well aware of this aspect of his personality / governing style. And so I strongly suspect that their sudden hard deadline (sudden in public, anyhow) might very possibly - or even probably - have been set so as to get exactly the answer they know Baker is most likely to deliver: "still studying it". Which the USOC will grasp onto as their "out" to switch horses.

If this is true, it would be both pathetic and par for the long-run course by the USOC. And it really smells to me like what is going on. The USOC is an organization with an exceptionally inglorious history during my lifetime. This doesn’t excuse the many blunders by Boston 2024, but the USOC dug this hole for themselves, too, and it looks to me like they are trying to position Baker to be the blame taker. Won't work, in my opinion.

Frankly, I can defend the actions of just about everyone in this story except the USOC. I can defend Baker, Dempsey, even Zimbalist, who's just in this to sell books. You can have a personal or professional interest that depends on hurting or killing Boston 2024. That's your right.

The USOC, however, is supposed to be invested in bringing the Olympics to the US. That's their purpose. There isn't any precedent for granting and then revoking a bid, because there's no formal process for any of this - they're making it up as they go along. The December presentations? Made up. The January announcement? Whenever they felt like it (I doubt they were even aware that MA had a new Governor, much less that it was Inauguration Day). The September submission deadline is meaningless for Paris, Hamburg, et. al. since it's supposed to amount to the submission of a "1.0" concept plan, with the Bid Book following eighteen months later. The USOC has turned it into a hard deadline for a fully budgeted and scoped plan, something no other City would ever be required to have at this stage.

Given that millions have been spent on this at this point, what happens when they revoke? Can Boston 2024 sue them? What kind of agreement did they sign back in January? It must have included some level of guarantee on the part of both sides, so what did the USOC agree to do? Whatever it is, they can't have satisfied the agreement, if there was one.

The bottom line is that however much LA might have been the preferable choice in January, Boston was selected. In the six months since, real work has been done, work that hasn't been done in LA and work that can't be done between now and September. Essentially, certain USOC members (not necessarily all of them - as far as we know the group is in chaos and these ultimatums are coming from rogue actors) are making the claim that all the work that separates Boston's 2.0 and 1.0 is unnecessary in LA, because IT'S LA!!!!!!!!!!!!!!!!

Recall that Boston's 1.0 was better than LA's 1.0, and that becomes a pretty tough argument for me to buy.

 

[Commuting Boston Student]

$5B in private funds? Because having an Olympics is a good in itself. It's fun, and it builds civic pride. But we've been over this before.

There are plenty of other ways to have fun and build civic pride that aren't centered around a corporatized and overcapitalized money grab wearing the tired window dressings of sport.

And it isn't $5B in private funds. You don't get to have this both ways - if this is really $5B exclusively in private funds, then there's no host guarantee and there's no additional police/EMS and there's no Olympics lanes and private money is paying for 100% of the private security and other support needed to put this thing on. Nevermind the tax breaks or the land grabs or the costs of doing business.

We've been over that before too. It's ridiculous to expect the city to aggressively disenfranchise itself from the bid, which means it's ridiculous to claim that public money isn't being and won't be spent.

 

[stellarfun]

Baker is a secondary player. The state never offered to help finance the bid, or lift a financial finger to support it. Mass transit improvements, in theory, would occur regardless of whether Boston was chosen or not. Halting the proposed BCEC expansion was a negative when it came to the bid, although Baker has said when he made the BCEC decision, he was unaware of the bid's intended use of the BCEC.

Which passes the buck to Walsh, who has said Boston will sign no guarantee, even though the IOC and the USOC have said a guarantee is expected. In its place, B24 has said its buying all sorts of insurance, against wars, game cancellation, etc etc, but its not buying any insurance that will cover a developer's failure to deliver a venue or a village. Further, neither the city nor the state will take a single step to acquire any land or rights required for the Widett site before Boston is selected as the host city.

Under 2.0, the Master Developer acquires the land and relocates the businesses. But of course, the city won't know if there is a Master Developer until the city receives responses to its RFP in 2018, indeed if there are any responses at all. What is the IOC to do if no Master Developer signs up?

The USOC can be criticized for not doing sufficient due diligence, or perhaps B24 reps sweet-talked around these points in their presentations, but, IMO, B24's will ultimately fail, sooner or later, because Walsh will not sign a guarantee; Baker and the state are refusing to help in any way financially; and the convoluted scheme to ensure venues get built on schedule is extremely high risk from the perspective of the IOC.

From the USOC standpoint, why should the USOC spend millions to further develop a bid that can't/won't meet the guarantee threshold?

 

[West]

Given that millions have been spent on this at this point, what happens when they revoke? Can Boston 2024 sue them? What kind of agreement did they sign back in January? It must have included some level of guarantee on the part of both sides, so what did the USOC agree to do? Whatever it is, they can't have satisfied the agreement, if there was one.

There was a Joinder Agreement signed:

http://www.bostonglobe.com/rw/Bosto...be.com/2015/02/25olympic/revisedagreement.pdf

I get to review and negotiate many legal documents, with the advice of excellent counsel (I'm not a lawyer myself). This Joinder Agreement is one of the more lopsided agreements I've ever seen. The representations, warrants, and indemnifications flow entirely from the City to the USOC.

There is a grand total of one phrase that I see that puts any onus on the USOC at all:

Section 3.01 Except to the extent caused by the USOC’s gross negligence or willful misconduct, or arising out of any breach or misrepresentation by the USOC under this Agreement or the Bid City Agreement,

.... and then that section goes back to detailing the City's indemnification of the USOC. So, reading carefully, this just says that the City's indemnification is not pertinent to the extent the USOC was grossly negligent or engaged in willful misconduct. It says nothing at all about what the USOC would owe the City if there were such negligence or misconduct by the USOC. Could a lawyer for the City gin up a suit? Of course, lawyers can always gin up a suit. Could they win it? Fat chance, if you define "winning" as getting something for the client. If the lawyers were defining "winning" as generating tons of billable hours (ahem), then yes, the lawyers could win.

I'm not disagreeing with you in your arguments about the USOC by the way. I agree with a sizable majority of your post. I'm just trying to answer your questions about USOC's legal liability while acknowledging that I'm not a lawyer. Marty Walsh let them off the hook proactively back in January, for all practical purposes, when he signed that Joinder Agreement. Which, as you recall, he described as "mere boilerplate." And then, when Walsh negotiated out the offensive language about prohibiting City employees from criticizing the plan, he did nothing to shift the imbalance of the rest of it. The version linked to above is the revised, February version. I can't find a signed copy, but I am moderately confident he did sign it, but if I remember that wrong I'm sure someone will correct me.

 

[Equilibria]

The USOC can be criticized for not doing sufficient due diligence, or perhaps B24 reps sweet-talked around these points in their presentations, but, IMO, B24's will ultimately fail, sooner or later, because Walsh will not sign a guarantee; Baker and the state are refusing to help in any way financially; and the convoluted scheme to ensure venues get built on schedule is extremely high risk from the perspective of the IOC.

From the USOC standpoint, why should the USOC spend millions to further develop a bid that can't/won't meet the guarantee threshold?

Because that's what the USOC signed up for. Could Boston 2024 have better engaged the Governor, the Mayor, and other helpful players? Sure. Could they have come up with a better scheme for the Stadium? Sure. With different management, this could have been a very different bid. The Widett site was in the December presentation. So was the Boston Common Volleyball venue, the Assembly Velodrome, and the like. The USOC endorsed those ideas by voting for them.

The USOC isn't supposed to be a supervisory body here - there is no established precedent for their acting as one. Starting in January, they were supposed to be "all-in", fully engaged in developing America's bid. Instead, they've been absent and hostile, expressing support in obviously insincere sound bites while allowing the LA backers who were defeated in December free reign to leak "doubt" to the media.

If the USOC had been engaged in developing Bid 2.0 and by September jointly decided with Boston 2024 that the public opinion was unrecoverable - a "We need to spend 4 more years working these issues out" sort of thing - I could go for that. The USOC is no longer supposed to sit in judgement on Boston 2024's plan. It's supposed to be their plan.

.... and then that section goes back to detailing the City's indemnification of the USOC. So, reading carefully, this just says that the City's indemnification is not pertinent to the extent the USOC was grossly negligent or engaged in willful misconduct. It says nothing at all about what the USOC would owe the City if there were such negligence or misconduct by the USOC. Could a lawyer for the City gin up a suit? Of course, lawyers can always gin up a suit. Could they win it? Fat chance, if you define "winning" as getting something for the client. If the lawyers were defining "winning" as generating tons of billable hours (ahem), then yes, the lawyers could win.

Thanks for actually finding the document and providing informed analysis. Frankly, I'd argue that the USOC's actions so far pretty well demonstrate "gross negligence", if not "willful misconduct" (and that part might come out in Discovery). I also don't expect any lawsuit to be filed, much less won, by a Boston 2024 that will probably dissolve tomorrow if the bid is retracted.

 

[Equilibria]

New post for new news:

http://www.boston.com/news/local/ma...4Vqx4K/story.html?p1=ClickedOnBreakingNewsBox

What do you think the odds are that Eric Garcetti can sign the agreement now? It's the agreement, or a US Olympics. The IOC can't have both.

 

[West]

Frankly, I'd argue that the USOC's actions so far pretty well demonstrate "gross negligence", if not "willful misconduct" (and that part might come out in Discovery). I also don't expect any lawsuit to be filed, much less won, by a Boston 2024 that will probably dissolve tomorrow if the bid is retracted.

B 2024 is not a party to that Joinder Agreement, so they wouldn't have standing to sue on that, only the City would. The City's position would look pretty weak to me, great for billable legal hours, weak on winning.

B2024 did sign something, which I just cannot find now.

Walsh is weighing in:
https://www.bostonglobe.com/2015/07...on-rush-bid/uTuxJ0Foc9xsLJXQ3IGjdK/story.html

 

[West]

beat me to it....

 

[F-Line to Dudley]

B24 isn't going to sue if they get stabbed in the back by the USOC. Not enough of the B24 crew will still be here to band together and continue fighting. Every pol with prospects for private-sector consulting (Gov. Patrick, I'm looking in your direction) is going to be taking their Acela trips to Manhattan within a month for their new gigs. The local old money and usual-suspects builders will go back to doing what local old money and usual-suspects builders do: milk the crusty old status-quo institutions in mutual affirmation. And some people who latched onto this as a career steppingstone--Davey, for instance--are never going to work in this town again and will pop up in some other state. Which will suck, because we'll get an additional brain drain for our troubles.


This bid started betraying the signs of not being so tightly bound by civic pride when it bet the farm on "Master Developers", and when so many prominent names of the Bid Version 1.0 era became very transient indeed by the time of the runup to v2.0.

Lack of binding energy isn't a trait that's exclusively external to B24 and 'owned' by the elected officials and skeptical public. Some of the players on the inside have been a bit too come-and-go throughout, with stick-to-itiveness running somewhat inversely proportional to net worth.

That maybe isn't the reason why the bid isn't succeeding, but it is characteristic of everything that's muddled surrounding the bid. The USOC knows this. They have nothing to fear in retribution because retribution takes a level of binding energy much greater than we've seen at any point so far.


If it goes, it'll be with a whimper not a bang. And the only people trying to whip some passion will be the ones who don't have other places to go or people to see. Walsh, for instance. I could see lots of too-little-too-late spittle coming from him the day after...from lack of better options. Maybe an honest off-the-cuff remark from someone like Davey whose fall isn't cushioned by money...but he'll be tempered in the back of his head by how many resumes he has to mail out-of-state the next day and day after that. The rest of them? They're just going to shrug and slink off to whatever it is they were doing before, or whatever it was they momentarily put on hold for this.

 

[jdrinboston]

As someone who has been largely indifferent to the Olympic bid, I'm almost ashamed to admit the past 48 hours have been the most interesting part of the whole process. The legal and political machinations of an Olympic bid - for me - are equal parts fascinating and horrifying.

 

[Equilibria]

B24 isn't going to sue if they get stabbed in the back by the USOC. Not enough of the B24 crew will still be here to band together and continue fighting.

Sure. I don't think the next fight will be here - I think it will be in Los Angeles, when a whole bunch of activists look at Walsh's statement this morning and ask why, if the Mayor of Boston had a year of close association with a bid committee and still wouldn't sign the HCA, the Mayor of LA should do so on hours' notice.

 

[jdrinboston]

And some people who latched onto this as a career steppingstone--Davey, for instance--are never going to work in this town again and will pop up in some other state.

Rich Davey is probably one of the best public servants that I've seen in my - albeit short - 17 years of "adulthood," I can't tell you how incredibly sad this statement makes me.

 

[Equilibria]

Rich Davey is probably one of the best public servants that I've seen in my - albeit short - 17 years of "adulthood," I can't tell you how incredibly sad this statement makes me.

Well, I'm not sold on it. I don't know him, but Rich Davey doesn't seem like the type who just takes jobs for the sake of having them. He can retreat into the private sector for a decade or so and pop back out into the next Democtatic administration. He quit the DOT, and it's not like there's any other DOT to head while Baker's in office. He signed up for some obscurity.

 

[F-Line to Dudley]

Rich Davey is probably one of the best public servants that I've seen in my - albeit short - 17 years of "adulthood," I can't tell you how incredibly sad this statement makes me.

Aye.

But it's true, nonetheless. He's a foot soldier, not a financier. He still has to work for a living. When the blame gets passed around, the foot soldiers are the ones easiest to dump on with the most to lose. The transients and political hangers-on don't have anything to lose; they'll be gone and have many other things to be hangers-on to. The old money isn't going anywhere; they just re-face inward. The only ones who get stuck with the rep for "ruining" the bid are the ones who have something to lose.

The ones who have to work for a living will simply do it elsewhere. Nobody cares if provincial Boston eats its own; other cities count on it for hiring away our best minds when they get sick of putting up with this. In Davey's case he'll not only be fairly evaluated for his talents elsewhere to the point where his next employer will say "Boston's loss"...but he'll also never get a fair shake here.

It sucks. But he knew this was one of the possible outcomes, and I don't think expects anyone to feel sorry for him. He'll land on his feet and get another prominent gig. It'll just be elsewhere, and somebody else's gain.

 

[stellarfun]

Aside from standing issues, there is the question of damages: the city hasn't spent a cent on the bid (beyond the normal cost of doing business), and the state is out $250,000 for its consultant.

Regardless, if there was such a claim by the City, the USOC would point to the indemnification agreement signed by the city on March 20 2015.

On January 8, 2015, the USOC chose Boston to be its entry in a global competition to host the 2024 Olympic and Paralympic Games. A prerequisite to selection by the USOC of Boston to submit a bid to host the 2024 Games is agreement to the terms of a Bid City Agreement between the USOC and Boston 2024 Partnership, Inc. and a Joinder Agreement from the City of Boston to the USOC under which the City agrees to certain terms of the Bid City Agreement. The Bid City Agreement and Joinder Agreement will govern the terms of the business arrangement among the USOC, Boston 2024 and the City of Boston during the period through selection by the International Olympic Committee (“IOC”) of a host city in 2017.

The Bid City Agreement and Joinder Agreement include an obligation by Boston 2024 and the City of Boston to indemnify the USOC and, in the event of a breach of the Bid City Agreement by Boston 2024 or the City of Boston, the payment of liquidated damages to the USOC in the amount of $25,000,000. This agreement was signed on March 20, 2015.

Effective upon the City’s selection by the USOC, Boston 2024 obtained a comprehensive, claims-based insurance policy from three highly-rated insurance companies that covers the obligations of Boston 2024 and the City of Boston under the Bid City Agreement and Joinder Agreement, including a demand for the $25,000,000 liquidated damages. The policy period covers the period January 8, 2015 through October 1, 2017 (the period through selection by the IOC of a host city) with a premium of $1,007,500.

From the audited financial statement of B24.

Walsh's statement this morning had all the signs of a man kissing the Boston bid good-bye. And its pretty lame to say you need to study the economics of the bid more, but apparently haven't yet gotten around to asking your staff to do that.

 

[tangent]

$5B in private funds? Because having an Olympics is a good in itself. It's fun, and it builds civic pride. But we've been over this before.

Here here.

 

[stellarfun]

Let's not get carried away trying to define where Davey might wind up. His wife is a partner at Ropes & Gray.

 

[Equilibria]

Walsh's statement this morning had all the signs of a man kissing the Boston bid good-bye. And its pretty lame to say you need to study the economics of the bid more, but apparently haven't yet gotten around to asking your staff to do that.

Agreed. I interpreted his needing to study the risk more as a reflection on the incompleteness of the bid - we can't complete the study until we have the IMC proposal and Master Developer on our desk. He's right, technically. Until they know who the Master Developer would be, they can't evaluate the risk that they go belly-up in 2019 and stick Boston with the bill, the only scenario under which Boston would assume a crushing financial load.

Of course, he's known all that the whole time. He's also setting himself up against the USOC. He can say that they forced him to make a statement one way or the other before his own study was done, the same statement that Baker can make. Since the USOC had set no official deadlines that conflicted with those studies before Friday, it's a fairly compelling argument even if Baker's study was basically a stall tactic.

Baker's probably celebrating this morning. This is exactly what he was hoping would happen.