"A Land Grab Wrapped in the Olympic Rings" How NYC2012's Real Estate Ambitions Have Perverted and Doomed New York City's Olympic Bid

“A Land Grab
    Wrapped in the Olympic Rings”

   How NYC2012’s Real Estate Ambitions
Have Perverted and Doomed New York City’s
               Olympic Bid

         A NYC2012 Watchdog Report
        by Develop Don’t Destroy Brooklyn

      in consultation with NewYorkGames.org

Table of Contents

Letter to Dr. Jacques Rogge, IOC President .......................... 1

A Land Grab Wrapped in the Olympic Rings
(Top 10 Ways to Tell That the Olympics Are
NYC2012’s #2 Priority........................................................ 3

What Will the Olympics Cost New York Taxpayers?
(Well, It Depends Who You Talk To…) .................................. 6

Why the $12 Billion Price Tag Dooms New York’s
Olympic Chances ..............................................................13

In Summary ....................................................................16

Dr. Jacques Rogge                                               August 26, 2004
President
International Olympic Committee
Château de Vidy
1007 Lausanne SWITZERLAND

Dear Dr. Rogge,

It is with regret that we write to you on a matter of critical importance regarding
the NYC2012 Olympic bid—a matter which we believe threatens to undermine the
values and policies the International Olympic Committee seeks to promote.

Develop Don’t Destroy Brooklyn had hoped this issue would be subject to the
candidate city’s environmental processes and approvals. In the case of New York’s
bid, however, that process has been made moot. Knowing that our City Council
would never approve the two divisive venues discussed below, NYC2012 has chosen
to circumvent the Council and would have these venues approved by an unelected
bureacracy, unaccountable to our City government. Crucial decisions would thus be
made without our City’s or citizens’ input, before the Evaluation Commission has
been able to file its report. That is why we are taking the unusual step of appealing
directly to you.

The Facts: NYC2012 recently announced the addition of two new venues to its
Olympic bid—the “Jets Stadium,” proposed for Manhattan’s West Side, and the
“Nets Arena” proposed for Brooklyn. These projects share several troubling
features:

•   They are bitterly opposed by the neighborhoods in which they are sited

•   They were conceived in secret, without public input (or even prior knowledge)

•   They are structured so as to avoid New York City’s customary environmental
    regulations and its normal land use review processes, as well as to avoid
    legislative review, approval and oversight by the New York City Council

•  They are being promoted as “essential” to New York’s Olympic bid, which the
   public is being told will be lost if construction on both projects does not begin
   prior to your vote next summer.
Dr. Rogge, it is with regret that we inform you that the International Olympic
Committee is being blamed for the divisive venue plans in New York. As The New
York Times reported on August 6th:

                                        -1-

"You would not get the Olympics, there is just no question about that,"
      [Mayor Michael] Bloomberg said when asked how the bid would go if
      community opposition scuttled the stadium plans. "The Olympic Committee
      takes this plan, and if they're not convinced that you are going ahead and
      building [the Manhattan stadium and Brooklyn arena], we won't be selected."

On August 17th, the Mayor reiterated to ABC-TV that:

      “If we don't get that [stadium] done we will have to drop out of the Olympic
      competition.…”

To the best of our knowledge, the use of this empty rhetoric to manipulate citizens
into accepting unnecessary development marks a new abuse of the Olympic bid
process. Worse, it implies that the IOC would favor a bid based on undemocratic
and destructive processes.

We know that requiring bid cities to go billions of dollars into debt is not only
antithetical to the Olympic Charter, it is completely contrary to the IOC's policy to
control cost and complexity that was adopted at the 115th Session last year.
Unfortunately, NYC2012 is ignoring your efforts to reduce gigantism, to the
detriment of the bid and of our community.

As citizens of New York City, we therefore feel that we must call on you and the IOC
to refute these claims by reaffirming to New York City’s bid committee and public
officials that:

      1. The IOC does not countenance bids that involve the gratuitous
      destruction of homes and neighborhoods, when suitable alternatives
      exist (as they do in New York City); and

      2. The IOC does not countenance bids that circumvent a candidate
      city’s normal approval process in the name of attracting an Olympics.

We are grateful for your support in this critical matter, and for championing a bid
process that will create a just and lasting legacy.

Yours truly,

DEVELOP DON’T DESTROY BROOKLYN

cc:   Urs Lacotte, Director General
      Gilbert Felli, Olympic Games Executive Director
      Richard W. Pound, Comité Olympique Canadien
      Michael Bloomberg, Mayor, New York City
      Dan Doctoroff, Deputy Mayor, NYC2012

DEVELOP DON’T DESTROY BROOKLYN leads a broad-based community coalition fighting for
  development that will unite our communities instead of dividing and destroying them.

                                         -2-

A Land Grab Wrapped in the Olympic Rings
         (Top 10 Ways to Tell That the Olympics
               Are NYC2012’s #2 Priority)

1. The $12 billion price tag

     At a time when the International Olympic Committee (IOC) is stressing
     economy, and hoping to persuade developing nations that they, too, can
     afford to host the Games, this price tag invites disqualification. [See “Why
     the $12 Billion Price Tag Dooms New York’s Olympic Chances,” page 13.]

2. Gratuitous construction

     The Olympics plan will “help us expedite recreational and infrastructure
     projects citywide,” Mayor Michael Bloomberg told The Brooklyn Paper’s
     Deborah Kolben on 8/7/04.

     But why? Without the Nets Arena Complex currently proposed for Prospect
     Heights, Brooklyn, New York City already has three major arenas. Our
     competitors -- Paris, London and Madrid -- each propose just one.

     So does New York really need this new venue to qualify for the Olympics? Or
     does Bloomberg need the Olympics to get new development expedited?

3. Permanent versus temporary construction

     The notion (most recently advanced by Mayor Bloomberg) that constructing
     new, permanent venues is key to our Olympic success, is preposterous.
     NYC2012 could propose using more existing venues, and building temporary
     ones. Paris, for example, needs 18 new venues: 11 of these will be
     temporary—and the IOC has praised Paris for having a plan with “good
     legacy.”

4. Lack of back-up positions

     Host cities that truly want the Olympics take great pains to convince the IOC
     that they have back-up plans. NYC2012 has taken the opposite
     tack—claiming that its bid can only succeed if the proposed West Side
     Stadium and Nets Arena are built. This argument is not intended for the
     IOC. It is intended to manipulate the public at home.

                                      -3-

In fact, "There are many facilities [besides a new Nets arena] that could host
     gymnastics," a City Hall staffer who did not wish to be identified told the
     Brooklyn Star’s Nik Kovac on 8/12/04. But don’t expect either Bloomberg or
     Deputy Mayor Dan Doctoroff to admit that to a public that opposes building
     that arena.

5. Quick, beat the controversy!

     Bloomberg and Doctoroff claim that our Olympics bid is doomed unless the
     Jets Stadium and Nets Arena are rushed through now. But no host city has
     ever broken ground on new construction for a proposed Olympic stadium
     before being awarded the Olympics, and no troubled venue has put a "shovel
     in the ground" just before the IOC’s vote.

     Why, knowing all of this, would a bid committee that truly wanted the
     Olympics as their first priority insist on fast-tracking two new venues in
     neighborhoods that bitterly oppose them? The IOC does not want this kind
     of controversy, to put it mildly—ergo, the choice of where to put these two
     new venues was not made with the IOC in mind.

6. Other development boondoggles

     NYC2012 must think the word “Olympics” translates into “open season for
     developers,” because the Jets stadium and Nets arena aren’t the only
     obvious boondoggles included. Why, for instance, chop down part of a
     proposed wilderness green belt to build a new equestrian venue in Staten
     Island when the U.S. equestrian team’s world-class headquarters is located
     in nearby Gladstone, New Jersey?

7. Queens? Where is Queens?

     Flushing Meadows could be the centerpiece of an economical and practical
     Olympic plan. What would have been lost by fully utilizing the open space,
     easy access and history or hosting large events that Queens provides?
     Nothing, except the chance to push through unneeded development in
     Manhattan and Brooklyn, which is clearly NYC2012’s top priority.

8. “X” marks the spot

     Although it sounds clever, NYC2012’s much-vaunted “Olympic X” actually
     marks the sites of a cumbersome, potentially nightmarish logistical and
     traffic plan. The “X” would treat athletes horribly, forcing them to repeatedly
     transfer between buses, ferries and trains, and walk long distances. The IOC
     heavily criticized this plan in their recent report, yet NYC2012 clings to the
     “X.”
                                          -4-

9. End run around the Host City

     With the appointment of the Empire State Development Corporation
     (formerly the Urban Development Corporation) as lead agency for the Jets
     Stadium and Nets Arena, New York City’s environmental and land use review
     procedures would be completely circumvented.

     The clear message is that NYC2012 doesn't believe that New York’s City
     Council backs their plans for using the proposed Jets Stadium and Nets Arena
     as Olympic venues. From the IOC perspective, this is a devastating
     development. It is hard to think of another instance where major venues
     have been built without the approval of a host city, and it is completely
     contrary to the Olympic Charter to do such an end run around New York
     City’s government, since it is the city itself which would be awarded the
     Olympics, and not a secret authority like the ESDC.

10. Public? What public?

     NYC2012 acts as if it has a popular mandate to spend billions of dollars and
     reconfigure New York City in ways which will impact civic life (and our tax
     burden) for generation to come. In fact, nothing could be further from the
     truth. Venues were selected in a secret process, with zero public
     involvement, and no public debate has been held on the details of this plan,
     large or small. NYC2012 speaks to the public only when it wants to sell us
     on their decisions.

     As Mike Vaccaro wrote in the New York Post on August 16, “Dan Doctoroff
     told the world yesterday he was presenting this bid ‘on behalf of 8 million
     New Yorkers.’

     “Is he really?”

                                      -5-

What Will the Olympics Cost New York Taxpayers?
      (Well, It Depends Who You Talk To…)

Ask four different sources what the 2012 Olympiad will cost New York City
and State taxpayers, and you will get four very different replies:

1. NYC2012: “Nothing”
http://www.nyc2012.com/faq.html#paying
Frequently Asked Questions

     How much will the Games cost the taxpayers?
     Nothing. The Games will be funded from private Olympic revenues, including
     television rights, ticket sales and sponsorships and licensing. [emphasis
     added]

2. New York Post: “OLYMPIC TAB $OARS: It'll Cost $12B to bring 2012
Games to Apple”
Tom Topousis, 3/8/04

     Hosting the 2012 Olympics will cost more than three times what the city's
     nominating committee has claimed, with a total price tag of at least $12
     billion to pay for the massive array of projects that will be needed to host the
     Games.

     City officials and the bid committee, NYC2012, have projected the cost of the
     Olympics at $3.6 billion, all which they say would be recouped by ticket
     sales, television revenues and advertising.

     But the official price tag doesn't include the cost of a new subway connection
     to the West Side, a Manhattan stadium, the expansion of the Javits
     Convention Center along with parks and plazas - all of which are featured in
     the city's bid to host the Games…

                                       -6-

3. New York Daily News: “[These guys] have a different definition
of ‘private’ than the rest of us do.”
http://www.nydailynews.com/08-22-2004/sports/col/story/224357p-
192728c.html
Mike Lupica, 8/21/04

     The mayor of New York City, Michael Bloomberg, goes to Athens to try to sell
     people on the idea of bringing the Summer Games to New York City in 2012…

     And suddenly, the centerpiece of their salesmanship is this: The 2012 Games
     will be entirely financed by private funds!

     If you believe that, these guys have some land on the West Side they'd like
     to sell you.

     Well, not the land itself, exactly, that's much too valuable. But they
     desperately want to sell you a new stadium for the Jets. That is where the
     first $600 million of public money goes to an Olympics they say will be
     entirely financed by private money…

     The NYC2012 people sell and sell and sell the idea of how much they need
     this new stadium, knowing they might not get the 2012 Games. And what
     happens then?

     The Jets have their stadium for 10 football games a year. The one they say
     they're willing to pay $800 million for, without ever talking too much about
     how they hold on to the naming rights, which could bring in $200 million at
     least and maybe more than that.

     Because if you believe Woody Johnson, owner of the Jets, another rich guy
     trying to figure out how to get a spot at the public trough, is going to spend
     more money on his new stadium than he did to buy the Jets in the first
     place, you really do believe the 2012 Games will be privately financed…

     You want to get an idea of what the 2012 Summer Games will be like in the
     city of New York? Take a look around during the Republican Convention.
     Start to look into what the Athens organizers told people their Olympics were
     going to cost and the billions more that it will end up costing. How are they
     going to pay for all this? New taxes.

     Security alone is in the billions now. What will it cost eight years from now?
     By that time, people will probably ask, and legitimately, another question: If
     it costs this much to protect the Olympics, why are we still having them at
     all?
                                       -7-

Bloomberg's answer, often red-faced, to people in private who question all
      this: "You don't understand."

      Only because the mayor, and his chief organizing hustler Doctoroff, out in
      front of the parade, have a different definition of "private" than the rest of us
      do.

      But then, guys like that always do.

      And expect you to pay for their vision.

4. NewYorkGames.org: “NYC2012’s Plan Will Cost $12 billion”
http://www.newyorkgames.org/news/archives/000042.html
Brian Hatch, 7/28/04

NYC2012 claims that their plan for the Games will cost taxpayers "nothing." In
truth, they have proposed a record-breaking budget of $12 billion that includes
at least $5 billion coming from the public. If private investors don't step up to pay
for other ambitious parts of the plan, the amount would be billions more.

a. Olympic Operations
b. Olympic Stadium
c. Olympic Village
d. International Broadcast Center

Background

New York's Olympic budget is of central importance. The financial plan details not
only how much a cash-strapped City will commit to this event, but containing costs
has become a major issue for the International Olympic Committee as well.

Initially, planners presented a $2.4 billion budget as the total cost of the New York
bid, but major capital items such as the village and stadium were not included. In
the fall of 2002, the New York Post noted the omissions:

      The cost of hosting the 2012 Olympics in New York would be more than twice
      what the city's bid committee has claimed - a whopping $6.5 billion total tab,
      The Post has learned....

                                         -8-

Officials at NYC 2012 have put the cost of hosting the Olympics at $2.4
      billion, all of which they say would be repaid from broadcast revenues, ticket
      sales, sponsors and other private sources.

      But financial documents prepared for NYC 2012 and obtained by The Post
      show that additional, publicly funded development will be needed to host the
      event - and would tack on $4.1 billion to the price tag.

Soon thereafter, the Gotham Gazette reported that NYC2012 conceded the budget
was higher: "Overall, NYC 2012 estimates the games will cost $7.2 billion." A cost
breakdown wasn't provided.

This NYg.org report indicates that NYC2012's number is still low – by nearly five
billion dollars. Based on the best available current information, the cost of their
Games is nearly $12 billion. These are the four elements to their proposed budget:

a) $3.6 billion – Olympic Operations.

Funding source: Olympic committee revenues.

This figure includes the cost of running the Games, as well as minor venue
construction. It's higher than the previous $2.4 billion figure, as bid organizers have
adjusted the 2000 bid book estimates to 2012 dollars, when the revenues and
expenditures will occur. These costs are planned to be covered by television, ticket,
and sponsor incomes.

                                         -9-

b) $5.8 billion – Olympic Stadium, etc.

Proposed funding source: public bonds and Jets.

The Olympic stadium is proposed to be on Manhattan's west side, by the Javits
Center. On March 23, 2003, Crains reported a $3.7 billion financing plan, where
"$1.6 billion would go for No. 7 subway line extension and other transportation
improvements; $800 million would be for decks over rail yards for a stadium and a
park; and $700 million would go for infrastructure improvements, including new
parks, open space, the relocation of municipal facilities and a retractable stadium
roof. The remaining $600 million would go for a bond reserve fund, insurance, and
so-called 'soft costs.'"

In October 2003, the New York Sun reported that the bond is now "coming in at
about $5 billion" without breaking out the costs. The low estimate for the 7
extension is likely one of the areas that was adjusted.

The bond cost list from Crains does not include a Jets contribution for the stadium
structure itself. The Jets have said they would pay for the cost of an open air
stadium built on land, but the public would have to cover the additional costs of the
retractable roof above and the rail yard platform below. Though difficult to pin
down, in November 2002, the New York Post and Bergen Record put the Jets
share at $500 million. In November 2003, Crains reported the contribution has
grown to $800 million.

To pay off the construction bond for these projects, NYC2012 has proposed 28
million square feet of office space in the so-called "Hudson Yards" north of the
                                       - 10 -

proposed stadium – the equivalent of three World Trade Centers – in an office
district that doesn't yet exist. By contrast, the last building boom from 1996-2002
added only 6.5 million square feet in the existing office districts.

Although the mayor has said "this will be an Olympics done literally without any
public funding whatsoever," billions of taxes generated by the new office towers
would be diverted to make debt payments on the Olympic bonds. This has been
reluctantly conceded by his deputy, the NYC2012 leader, though their website
continues to say that the taxpayers will pay "nothing."

c) $1.6 billion – Olympic Village

Proposed funding source: private sector.

Developers are expected to build the Olympic village on the Queens waterfront with
private resources. Although the potential for this part of the City's waterfront is
great, thus far Queens West has only supported the construction of two residential
towers in twelve years. (All but one of the towers is computer generated in the
foreground of the image above.) If no developer is willing to assume the risk of
building a dozen residential towers all at once in this fragile market, that expense
will fall upon the public.

                                       - 11 -

d) $.6 billion – International Broadcast Center, etc.

Proposed funding source: private sector.

The proposed headquarters for the world's broadcast media is the silvery tower in
the image above. The market for new studio space is limited, and nonexistent in an
expensive high-rise, so this expense could fall on the public as well. The bid book
identifies private funding for the IBC and part of the canoeing and sailing venues at
$393 million in 2000 dollars. To reflect 2012 dollars, NYg.org has used the same
multiplier NYC2012 used to adjust the organizing committee budget in the first
item.

The total for the items above is $11.6 billion. With NYC2012 rounding to “about $5
billion” for the public bond, the current overall estimate has also been rounded, to
$12 billion.

This is the second time the total has been adjusted upward. It isn't likely
to be the last.

                                        - 12 -

Why the $12 Billion Price Tag
                Dooms New York’s Olympics Bid

by Brian Hatch
first published as “IOC to Penalize Costly Bids”
a New York Games.org Report
http://www.Newyorkgames.org/

Since taking office in 2001, International Olympic Committee President Jacques
Rogge has made reducing the cost and complexity of the Olympics one of his
principal goals. He told the 2012 bid committees that their top priorities should be
security, athlete care, and "control over cost and complexity." His initiative
should be of particular concern to NYC2012, which has proposed a record
breaking $12 billion bid.

As Rogge took office, the final report of the IOC Coordination Commission for the
Sydney 2000 Olympic Games had concluded that:

      Measures will have to be taken to control the future growth of the Games.
      The Games certainly must not be allowed to grow any larger, otherwise they
      will present a major risk.

With an ever increasing number of athletes, reporters and spectators wishing to
participate, the concern was that the Olympics would become a victim of its own
success.

President Rogge his concerns in a July 25, 2002 interview with Agence France-
Presse:

      I believe there is a possibility of reducing costs and infrastructural
      expenditure.... It will not be an easy task, but it is possible to trim costs
      without prejudicing the quality of the Games.... There are too many large
      infrastructures in the cities hosting the Games, stadiums and the like, which
      are then not filled. You have to convince the cities they don't have to have
      the best of the best.

                                        - 13 -

He went on to give a major reason for these reforms:

      It's a dream of the IOC to have Games in Africa and Latin America,
      but I think that would entail reducing the Games' costs and their
      complexity.

Of the 49 summer and winter Olympics Games that have been awarded by the IOC,
not one has been to a city in Africa or South America. Nor, for that matter, a
Muslim country. The IOC doesn't want spiraling costs to favor rich cities, and
thereby price large areas of the world out of contention.

To investigate this issue, President Rogge formed an "Olympic Games Study
Commission" headed by Dick Pound, the powerful IOC member from Canada. The
Commission was given the mandate to "propose solutions to help manage the
inherent size, complexity and cost of staging the Olympic Games in the future, and
to assess how the Games can be made more streamlined and efficient, to
guarantee the Games’ attractiveness and sustainability."

The first report of the Pound Commission was given in November, 1992. In it,
Commission Chairman Richard W. Pound wrote that:

      A major cost is venues, where the IOC is increasingly concerned about
      "white elephants" that aren't well utilized afterward. Therefore, the
      first priority is the use of existing venues. Second is temporary
      construction, which the Commission estimate's costs 30% to 50% less.
      Last priority is a new facility, and that should only be where there is a
      clear community need and afteruse.

The report concluded by recommending that bid cities that do not follow these new
guidelines should be punished:

      Bidding cities should be advised that the failure to address these
      issues satisfactorily will be reported adversely by the Evaluation
      Commission to the IOC members.

Following the release of this report, President Rogge continued to press the issue
during a visit in London. The Daily Telegraph reported on 26 June 2003:

      One of the issues discussed with the Prime Minister will be plans for a smaller
      event in 2012. "We are looking at downsizing the Games without affecting

                                       - 14 -

the sports," Rogge said. "In Sydney we sold 9.5 million tickets. We will sell
      5.5 million in Athens and we do not want to go back to 9.5 million.

In the Pound Commission’s final report – a report whose recommendations were
adopted by the IOC during its 115th Session in Prague in July of 2003, the
Commission concluded that:

      The IOC must make it clear that it does not subscribe to a view
      that "bigger is better." The IOC must also make it clear that
      any such attitude will likely be a handicap, rather than an
      advantage, for any bid.

                                       - 15 -

In Summary

In the minds of hundreds of millions of people, the Olympic Games embody our
most cherished ideals of strength, sportsmanship, democracy and fair play.

By wrapping a land grab in the Olympic rings, NYC2012 undermines not only its
own Olympic bid, but these important and enduring values.

We appeal to the International Olympic Committee and to fair-minded people
everywhere to protect the bid phase from cynicism and corruption by clearly
reaffirming that:

      1. The IOC does not countenance bids that involve the gratuitous
      destruction of homes and neighborhoods, when suitable alternatives
      exist (as they do in New York City); and

      2. The IOC does not countenance bids that circumvent a Host City's
      normal environmental regulations and approval procedures in the
      name of attracting an Olympics.

                                      - 16 -