Boston 2024 CEO Rich Davey says he thinks this week’s controversial revelations—that the Olympic bidding group suggested the city go into debt to finance development related to the games—would have been better received had those plans been made public months ago.
Last year’s bidding documents that helped Boston 2024 win the United States Olympic Committee’s nomination as a host city were released to the public, with redactions, in January. The full version of the plan was published this week after being obtained by Boston magazine and The Boston Business Journal.
The newly released plan said a public authority would pursue tax increment financing to fund $345 million worth of land acquisition and infrastructure costs at Widett Circle. According to the group’s plans, Widett Circle would be the site of an Olympic Stadium, and would eventually become a new mixed-use development on the South End-South Boston border.
The plan has set off the latest round of outcry about the Olympic bid, because Boston 2024 has repeatedly said it would not use public funds to build Olympic venues.
In an interview with Boston.com Friday afternoon, Davey said this type of infrastructure funding is common for big development projects. But, he said: “We redacted that information. I think that probably suggested to folks there was something nefarious there. It wasn’t.’’
This is how the type of financing Boston 2024 said it sought works:
The city goes into debt to finance infrastructure upgrades. That gives way to new development. The new development increases land value, and thus property tax revenue. And the new tax revenue pays off the debt.
This means, provided that the longer-term development happens, no existing public money is ultimately put to use. But it also means that at least some of the new revenues are diverted toward servicing the debt. Assembly Row in Somerville is an example of a development that used this type of financing.
Pointing to nearby growth around Broadway in South Boston and the new Ink Block development in the South End, Davey called Widett Circle’s redevelopment’s “almost inevitable,’’ with or without the Olympics.
“You can see the entire city converging…where Widett Circle is,’’ he said. “The salt pile and tow lot and some of the other uses today over there don’t comport with where the neighborhood is going or quite frankly where Boston is headed.’’
At some point before June 30, Boston 2024 plans to release new bidding documents, which Davey said will provide a clearer financing plan and specifics about the stadium site. He could not say a specific date before June 30 that the plan would come out.
Davey said it was possible the new plan may still include the tax increment financing idea at Widett Circle.
“Will it survive? It might,’’ he said. “But I think we have some other ideas as well. … We were well down the line of considering alternatives well before the brouhaha of the last 48 hours.’’
Widett Circle’s property owners include a co-operative of meat and seafood wholesalers (the neighborhood is named for the attorney who helped those companies move after they were forced out of Faneuil Hall due to development in the 1960s). The bidding documents suggest acquiring that land could cost $85 million, paid for through the tax increment financing plan. Earlier this week, a spokesperson for the co-op declined to tell Boston.com whether it had been approached about price.
Asked whether he regretted Boston 2024’s decision not to make the full bidding documents public sooner, Davey said: “All I can tell you is that we’re very much focused on having a much more transparent process. … One of the things Boston 2024, and I think frankly that the USOC, has learned is that for future bidding processes in the United States, the more transparency as early as possible, the better.’’
Davey had not yet been hired when Boston 2024 released the redacted documents in January, but he became CEO two days later.
Transparency has been of issue for Boston 2024 since it began bidding on the Olympics in earnest last year, and Davey has repeatedly pledged increased transparency since taking the job. So it came with some irony that Boston 2024’s full bidding document revealed that its edited version had removed a commitment to “clearly divide the costs between public and private expenditures.’’
Boston 2024 has partially attributed its failure to fully disclose bidding details earlier to the USOC’s processes.
Davey said the backlash to the secretness of the Boston 2024 effort has “given [the USOC] some pause and consideration for how they might run some bid processes in the future.’’
On June 29 and 30, the United States Olympic Committee will meet in California for its quarterly board meeting.
While a USOC member has said it is ’’no guarantee’’ the Boston bid will go forward to the international level, the committee has repeatedly denied that it is considering cutting the cord and going with another bidding city. (It has until September 15 before it must commit to Boston for the 2024 race.) But given the uncertainty around the bid to this point, its status figures to come up for discussion.
Davey said Boston 2024 will brief the board at the meeting, but that he doesn’t see it as “a make or break date for us.’’ He said the group is already working closely with USOC staff on the new venues and financing plan.