Rio de Janeiro wins out as host of 2016 Olympics

Rio will be the first South American city to host the Games. Chicago's loss is a disappointment to President Obama, who traveled to Copenhagen to promote the US bid.

Silvia Izquierdo/AP
Rio de Janeiro's Copacabana beach celebrates after the city won the nomination Friday to host the 2016 Olympic Games.

Swaying International Olympic Committee votes with the argument that South America has never hosted an Olympic games before, Brazil's sun-drenched Rio de Janeiro was awarded the 2016 Summer Olympics, holding out against last-minute lobbying by President Barack Obama for his adopted home city of Chicago.

Tens of thousands of ecstatic Brazilians, crowded along the city's famed Copacabana beach, erupted in cheers and dancing when the news was announced shortly before 1 p.m. local time, even as crowds in Chicago and the other defeated cities, Madrid and Tokyo, trudged home in disappointment.

The announcement by IOC President Jacques Rogge in Copenhagen came after days of intense lobbying from the likes of Mr. Obama, the Spanish royal family, and the new Prime Minister of Japan, Yukio Hatoyama. In the Brazilian corner were President Luiz Inacio Lula da Silva and soccer great and global sports icon Pele, who borrowed Obama's campaign catch phrase, "yes we can," in their successful effort to sway voters.

Now Africa is the only inhabited continent not to have been awarded an Olympic games (Antarctica, presumably, will have to wait at the back of the line).

With the decision made and Brazil already slated to host the 2014 World Cup, now comes the hard work of renovating old stadiums and infrastructure and building new facilities in a program of spending that the Brazilian government expects will top $14 billion.

Where that money will come from, and whether the benefits will outweigh the costs, is now on some Brazilian's minds.

Olympian costs

The country has suffered along with the rest of the world in the current global recession, but is also bringing on-line rich new oil and gas deposits off its coast.

Rio officials predict that for every Brazilian real spent, three times that much will return in tourism and other investments.

But Rio has had trouble controlling costs in the recent past. The city with a reputation as a Brazilian playground, thought blighted by crime and corruption, hosted the Pan American Games in 2007. While the event itself came off well, spending ballooned to six times the original budget, prompting critics to question the seriousness of organizers.

"I think we have no reason to trust the promises that are being made, and no reason to believe that any legacy will be left," said Juca Kfouri, a newspaper columnist and long-time critic of Brazil's sports administrators. "It [will] be a hemorrhage of public money, just as with the Pan American Games."

The Olympic Games' operating budget was set at $2.82 billion, with another $11.1 billion going toward projects to modernize and prepare the city for the event. More than $5 billion is set aside for transport alone.    

Rarely on budget

If Rio brings in the Summer Olympics near cost, that will be first time that has happened in a long time. The Athens Olympics were originally budgeted at $1.5 billion. Actual cost? $16 billion.

Beijing, too, promised a summer Olympics for less than $2 billion. The real cost in that case has been estimated at more than $30 billion.

Montreal, which hosted the Olympic Games in 1978, was left with a financial hole in the city's budget that wasn't closed until 2005, according to economists Andrew Zimbalist and Brad Humphreys. In a paper on the economic benefits of the Games, they write: "Our review of the existing peer-reviewed evidence on the economic impact of the Olympic Games reveals relatively little evidence that hosting the Games produces significant economic benefits for the host city or region."

But prestige is, of course, hard to quantify, and President da Silva has been seeking to increase Brazil's global diplomatic and economic profile.

Rio plans to use 33 venues, including four soccer stadiums in other cities. It promised to renovate eight existing facilities, one of which will serve as the main track and field venue. Another 11 permanent venues are to be built especially for judo, wrestling, fencing, basketball, taekwondo, tennis, handball, modern pentathlon, swimming and synchronized swimming, canoe and kayak slaloms, and BMX cycling. A further 11 temporary structures will be constructed for sports like weightlifting, beach volleyball, and field hockey.

The IOC lauded the Brazilian bid, but prior to the vote also raised concerns over security and accommodation. The IOC report said Rio was reducing crime and increasing public safety but noted that Rio is by far the most violent of the four bid cities.

There is also a curious lack of hotel rooms in a city known as a tourist mecca. Rio promised to add 25,000 new beds between now and 2016 and said it would make up any shortfall by offering 8,500 beds on docked cruise ships.

Dan Murphy reported from Boston.

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