By Jorge Casuso

October 4, 2024 -- The City Council on Tuesday will weigh "the benefits" and "honor" of hosting volleyball events at the 2028 Summer Olympics and the risk of losing $12.1 million.

At the study session, the Council will discuss a proposed Games Agreement that would "secure Santa Monica as a venue city and provide a framework for future, more detailed, agreements," City officials said.

The session allows the Council and public to "weigh in on the proposed deal points and the potential costs and benefits of moving forward,"
officials said.

But there are "potential financial and legal risks" that are not spelled out in the agreement the City has been negotiating for more than a year, according to a staff report from the City Manager's office.

"The exact scope of services or level of reimbursement is not defined in the Games Agreement," the staff report states, noting that three additional agreements would need to be negotiated.

As a result, the City would be required "to commit to providing services without understanding the required service levels or costs, which will be defined in subsequent agreements."

To gauge the financial risks, the City hired HR&A Advisors to conduct a fiscal impact study, which "forecasts that the City would be responsible for $15.54 million in estimated costs to prepare for and host the Olympic Games."

Hosting the games would "generate $2.79 million" more than the $10.65 million generated without hosting the games, but it would "face significantly higher costs."

"Overall, hosting beach volleyball could translate to a total net loss to the City of $12.1 million," the impact study found.

The benefits the City would reap include international exposure as "a fitting and historic stage" for a competitive sport that was born on the beach where the games would be hosted.

Hosting the games "would be a truly distinct honor for Santa Monica," whose "picturesque backdrop" would create "a visually stunning and unforgettable experience for athletes and spectators."

“There is no better place to host the competition for the 2028 Summer Olympics,” City Manager David White said in a statement this week.

“The city team has worked hard to negotiate a deal that works for Santa Monica, and the study session is a critical opportunity for the City Council and the public to provide input on what’s best for our unique community.”

The Council will be presented with three options during the study session -- execute the agreement, decline it or attempt to continue negotiating with LA28 Olympics.

In its report, the City Manager's office notes that the Council's decision "comes at a time when the City remains in a precarious financial situation" and faces "unprecedented liabilities."

The City is seeking to restore services, "address deferred infrastructure maintenance and $450 million in unfunded capital projects" and is facing the "impacts of inflation on city costs, and repayment of funds deferred from enterprise funds."

"All of this (is) exacerbated by significantly reduced general fund reserve levels and insufficient staffing," the report concluded.