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Second Winter Olympics could boost Utah’s economic output by .6 billion, new report says
Second Winter Olympics could boost Utah’s economic output by .6 billion, new report says

SALT LAKE CITY — Utah finished its first Winter Olympics with a surplus of $163 million and established a $76 million endowment to maintain key facilities from 2002.

That decision from two decades ago means Utah won’t have to build new facilities for the 2034 Winter Olympics and Paralympics, lowering the cost of hosting the games. But it also means the economic benefits of the games could be slightly less than they were for the 2002 event, according to a new report outlining the economic impact.

Hosting the Winter Games again in 2034 is expected to generate total economic output of $6.6 billion over the next decade, according to a report released Wednesday by the University of Utah’s Kem C. Gardner Policy Institute.

“These numbers are just incredible,” said Brett Hopkins, chief financial officer and chief operating officer of the Salt Lake City-Utah Committee for the Games, during a panel discussion on the report hosted by the university.

Salt Lake City is not yet officially hosting the 2034 Olympic Games. A delegation from Utah will travel to Paris later this month to voice its opinion before the International Olympic Committee votes on July 24.

If Utah hosts the games and this forecast is correct, economic output would be slightly lower than when Salt Lake City first hosted the Winter Olympics. John Downen, senior researcher at the Gardner Policy Institute and author of the report, noted that the 2002 Winter Olympics generated about $7.5 billion in economic output when the final figures are adjusted for 2023 inflation.

That’s because Utah had to build numerous new facilities to host all of the events, which introduced many variables into production, Downen explained.

The cost of hosting the event has fluctuated in recent years. Hopkins said the budget has been revised dozens of times, but the Gardner Policy Institute report puts the cost at about $4.1 billion when including direct expenses and the division of copyright revenue.

However, the report indicates a much lower investment requirement than in 2002. For example, the report notes that only about $31.2 million is budgeted for investments in 2034. In comparison, $286.7 million (in 2023 dollars) was earmarked for investments in facilities ahead of the 2002 Games.

“We’re glad we don’t have to spend as much as we did in 2002, only to find that it’s lowering the return on investment in our calculations,” Hopkins joked after learning the results. “It’s going to be very exciting because it’s going to be this mix of past experience and yet new challenges.”

Gardner Institute Director Natalie Gochnour moderates a panel discussion on “Potential Economic Impacts of the 2034 Olympic and Paralympic Games” with John Downen, senior research associate of the Kem C. Gardner Policy Institute, Brett Hopkins, CFO/COO of the Salt Lake City-Utah Committee for the Games, Catherine Raney Norman, chair of the Salt Lake City-Utah Committee for the Games, and Colin Hilton, CEO of the Utah Olympic Legacy Foundation, at the Kem C. Gardner Policy Institute Newsmaker Breakfast hosted by the Kem C. Gardner Institute in Salt Lake City on Wednesday.
Gardner Institute Director Natalie Gochnour moderates a panel discussion on “Potential Economic Impact of the 2034 Olympic and Paralympic Games” with John Downen, senior research fellow at the Kem C. Gardner Policy Institute, Brett Hopkins, CFO/COO of the Salt Lake City-Utah Committee for the Games, Catherine Raney Norman, chair of the Salt Lake City-Utah Committee for the Games, and Colin Hilton, CEO of the Utah Olympic Legacy Foundation, at the Kem C. Gardner Policy Institute Newsmaker Breakfast hosted by the Kem C. Gardner Institute in Salt Lake City on Wednesday. (Photo: Kristin Murphy, Deseret News)

The report focuses only on spending by the Salt Lake City-Utah Committee for the Games. It does not include Smith Entertainment Group’s massive plan to redevelop the Delta Center – a proposed Olympic venue – and build a neighborhood around it. If approved, the company could issue up to $900 million in bonds that can be repaid with public funds. Executives say they also plan to spend at least $3 billion on the project.

Some numbers provide insight into the projected economic impact. The institute estimates that the event will generate $4.1 billion in total direct spending between 2024 and 2035, but about $1.5 billion of that will be lost because out-of-state businesses will pocket the spending, skiing will no longer attract as many visitors, and other negative impacts.

That leaves about $2.6 billion in net direct spending in the state, which is expected to generate $3.9 billion in gross domestic product for Utah and 42,000 work years – the total number of work years generated by everything related to the games. All of that adds up to $6.6 billion in output, or the value of all goods and services related to the event over the next decade.

Other factors and impacts

But a lot can happen in the next decade that could throw off the numbers. A study from Oxford University published this year found that nearly every Olympic host in modern history, including Salt Lake City in 2002, has struggled with budget overruns. However, the study found that Utah’s budget overrun in 2002 was far smaller than most other hosts in recent history.

The study also points out that the average cost of hosting the Winter Olympics is around $4.15 billion (adjusted for 2022 costs), which is not far from the estimated cost of the 2034 Winter Olympics.

Hopkins agrees that there are risks that could jeopardize all previous plans for 2034, including extreme weather events or another pandemic.

“The risk – at the moment anyway – is that our plan is only on paper. We have to put it into action,” he said, later adding that he was “confident” that the committee would stick to its planned budget.

Meanwhile, the Games could ultimately have other impacts as well. Colin Hilton, CEO of the Utah Olympic Legacy Foundation, said the event could bring new growth challenges, including more traffic in Utah’s canyons, more air quality concerns along the Wasatch Front and traffic problems in growing communities near the host cities.

He also believes it could provide new resources to address these challenges, similar to how the Utah Transit Authority’s TRAX service was created in advance of the 2002 Games.

“I think the Games can be a catalyst that helps,” he said. “My goal would be that even those who are not interested in winter sports and the Olympics can say at the end of 2034, ‘At least the Games contributed to these certain benefits for the community.'”

By Isla