Can Madrid really afford another Olympic bid?

I s it a gut feeling or just a matter of guts? Madrid has a dream, or at least its mayor does: to become an Olympic city. But Madrid is also the capital of a country in recession that's being pounded by the markets, with a jobless rate of around 20 percent, and whose regional governments are so broke that they cannot pay their suppliers.

In spite of all of that, Mayor Alberto Ruiz-Gallardón of the Popular Party (PP) wants his city to host the 2020 Summer Olympics. This is his third bid, and it is the first time that the other political parties are not mostly backing him up. For the first time, voices are being heard that are wondering if Madrid can really afford to organize the games. Where will it find the funding, and what will the benefits be? Is this really a priority right now?

Where will Madrid find the funding, and what will the benefits be?

The city lacks a stadium, an Olympic village and a water-sports center

"It's not that we don't want the Olympics, but this is not the right time"

Gallardón is aware that now is not the best time to be talking about spending. His speeches these days are peppered with the word "austerity." He has pledged not to spend a single euro on new infrastructure until 2013, when the International Olympic Committee decides on the winner. He says he can afford to do that, because 80 percent of the necessary facilities have already been built. Yet Madrid still lacks an Olympic stadium, a water-sports center and an Olympic village. And then there are the costs of the bid itself (trips, reports, promotional work and so on). Madrid spent 38 million euroson the last bid (which was eventually won by Rio de Janeiro), of which 21 million euroscame from private sponsors. But the crisis has hit everyone, businesses included, so the mayor no longer knows how much of the new bid would have to be financed with public money.

"The crisis should not necessarily dissuade the sponsors of the bid: there will be intelligent entrepreneurs who see the benefits of investing in businesses that could be important. Besides, let's hope that by 2020 the crisis will be far behind us," says Ferran Brunet, professor of applied economics at Barcelona's Autónoma University (UAB) and author of the economic impact studies of the 1992 Barcelona Games, as well as an advisor for London 2012 and Rio 2016.

Most of the reports that Brunet handles talk about the benefits for the host cities. In Madrid's case, Brunet holds that "the returns will only be positive, and could be very large indeed. Even in the worst-case scenario - if a positive decision for Madrid is delayed once again - the bid itself will have its benefits, which are not only tangible. "The intangible benefits relating to greater visibility for Madrid [...] could be important. In a context of global competition, it is key to place Madrid among the creative regions of the world."

The Olympic Games pay for themselves, experts agree. Or at least for the organizational side: private sponsorship, ticket sales and TV broadcast rights cover the running of the games. But investment and infrastructure are another story, and that's where it's important to do things properly.

"Public investment must always be made with the use of facilities after the games in mind," says Miquel Benosa, coordinator of the Center for Olympic Studies at UAB. "That is where some cities failed badly, like Athens, which was a fiasco, and in a way Beijing, with the Bird's Nest stadium. They made investments that did not correspond to later needs." Even then, Benosa claims that "the Games must be considered an investment, not an expense."

And it's also important to consider the future. The final benefits cannot be calculated at the close of the Games, experts insist. Madrid officials figure that hosting the event would bring in between 1.5 and two million new tourists. A year before the Games, and during the following five years, the rise in tourism would represent 2.5 billion eurosand create 35,000 jobs.

"Giving a city the Olympic Games means putting its name on everyone's lips," says Jaime Lissavetzky, the former secretary of state for sports and the Socialist spokesman at Madrid city council.

For proof of that, just ask Barcelona. "It put us on the map, opened the city up to the sea [through construction work to make the port area more accessible], we became more balanced in terms of territory and mobility, and brought forgotten neighborhoods back from oblivion," says Enric Truñó, commissioner for the Barcelona-Pirineos bid for the Winter Games of 2022, and former sports councilor for Barcelona before and after the 1992 Games. "For Barcelona, it was key to grab the chance. I don't know if Madrid, a more complete city, needs it as much, but London has also benefited. It's not just the physical construction of the city, but also the brand. Barcelona is perceived much more positively abroad than here, and it owes that to the Games."

Madrid is already on the map. The Spanish capital has undergone a major renewal of its infrastructure: it modernized and expanded the airport, buried the M-30 beltway underground, cleaned up the Manzanares river and built an eight-kilometer long park along its banks... It has already spent a lot of money. And that is why Madrid is the most indebted city in Spain, owing 7 billion euros, almost as much as all the other provincial capitals put together.

"If all the billions of euros they spent moving the M-30 underground, plus the billions they plan to spend on the Games, had been spent on social infrastructure for neighborhoods that lack it or are very deficient, then Madrid really would have changed," reads a manifesto by five neighborhood associations south of the capital. The title of the document is "It's not a priority."

Similar views are held by the leftist coalition United Left (IU), which is reluctant to give Gallardón its support like it did on the two previous occasions. Unión Progreso y Democracia, a moderate party that won its first seats in the Madrid council in last May's elections, has taken a clear stand against the initiative. "It's not that we don't want the Olympic Games, it's just that this is not the right time. Spain has more important problems that need our energy, efforts and money right now," said party spokesman David Ortega.

So Gallardón not only needs to convince the 100 or so voting members of the IOC; this time, he also needs to convince his own fellow citizens. Madrileños showed their support for the mayor in May, when they re-elected him, and the PP and Lissavetzky's Socialists combined make up 80 percent of the council. But the Olympic Games were not part of the campaign promises.

Then again, the mayor of Madrid is not the only one facing criticism from his people. The crisis has also hit London 2012. Last March, as the first tickets went on sale, a weekly publication launched an ad campaign in the subway system titled "Organizing the Games is a waste of money."

As in London, the debate in Madrid is spreading beyond politics. The federation of neighborhood associations is criticizing the mayor, saying that residents' needs should come before major public works, especially at a time of crisis. The environmental group Ecologistas en Acción is also opposed: "The executive should focus its efforts and public money on ensuring basic citizen services are covered. And that's without forgetting another priority: reducing air pollution," says a spokesperson. Last year, Madrid exceeded the nitrogen dioxide levels allowed by the European Union, and will have to ask for a moratorium.

The criticism is nothing new. When Gallardón put together his 2016 bid, nearly 2,000 citizens from different walks of life signed a petition to have it officially audited. The document demanded to know "how much this new megalomaniac waste will cost." The economist and statistician José Manuel Naredo, who teaches at the Madrid School of Architecture, was one of the people who added his name to the petition. "A decision of such import requires information, transparency and a referendum," he says. "You need to consult with the citizens, and find out what their priorities are. After the May 15 [citizen protest movement] one cannot keep making decisions that take the people for granted." And, he notes, there has been no audit so far.

Others consider, as Gallardón does, that the Games are a chance at economic growth, job creation and international exposure, and that such an opportunity cannot be wasted. The mayor and several voices in the world of sports are convinced that the third attempt will be successful. "I couldn't sleep with a clear conscience if I were to say no," says Lissavetzky. The architect José María Ezquiaga, winner of the 2005 national city planning prize, also believes that the Olympic dream represents a chance to finally address the challenges of the future for the city. He foresees a greener, more sustainable Madrid, one that is less hostile to pedestrians and with a revitalized historic center. And he thinks that the Games would be the ultimate push towards that.

"You have to make the most out of the infrastructure and at the same time plan a city that is not associated with emblematic projects or large stadiums, but which is friendly and close to the people."