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What the Games left behind

Making the most of our Olympic legacies
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There are few events in the world that require as much money or infrastructure to stage as an Olympic Games.

And what has been left behind in Whistler is a testament to the grandiose nature of the event and the inherited costs.

It may be years before we know if the main venues - the $119 million Whistler Sliding Centre and the $120 million Whistler Olympic Park - were worth the investment. What can be said is that business plans are being developed in the hopes of making the venues a valuable asset for the community.

Fortunately Whistler and other Sea to Sky communities don't have to support these venues entirely on their own. In 2007 the provincial and federal governments each kicked in $55 million to create the Games Operating Trust - a fund that supports various legacies to take over operations post-Games. The proceeds from that fund (or up to five per cent of the average balance of the fund for the year) are split 40/40/20, with 40 per cent going to Whistler 2010 Sport Legacies (W2010SL - a private not-for-profit created to own and manage Whistler's Olympic venues), 40 per cent going to the Richmond Olympic Oval, and 20 per cent going into a contingency.

Whistler's share of the fund for this season - summer of 2010 to summer of 2011 - was $2.2 million, although 43 per cent of that money reverted to the 2010 Vancouver Organizing Committee (VANOC), which operated the facilities until they were handed over to W2010SL in June.

That left the W2010SL with $1.2 million to operate both the Whistler Olympic Park and Whistler Sliding Centre - not nearly enough to cover operational costs. Keith Bennett, the president and CEO of the W2010SL, acknowledged as much when they received the funding last summer, but with the help of key stakeholders - federal and provincial governments, the Canadian Olympic Committee, the Canada Paralympic Committee - they are getting assistance through this crucial first season.

W2010SL has not released its budget for the season yet, but did share the following statement with Pique :

"Our next disbursement from the Legacy Endowment Fund is expected on June 1, 2011. Our partners have provided interim funding as Whistler Sport Legacies refines our Business Plan. Revenue from our public program are on target, which contributes towards offsetting organizational costs. Whistler Sport Legacies has no acquired debt. Our annual financial statements will be made available once approved by the Board at their next meeting."

Locally, the question has been asked: why is the split of Games Operating Trust (GOT), which manages the Legacy Endowment Fund, set at 40/40/20, split down the middle between W2010SL and the Richmond Olympic Oval - regardless of how much the legacies actually cost to operate?

Considering that the Richmond Olympic Oval has been converted from the sport for which it was intended - speed skating - into a multi-use community centre; and considering that the oval is intended to be the focal point of waterfront development that could include up to 14 residential towers at build-out, the question has been asked if it makes sense to continue to split the GOT proceeds the same way.

For one thing, the value of Whistler's facilities was higher to begin with, a total of $239 million versus the $178 million for the Richmond Olympic Oval.

Meanwhile, the Whistler Sliding Centre arguably has the highest operating cost of any venue, refrigerating every centimetre of the 1,450-metre track. That's as much ice surface area as four NHL-size skating rinks.

While W2010SL has high hopes for its public sliding programs - including the Skeleton Sport Experience Program that got underway on Feb. 16 - it will be tough, and most likely impossible, for the venue to ever cover its operating costs without annual funding from the Games Operating Trust.

It is also renting the sliding track start building for functions at $4,000 per day.

Asked how the split happened, and whether it could change in the future Jamie Bruce, Chair of the Games Operating Trust says: "The Trust was approached jointly by the venue owners, Richmond and VANOC/Whistler about an early fund division and they proposed the 40/40/20 split.

"After a review of business plan forecasts and presentations by both parties we agreed to the fund division. The fund division is irrevocable under the current terms of the Trust. The only step the Trust can take now would be to allocate all or part of the Contingency Fund balance (reported at $23.8 million in June 2010) among the two venue funds.

"For example, the most the Fund could do for Whistler would be to allocate the entire Contingency Fund to the Whistler Sliding Centre and Nordic Centre Fund."

While that sounds promising, the Contingency Fund has been closely guarded from the start - which is sensible given that it was created to maintain the legacy buildings and other assets over the long-term. For example, if a major repair were required to fix the roof at the Oval, then it would likely be drawn from the contingency.

The GOT does watch the venues closely and receives annual reports and operating budgets from the venue operators. The venues must also submit a request for a disbursement from the fund each year, and so far both W2010SL and Richmond Olympic Oval have requested the full allowable disbursement for the year - it is possible that Richmond could request less if member numbers continue to climb.

Pique attempted to contact the Richmond Olympic Oval in recent weeks, but did not receive a reply.

Currently there are 3,000 members at the Oval, double what was projected into 2011. The building expects to break even annually on its budget of between $8 million and $10 million. Other sources of funding include money from the municipality and sponsors.

The GOT itself is a volunteer board, with seats for the federal government, provincial government, Vancouver, Whistler, Richmond, the Canadian Olympic Committee, the Canada Paralympic Committee and VANOC. They make their financials public on an annual basis in late May or June, and do not report on real-time performance of the Trust's investments.

W2010SL would not comment on the GOT division of funds, and has not asked for any change to the funding formula.

 

Still a work in progress

The view of Whistler Valley from Keith Bennett's office at the Whistler Sliding Centre is stunning - at least the part that isn't obscured by a massive concrete cutout that was placed outside to give visitors an inside look at how sliding tracks are constructed.

With shoestring funding and $270 million in venues to operate (including the athletes centre), he knows that W2010SL has a hard job ahead.

"We've now owned the venues for eight months, so we've really been focused on transitioning the venues from being completely Games-focused and transitioned to what we're going to look like, and we're going to operate in the future," says Bennett. "It's been quite an accomplishment for a startup, especially when you inherit $270 million in assets. And it's been more than just transferring the assets, it's everything from transitioning vehicles from one company to another - which is challenging when you go from one non-profit to another - to signing leases, to transferring accounts for hydro, gas, telephones... rebuilding the computer networks and telephone systems.

"A lot of it was learning as we went, but we also hired some of the main people out of VANOC who were running the venues beforehand. The RMOW was also helpful in helping us transition our IT (information technology) systems.

"The focus now is running and understanding the business that we're in, and starting to build those businesses.... Budget is always an issue. It's always front of mind, and we're always very cautious."

As far as the Whistler Sliding Centre goes, Bennett acknowledges that it costs "a couple million bucks" a year to run the facility. The best-case scenario would be to earn revenues for public skeleton and bobsleigh around $1 million per year, while building clubs and other programs.

"We want to be in a place where everyone who comes to Whistler feels they have to go up and do it, skeleton or bobsled or both," says Bennett.

"That does two things: one, it raises the awareness level of the sports because once you've tried it and know what the athletes go through you can appreciate it a lot more. The second is that it will help us develop grass roots programs, because people who try the sports are more likely to get into them. We already have a pretty solid program of introducing kids to luge and skeleton that's been going about four years, and we're going to see those kids feeding into the national system."

Whistler Olympic Park is already a moderate success, with over 1,000 visitors a day during the Christmas holidays and on busy weekends.

"It's a fantastic new facility for the corridor and probably one of the most successful things they've done is bring the corridor together," says Bennett. "It's really a place where Whistler, Squamish and Pemberton locals and everybody in between spends time. There are kids there for jackrabbit programs, the parents are in programs, and it's been this real unifying element."

The Nordic industry is also well established and easier to understand, says Bennett. However, he says they've been committed to working with clubs to develop programs that make full use of the legacy - like programs for ski jumping and biathlon.

Biathlon is available seven days a week for a fee, whether you ski or not. Skate and classic ski lessons are also popular, and show the growth in popularity of Nordic skiing.

The challenge for Whistler Olympic Park, says Bennett, is filling the facility in between events.

"It's the same thing for everyone who runs these venues, but our weekends are healthy," says Bennett. "A lot does depend on the weather - on a beautiful sunny day, it's amazing how many come out. But a lot of people come every weekend, no matter what the weather is doing. I'm one of them."

Bennett is optimistic that the Olympic Park will one day cover its costs.

"When you look at the long term, like 20 years on the horizon, I don't think there's any doubt," he says. "My focus is really the next three or four years to make sure we're getting closer to covering our costs."

Bennett says W2010SL has been too busy assuming control of the legacies in the last eight months to develop a marketing program to build the legacies, and credited Tourism Whistler for assisting.

The Society is also responsible for the Athletes Centre in the Cheakamus neighbourhood though that facility gets no funding from the GOT.

"We've relied on word-of-mouth and casual marketing, and Tourism Whistler has been wonderful in pushing the whole Nordic skiing opportunity," says Bennett.

"Going into next year we're going to work on building that product and getting the word out more to Vancouver and the regional market. There are all sorts of wonderful ideas."

W210SL is a private not-for-profit that was created by various Games partners. There's a misconception that the organization is owned by the RMOW, but it's a completely separate entity that owns and manages facilities on land that is leased from the provincial government. The land, and the facilities, would revert to the Province if W210SL was unable to pay the bills - although with the GOT in place, the group is guaranteed some funding every year.

W2010SL has a board of directors from the RMOW, the province, the Canadian Olympic Committee, the Canada Paralympic Committee, the Squamish Nation, the Lil'wat Nation and VANOC - although VANOC is almost completely wound down at this point.

 

Legacies vs. Legacies

Everywhere the Games go they leave behind legacies: tangible things like roads, housing and sports venues that weren't there before.

While some of these legacies are disasters - Montreal's "Big O" stadium comes to mind at $1.61 billion over the 30 years it took to pay it off - others sow the seeds for future greatness. One example is the contribution that Calgary's Olympic venues from 1988 made towards Canada's success in the 2010 Games.

Given the length of time it takes to create a high performance athlete from scratch - around 10,000 hours, according to some sports experts, in addition to natural talent and parental support - one year out is far too early to judge the success of our physical legacies from 2010. And how do you measure the success of those legacies anyway?

Financially, it will take several years for Whistler's legacies to reach a comfortable place in terms of cost recovery and the number of users.

In terms of sport, athletes are arguably already benefiting in the short term. Witness the success of our sliding athletes in the 2010 Games, for example, with bobsleigh and skeleton athletes winning four medals for Canada.

Most teams continue to be based closed to Calgary where national centres were created after the 1988 Games, but some high performance athletes and development teams are quietly making the shift to venues in B.C.

Grassroots clubs are also springing up in Sea to Sky, but will take years to grow to the level where they're producing athletes. As for Canada's future success in the Games, some of the young athletes currently training at these venues aren't even in their teens yet, and won't be competing internationally for a long, long time.

Some things, like the actual economic impact of the $600 million Sea to Sky Highway Improvement Project or the potential economic impact of Bell's 144-strand fibre optic line linking Whistler to Vancouver, are also difficult to measure.

And while many of Whistler's legacies are sports-related, there are some other tangible benefits as well, like the conversion of the $161 million athletes' village into the resident-restricted Cheakamus Crossing neighbourhood; highway improvements from Function Junction to Lorimer Road; the construction of the Celebration Plaza; and agreements with the Province and First Nations that gave the resort land (including the day skier lots), extended the resort's boundaries and doubled Whistler's share of the taxes collected by local hotels.

Whistler's sport legacies are more challenging for many reasons. For one thing, the population of Sea to Sky is smaller, so venues don't have the built-in audience - or large community clubs and resources - as the venues in Richmond or Vancouver. For another, the venues cater to sports that aren't known for their numbers. Sliders in Canada currently number in the hundreds, compared to the untold millions of competitive and recreational hockey players, and figure skaters, that use hockey rinks. There are more than four million Canadians who cross-country ski, but far more people ski and snowboard on the coast - a busy day at Whistler Blackcomb could see 20,000-plus guests, while a busy day at Whistler Olympic Park is 1,000 skinny skiers.

The bottom line is that Games are expensive to produce, although in terms of total cost you have to give the edge to the Summer Games over their rosy-cheeked winter cousin.

For example, the London 2012 Games are priced at almost $15 billion Canadian dollars at this point, compared to the unofficial estimate of $6 billion for the Vancouver 2010 Games. It's proper to say "unofficial" because the official audited budget for the Vancouver Organizing Committee is $1.9 billion, although that figure does not include the Canada Line ($2 billion), Highway 99 upgrades ($600 million), the expansion of the Vancouver Convention Centre ($883 million), security ($900 million-plus) and various other expenses paid by the federal, province and municipal governments for everything from staff time to infrastructure.

 

The WinSport Example

W2010SL and the Richmond Olympic Oval have one ace up their sleeve when it comes to establishing meaningful and successful legacies, and that's the Canadian Winter Sport Institute, or WinSport - formerly known as the Calgary Olympic Development Association.

The group is tasked with managing the legacies of the 1988 Winter Games in Calgary, including the facilities at Canada Olympic Park and Canmore (sliding track, ski jump and ski jump training centre, speed skating oval, hockey rinks, Nordic skiing facilities at both venues, athlete housing complexes, summer and winter training centres, rehabilitation centres and more).

CODA was given $70.5 million of profits from the 1988 Games to operate the Olympic facilities (roughly $130 million when adjusted for inflation), and in the past 22 years the non-profit society has increased the value of that fund to $185 million. They also operate ski, snowboard and mountain bike facilities at Canada Olympic Park, which help to fund other WinSport programs.

Bennett says W2010SL maintains a close and complementary relationship with WinSport and other former host cities of the Games.

"The chair of our board is actually the director of sport at WinSport, and we've been working with them since our inception," he says. "We know all the people that run the Calgary facilities and spend a lot of time with them, and we've had summits with the people who manage both Park City (2002 Winter Games) and Lake Placid (1980).

"It's interesting. Each place has a similar mandate but a different mixture of funding sources and a different mixture of facilities. But all of our objectives are similar. It's about promoting sport, developing kids into athletes, developing people - not just into high performance, but also into good recreational athletes - giving people a chance to try the sports, to excel and have success at whatever level... It's promoting healthy living, providing venues for various international organizations for international competitions. And it's about promoting tourism, because each area has a tourism product to offer, and in that way it's also about boosting the local economy."

Bennett says the success of WinSport in maintaining Calgary's legacies is directly responsible for Canada's success in the 2010 Games, which can be summed up as 14 gold medals - the most won by any nation in a Winter Games - and a national record of 26 medals to rank third among nations.

"WinSport was really able to invest in developing athletes, and that's something we aspire to as well - rather than simply being a venue operator," says Bennett.

"We're really moving into the area where we will be making a real contribution to sport in Canada."

It is never smooth sailing when it comes to making a legacy work, even with a massive trust fund. CODA has had issues funding its legacies in the past, and several years ago they even considered phasing out the ski jumps because of maintenance and operational costs. Canada Olympic Park also has a huge following when the snow is good, but Calgary's weather is unpredictable and revenues can vary wildly.

 

The hidden legacy: our health

While it's easy to point to a building and say "legacy," there are some legacies that are difficult to express as simply - such as the ability of the Games to inspire people to become more active in sport, as well as to inspire future Olympians. In fact, that was one of the stated goals for hosting the Games from the start - it was the reason why 2010 Legacies Now was created to boost funding and support for amateur sport, as well as part of the reason why VANOC set out to complete Games' venues over two years early for the Games.

Last week the B.C. Sport Alliance - which consists of 2010 Legacies Now, the B.C. Games Society, Canadian Sport Centre Pacific and Sport B.C. - released a list of benefits from the Games. The list includes a growth in membership in provincial sport organizations, an increase in the number of B.C. athletes with national teams, increased sport volunteerism, more recognition of the power of sports when it comes to community building and preventative health care, and new sports facilities.

Funding for sports has also been increased, with the federal government chipping $30 million in the Own The Podium program every year, and increased funding from the province as well.

That money isn't viewed as a grant, but rather as an investment. By creating a national atmosphere for excellence in sports - one that results in medals at the Olympic level - our governments believe that Canadians will be inspired to get off the couch and get more involved themselves.

All the research shows that this approach actually works: kids get involved, parents get dragged along, families focus more on nutrition and group activities, and - this is the payoff - people become much healthier. Healthy people are more likely to get good grades, and less likely to get sick and miss work or school. They are less likely to contract a chronic disease or illnes like obesity, diabetes or heart disease. They're less likely to smoke, drink excessively, take drugs, get involved in crime, and/or to suffer from mental illnesses such as depression.

That would indeed be a worthy legacy of hosting the Games, albeit a hard one to measure.



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