CHAPTER 1

INTRODUCTION

The Denver Organizing Committee for the 1976 Winter Olympics, Inc. (DOC), and the city and county of Denver have requested a direct Federal appropriation of $19.9 million to assist in financing the winter Olympic games to be held in Denver, Colorado, during February 1976. Legislation is pending before the House Committee on Interior and Insular Affairs (H.R. 14597) which would authorize Federal appropriations to the Secretary of the Interior to provide such financial support.

At the request of the Chairman, House Committee on Interior and Insular Affairs, dated April 28, 1972 (see app. I), we reviewed the plans developed for staging the 1976 winter Olympic games in Colorado. In accordance with the request and subsequent discussions with the Chairman, we examined the following matters which are discussed in this report.

--The planning for needed facilities, including proposed Federal and non-Federal funding and the nature, site locations, and potential for use of the proposed facilities after the games.

--The proposed operating budget for staging the games, exclusive of the budget for land acquisition and construction of facilities.

--The financing of planning activities conducted through May 1972, including the sources of the income received and the nature of the expenditures incurred.

--The accountability for funds provided for the games.

--Other possible Federal assistance.

--The environmental impact of the construction and use of facilities for the games.

Our report also includes comments on matters we believe should be considered by the Committee.

We made our review at the office of DOC in Denver and at headquarters and field offices of the Departments of the Interior, Defense, Agriculture, Housing and Urban Development, and Transportation. We also reviewed records and interviewed officials of the State of Colorado and the city and county of Denver.

NATURE OF THE WINTER GAMES

International Olympic Committee (IOC) regulations state that the winter Olympic games may include biathlon, bobsledding, luge, skating, ice hockey, and skiing. In each sport the events are governed by the technical rules of the responsible international sports federation.

The biathlon is a paramilitary sport for men that combines tests of stamina at distance skiing while carrying a weapon with ability and steadiness to shoot accurately under the dual stresses of time and fatigue.

Bobsledding is a men's sport practiced on two- and four-man heavy metal, steerable sleds with two sets of runners. Luge is a contest for both men and women that uses lighter weight sleds, with single sets of runners, steered by the shifting of the contestants' weights.

The skating events include figure and speed skating and ice hockey. Skiing includes events in cross-country, downhill, and slalom skiing, as well as ski jumping. A combination of cross-country skiing and 70-meter ski jumping is generally referred to as nordic skiing. The downhill and slalom events are referred to as alpine skiing.

DOC planned to hold contests in all these sports, except the four-man bobsled event which was subject to final negotiation with IOC.

SPONSORING ORGANIZATIONS

On May 12, 1970, IOC designated the city of Denver as the host for the XII winter Olympic games. The selection of Denver culminated several years of effort by individuals and groups, primarily the Colorado Olympic Commission, Inc. (COC, Inc.), and DOC.

COC, Inc., was incorporated on November 23, 1965, as a nonprofit corporation to study the feasibility of holding the winter Olympic games in Colorado. COC, Inc., functioned as an agency of the State. After the selection of the city of Denver as the host for the 1976 winter games, COC, Inc., was dissolved in June 1971 because it had accomplished its purpose. At that time its assets and liabilities were transferred to DOC.

DOC was incorporated on April 6, 1967, as a nonprofit corporation to plan and secure the selection of the city of Denver as the site for the 1976 winter games. DOC has functioned as an agency of the city and county of Denver. On November 25, 1970, the certificate of incorporation of DOC was amended to provide for planning, staging, and conducting the 1976 winter games. The DOC board of directors consists of 27 members who, with the exception of the president, serve without compensation. As of June 19, 1972, DOC had a staff of 16 salaried employees.

Effective July 1, 1971, the Colorado General Assembly created the Colorado Olympics Commission (COC) to provide a focal point for the State's involvement in the games. COC comprises 11 unpaid members appointed by the Governor; it has no paid staff.

The mayor of Denver has designated an Olympic coordinator to administer the city's activities with respect to the games. The Olympic coordinator has no staff; however, he is able to draw on existing city personnel for his needs.

CHAPTER 2

FACILITIES PLANNING AND FUNDING

As of June 26, 1972, DOC estimated that about $67.1 million would be required to construct and improve all facilities associated with the 1976 winter games, except for the facilities for alpine skiing which were to be privately developed. DOC classified the facilities under three categories, according to the degree of need for the facilities: minimum essential ($23.4 million), highly desirable ($28.8 million), and desirable ($14.9 million). (See app. II for a listing of planned facilities and improvements by degree of need.)

DOC planned to finance the facilities and improvements through existing Federal programs, city of Denver bond issues, contributions from private enterprise and foundations, incomes from television contracts, and a Federal appropriation of $19.9 million. DOC had requested this appropriation primarily for minimum essential facilities for five of the sports events to be conducted in the games.

MINIMUM ESSENTIAL FACILITIES

DOC considered the following facilities to be critical to the conduct of the games and without which the games could not be held.

Sports facilities

In its capital budget request for Federal financial assistance, DOC stated that the nature of the new sports facilities precluded the possibility of private financing because the revenue potential of the facilities when used for commercial purposes after the games was insufficient to attract investment capital. Break-even analyses prepared by consultants for DOC showed that, although each of the sports facilities had a revenue-producing potential after the games, the probability that revenues would be sufficient to cover more than cash operating expenses was remote.

DOC planned to use the $17.5 million requested for the sports facilities as follows:

The estimated construction costs of the facilities were projected at 1971 prices, and the $2 million reserve for cost increases was intended to provide for a 5.5-percent inflation increase per year. The estimated construction costs also included $1.3 million for possible cost increases due to architectural and engineering (A&E) design changes and possible site changes.

The cost estimate for the bobsled-luge run was based on the actual construction cost, expressed in 1971 dollars, of a similar facility in Germany. The cost estimate for the speed-skating arena was based on very preliminary A&E studies prepared only to arrive at a capital budget. The cost estimates for the ski jumps, nordic skiing facilities,