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Barter economics of London Games

London, July 29: Most visitors to the London Games will arrive at the Olympic complex and find a rather inhospitable two-word greeting: Fat Face.

This is not an insult, or even a hint that, hey, burning a few calories of your own wouldn’t hurt. It is the name of a British clothing chain in a prized and prominent corner of Westfield Stratford City, a gigantic mall that sits at the entrance of the Olympic park.

About two-thirds of the crowds expected at the Games will be funnelled directly to Westfield Stratford’s front door. These visitors do not have to enter the mall to get to the Games, but they must walk past an outdoor section of it and a row of stores, the first of which is Fat Face.

This proximity of so much retail commerce to world-class athletic competition has some worried that the Olympics here will be remembered as a strange new hybrid of sports appreciation and consumerism gone wild. Or worse, the Mall Olympics.

The mall and the event grounds are so close and seamlessly connected that they could easily be confused for a single development. It is a bit like a museum where you cannot see the art without a stroll through the gift shop.

Except the gift shop in this case is 1.9 million square feet, with more than 300 stores, two food courts, a 14-lane bowling alley, a movie theatre and the largest casino in London.

“If they want to call it the Westfield Games — apart from the fact that the International Olympic Committee will be very upset — that’s fine with us,” John Burton, a Westfield executive, said.

In many ways these Olympics are, in fact, a public-private joint venture. Before the city won its bid to host the Games, Westfield had bought the land where the Olympic park was eventually built. The company’s plan was to construct Europe's largest urban mall as well as 5,000 apartments.

Once London got the nod, the organisers and Westfield began what Burton called a “complex barter”.

Westfield relinquished the rights to some of the land it had acquired to enable the construction of the Olympic Village by the Olympic Delivery Authority, the public entity formed to develop the sites and infrastructure for the Games; London paid for the Olympic Village, and an agreement was struck to share the cost of building major roads, bridges and utilities.

The ultimate and mutual goal was to regenerate one of the most economically depressed sections of London. The east London district of Stratford — which is not to be confused with Shakespeare’s hometown, Stratford-upon-Avon — sits in a borough called Newham, which has an unemployment rate of 14 per cent, about twice the London average.

“You can’t justify spending 6.7 billion pounds,” roughly $10.5 billion, “for a few weeks of games,” Ralph Luck of the development authority said. “You can only justify it if it has a long-term value. We are the first city to tell the IOC that we will deliver a firm economic legacy.”

London certainly is not the first host city to promise an economic lift to its residents, but few have delivered on the promises. Some 2004 Olympic sites in Athens look like modern ruins, and many of Montreal’s 1976 facilities were long ago dismantled. Aside from the occasional opera, a few soccer tournaments and a steady flow of tourists, the Beijing National Stadium, the Bird’s Nest, is unused.

“The way that the IOC awards the Olympics makes it look like a beauty pageant,” said Roger Noll, a professor emeritus at Stanford University, who has written about the economics of the Games, “but the bidding is really about money, which typically means that the winner overpaid.

“The only way for cities to come out ahead is if they already have a huge infrastructure in place. If you have to build a lot, you're usually left with a whole bunch of useless structures for sports that are only of interest during the Olympics. There isn’t much need for a velodrome when the Games are over.”

 
 
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