London's Olympic bet - news coverage by Nag Sayala as part of MBA Economics class presentation

1. London's Olympic Bet on Urban
Revival
R i l
Economic News Coverage based on Wall Street
Journal July 21‐22
Journal July 21 22
by Nag Sayala
July 2012
J l 2012

2. A long dream
London bids 7 years ago
Emerged challenges that weren't foreseen
• The global financial crisis
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• A double‐dip recession
• And the prolonged euro crisis
And the prolonged euro crisis
Urban revival to play out over two decades

3. East London
• East London districts around the Olympic Park, has
significantly higher unemployment than in London overall.
significantly higher unemployment than in London overall
• For generations, it has been an entry point for immigrants.
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• During the 19th century, its docks handled goods from
across the British Empire. Then manufacturing took hold.

4. London spends on..
$14.5B
 75% to regenerate East London ‐ one of
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the city's poorest parts.
 New 11K homes
 2K temp 8K permanent jobs
 New Olympic stadium in 250 acres
 New rail line that will eventually link East
New rail line that will eventually link East
London with the city's more affluent center
and west.

5. Lessons from the past
• 2000 Sydney's Olympic Park considered an
2000 Sydney s Olympic Park considered an
white elephant
• 2004 Athens Games and 2008 Beijing Games
2004 Athens Games and 2008 Beijing Games
facilities sit unused
• F
From 1992 Olympics, Barcelona, did manage
1992 Ol i B l did
to breathe new life into a rundown
neighborhood, but it took some 20 years
i hb h d b i k 20

6. Strategy
Re‐use infrastructure Job creation Affordable housing
• Sets up committee to focus on "legacy" three years ago
‐ no other host city had done.
• Designed venues that can be adapted for smaller
numbers.
• Athletes Village transforms into 2,800 apartments.
Athletes Village transforms into 2,800 apartments.
• Use temporary infrastructures; dismantle afterwards
• 2K temporary and 8K permanent Jobs
• 35% of 11,000k housing units are affordable.
• 91K sq. ft. press center to office buildings
• Improved public infrastructure to attract new buyers
Improved public infrastructure to attract new buyers

7. Fish Island – micro level bet
• £500,000 for restaurant; £1 million to convert
canal‐front wasteland into corporate
lf t t l di t t
entertainment space
• Successful in securing site 100 meters close
"There is this view that the Olympics will arrive in the U.K. and
shower everyone with gold..
It just doesn t work like that..
It just doesn't work like that ”
Lance Foreman, owner of H. Foreman & Son

8. Lets see..
It’s too early to measure the success.
Some setbacks:
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•Unemployment went up
from 5.8% to 6.5% and
•“No discernible effect”
‐Citigroup Inc.
‐Citigroup Inc
•Some local people are
upset with relocation.
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Yet to see if the East London and banks of Thames River
witness the anticipated growth. It’s a million dollar question.

9. Questions?
• Contact @ NagSayala@yahoo com
Contact @ NagSayala@yahoo.com