Report: Boston 2024 underestimated Olympic construction costs by nearly $1 billion

Hosting the Olympics in Boston would have put taxpayers at significant risk and cost about $1 billion more in construction than organizers said it would.

This according to a much-anticipated report from The Brattle Group released Tuesday. State leaders tapped the consultants to study the bid earlier this year, before the city’s run at hosting the Summer Games came to an end in late July.

Boston 2024, the group charged with promoting and planning the games, had been overly optimistic in its cost estimate for construction projects, the report’s authors concluded, to the tune of an estimated $970 million. That’s on top of the $918 million Boston 2024 originally budgeted to build facilities.

Boston 2024 disputed many of the Brattle Group’s findings in a statement released early Tuesday evening, claiming to have “identified several misrepresentations and/or errors within the report” and saying comparisons to costly bids in other cities were unfair.

But according to the report’s authors, the risks to taxpayers and were many, despite organizers’ claims that the state would not have to shoulder the cost of the games. Could the city count on private developers to pay hefty construction costs? Would infrastructure projects go over budget?

Too much was uncertain, Gov. Charlie Baker said in a press conference Tuesday afternoon.

“We did not want the taxpayers … to be on the hook for an undefined and unknowable price tag,” Baker said. “At this time I would not have been able or willing to provide the guarantees the USOC was looking for.”

The Brattle Group came to many conclusions that differed from Boston 2024’s, particularly when it came to infrastructure.

Power and signal upgrades for the MBTA might have cost $1.1-$1.3 billion more than Boston 2024 thought, the report found, and moving a bus facility out of Widett Circle to make way for the proposed Olympic Stadium – and, later, a new mixed-use neighborhood dubbed “Midtown” – could have cost $140 – $240 million more than Boston 2024’s estimates.

“Indeed,” the report reads, “if potential problems with relocating the facility could not have been resolved, the entire Midtown development project could have become infeasible.”

Other costs, among them the amounts budgeted for contingencies, were low by industry standards, according to the study’s authors. Boston 2024 also disputed this claim in its Tuesday statement.

Speaking to reporters, Baker did not condemn Boston 2024 and its bid. Instead, he praised the group’s efforts and lamented the short amount of time organizers had to plan.

“I think they did, in five or six weeks, an incredible amount of work,” he said. “When you’re talking about a 10-year project with expenses and revenues that ranged somewhere between $4 and $6 billion, that’s a heck of a lot of stuff to squeeze into a fairly narrow window.”

With more time, Baker said he believed the group might have been able to fine-tune the bid and address concerns.

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No Boston Olympics, meanwhile, were less charitable to bid organizers. For the group, which this year waged a campaign in opposition to the bid, the report was more evidence they were right all along.

“This independent analysis completed by experts hired by the state confirms that Boston 2024 was a risky deal for taxpayers,” the organization said in a statement. “The healthy skepticism expressed by voters and leaders in the State House was warranted. Massachusetts dodged a bullet.”