Six Months Later, There’s An Olympic-Size Debt To Pay
BARCELONA, Spain (AP) _ Six months after the summer Olympic Games ended on a dazzling high note, the host city suffers from a nagging hangover.
No one disputes the fact that the games were probably the most successful ever held. The Barcelona Olympic Organizing Committee closed its books with a modest $3 million profit.
But that’s just a small part of the story, since the games themselves accounted for just 9.4 percent of the $9.3 billion spent by government agencies and private investors to ready Barcelona for the extravaganza.
But now it’s time to pay the bills, and in a period of bankruptcies, rising taxes and record unemployment, residents are grumbling.
″We people of Barcelona are left behind paying for this new Olympic image for a long time. There’s massive uncertainty regarding Barcelona’s future,″ said Albert Recio, professor of economics at Barcelona’s Autonomous University.
Local officials are asking residents of Spain’s second city for patience.
″The games were a total success,″ said Deputy Mayor Josep Vergara. ″We are in the first year of the post-Olympic phase, and we will pay for the costs gradually. We need citizens to have a historical memory, a long-term perspective.″
The city of Barcelona and the regional government of Catalunya are scheduled to pay off their $2.1 billion of combined debt by 2010. The $4 billion in public debt, also to be paid by 2010, has been assumed by Spain’s central government and other public agencies.
The private sector invested about $3.2 billion and the public sector put up $6.1 billion to bankroll extensive urban renewal projects, including new roads, an airport renovation and the reclamation of industrial slums on the city’s waterfront.
To help pay down the debt, authorities hiked a local business tax by 30 percent several months ago. That prompted a demonstration by more than 5,000 irate merchants in front of city hall.
The Olympic debt looms large at a time of worldwide recession and high interest rates.
Unemployment in Barcelona, which fell dramatically from about 19 to nine precent during the Olympic preparaton period, is rising steadily. The rate in the four-province region of Catalunya now stands at 12 percent, although that is lower than the national rate of 20 percent.
Meanwhile, prices in Catalunya last fall rose 1.6 percent - nearly double the 0.9 percent increase registered in Spain as a whole and 16 times greater than the 0.1 percent registered in France in the same period.
Such indicators are not lost on the investors Barcelona Olympic boosters hoped to attract. According to a study by The Harris Research Center in London, Barcelona fell from eighth to 13th place in the 1992 ranking of preferred European cities for new business ventures because of steadily rising costs.
The city’s decline is reflected in Barcelona’s stagnant real estate market, where several high-profile projects have stalled.
The Olympic Village, touted as the hottest real estate in town when some 9,000 athletes cleared out, is now a shuttered ghost town. All but 25 of the 2,012 apartments are empty. Municipal red tape and financial disputes are blamed for failure to achieve full occupancy by January.
And, although one 44-story office tower at the village has found tenants, construction on its twin - the Hotel Arts Barcelona - has been paralyzed since October when its builders declared bankruptcy.
Conservative opposition leader Josep Maria Cullell, who has run unsuccessfully for mayor against Socialist Pasqual Maragall, says the skyscraper may be only the tip of Barcelona’s Olympic problems.
The recession and the soaring cost of doing business in Barcelona have dashed Olympic dreams. The Bank of Spain estimated that economic growth in Spain this year will be about 1 percent - the lowest in 10 years and a far cry from the dazzling 4 percent Spain enjoyed each year from 1986 to 1991.