Los Angeles officials have reached a tentative deal with organizers of the 2028 Olympic Games that set the stage for returning the city to hundreds of millions of dollars in public works.
The deal, which still needs to be approved by Mayor Karen Bass and the City Council, would require the privately held Olympic organizing committee LA28 to provide the city with upfront funding to cover services that are not eligible for federal reimbursement, such as traffic control and waste disposal.
Both sides will take a different approach to police protection in high-security areas. Under the proposed plan, the city would seek reimbursement from the federal government for security costs in those areas, said City Administrative Officer Matt Szabo, who is the city’s chief liaison.
If the federal government doesn’t provide full reimbursement for those safety costs, the city will seek LA28 emergency funds to cover the difference, Szabo said.
“This agreement ensures that the 2028 Games will have the necessary resources for the City to be safe and successful, while protecting taxpayers from footing the bill,” he said in a statement.
Paul Krekorian, executive director of Bass’ Office of Major Events, praised the deal.
“What’s important to Mayor Bass is that the 2028 Olympic and Paralympic games are fiscally responsible, protect taxpayers, and benefit Angelenos for decades to come,” he said. “This agreement helps fulfill that commitment.”
Negotiations between the city and LA28 have played out behind closed doors for the past year, as critics have grown to voice the possibility that taxpayers could face huge payouts if the Games fail to turn a profit. If the promoters suffer a significant loss, the city could be at risk of the first $270 million and possibly more after that.
Szabo agreed that under that scenario, the city would be very unlikely to recoup all of its security costs if the federal government failed to provide full reimbursement.
Under the agreement finalized in 2021, the planning committee must reimburse the city for any services beyond what would be provided on a typical day at various locations, including parts of downtown LA, Exposition Park, Venice and other locations.
President Trump’s “One Big Beautiful Bill” included $1 billion in defense, planning and other costs related to the Olympics. Still, some elected officials have expressed fears that the money may not materialize once the Games are over, or that the city’s security costs may exceed that amount.
The proposed agreement, known as the Enhanced City Resources Master Agreement, goes before the council’s ad hoc committee on the Olympic Games on Tuesday, then to the full council.
Even with an agreement, many details about taxpayer services during the Olympics and Paralympics will remain unresolved for at least a year.
The two sides still must finalize agreements outlining the services to be provided at each location by July 2027. They must also agree on the cost of those services by Oct. 31 of the same year.
According to a summary of the agreement released by the city on Friday, Los Angeles International Airport, the Port of Los Angeles and the Department of Water and Power will need to execute their service agreements with LA28.
LA28 and the city were supposed to have an agreement in place last fall. Negotiations dragged on for an additional nine months, largely because of “the inherent complexity of the 2028 Games,” Szabo said in a memo he co-wrote with Sharon Tso, the city’s senior legal analyst.
Under the terms of the 2021 agreement, LA28 must create a $270-million contingency fund that can be distributed as surplus if the Games make money, or used to cover any losses in the event of a deficit.
The proposal presented on Friday seeks to amend the five-year agreement established to ensure that those emergency funds can be used to cover city expenses in the event that other funds are not sufficient to cover certain city services provided during the Games.
Money from that emergency fund will be distributed to the city only after LA28 pays its expenses, according to a city summary.
If LA28 makes money, it will not be allowed to distribute its excess funds to any other organization until it has met its financial obligations to the city, according to a set agreement.
Jacie Prieto Lopez, LA28’s vice president of communications and public affairs, said in a statement that her organization is pleased to forward the agreement to the council for consideration.
“We are proud to pursue this agreement that fulfills our commitment to a safe, secure and fiscally responsible Games that benefits Los Angeles for decades to come,” he said.
