June 27, 2012

To: Governor Hickenlooper and Mayor Hancock From: Denver Olympic Bid Exploratory Committee Members Anne Warhover and Don Elliman, Committee Chairs Re: Bidding for and Hosting, 2022 Olympic and Paralympic Winter Games

Committee Recommendations
The Denver Olympic Bid Exploratory Committee recommends to the people of Colorado that Denver enthusiastically pursue a bid for the 2022 Olympic and Paralympic Winter Games. The Committee arrived at this recommendation following a thorough and detailed public process to explore the benefits and concerns of both bidding for and hosting the Games. While the Committee recognizes that the United States Olympic Committee has not made a final decision regarding the 2022 Games, the Committee finds that there are significant benefits to both pursuing a bid, as well as hosting the Games. The City of Denver and the State of Colorado are in a very good position to make a strong bid at both the United States and international levels, and there are financially viable paths so as to not burden Colorado governments or the taxpayers throughout the bid process. Importantly, the City of Denver and the State of Colorado are well suited to serve the Olympic Movement through our shared values of sport, culture, and education. This recommendation was informed by the Committees work assessing how Denver and Colorado would best serve the Olympic Movement while advancing our collective goal of being the healthiest state in the nation. Additionally, the decision was reached after making key determinations regarding the financial, structural, and community capacity and support for presenting a strong Olympic bid and eventual successful hosting of the Games.

Structure and Process

The Committee organized itself into four subcommittees to study and report on the following key areas: Community Strengths and Benefits This subcommittee explored the potential benefits and concerns associated with bidding on the Games, including the economic impact of the Games on the City of Denver and the State of Colorado. The subcommittee members also researched potential themes for the bid process.
Finance and Fundraising This subcommittee reviewed the bid and Games budgets to determine size and scope of the financial commitments and necessary expenditures. The subcommittee assessed potential sources of revenue and the likelihood of achieving revenue targets for both a bid and to host. The subcommittee also examined whether public funds are needed in the bid process.

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Olympic Operations and Facilities This subcommittee established a baseline operational review of available sports facilities in the state based on relevant operational themes required for a Winter Olympics and Paralympics. It also assessed the status of current transportation, safety and security, environmental, technological, and hospitality options and determined the potential needs to host the Games. Guaranty and Referendums This subcommittee assessed how the City and State could meet the International Olympic Committees host city financial guaranty requirement to successfully bid for the Games.

Key Findings
Following a rigorous schedule of meetings and research, each subcommittee report was completed and helped to inform the final decision of the Committee. The following are the key findings:
Colorado values fundamental principles of Olympism The International Olympic Committee and United States Olympic Committee Charters define Olympism as a philosophy of life, exalting and combining in a balanced whole the qualities of body, will and mind. Blending sport with culture and education, Olympism seeks to create a way of life based on the joy of effort, the educational value of good example, social responsibility and respect for universal fundamental ethical principles. The Committee finds that the culture, values, and principles of the City of Denver and the State of Colorado meet this standard of excellence, and will assist in promoting this approach to life, sport, and community long after 2022. Further, the Committee believes that Colorados objective of being the healthiest state in the nation and the principles of Olympism are synchronous and thus mutually beneficial in meeting the goals of a great Winter Olympics and a great state. There is a strong economic and community benefit from the bid process and as a host city There are clear long-term community and economic benefits for the city and state in both bidding for and hosting the 2022 Olympic and Paralympic Winter Games. These benefits result from designing a bid that complements long-term visions for Colorado and Denver as a healthy, vibrant, and innovative community and how these long-term visions align with and support the Olympic Movement. If the bid is successful and Denver is chosen as the host city, the modern Games have proven to be a viable and financially successful enterprise, acting as an economic engine that is capable of not only producing financial profits but also producing significant overall economic benefits to the local, state, and national communities.

It is the Committees opinion, however, that if the bid process and possible eventual hosting of the Games is not intrinsically tied to a comprehensive regional and state economic development plan, then there is a risk of not achieving the greatest economic and community benefits possible. If a bid committee is formed, it must pay close attention to the needs of the greater community and work carefully to integrate the steps necessary for a successful bid process to help meet those greater needs. Additionally, if a bid is not successful, there are still many positive outcomes for Denver and Colorado that an international Olympic bid platform provides, including an accelerated timeline to realize current needs like tourism promotion and attracting new private sector monies.
Denver and Colorado are able to meet all required IOC Guarantees The International Olympic Committee requires that candidate host cities make a number of guarantees in their respective bids to host the Games, and these guarantees will be required by any bid to host the
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2022 Olympic Winter and Paralympic Games. Colorado and Denver are able to affirm these guarantees without any required spending of public funds for the bid process. Should the Games be awarded to Colorado and Denver, the financial guarantee could be fulfilled though a Special Purpose Authority.
Financing for an Olympic bid can be accomplished with private financing In researching the financial commitment of both bidding for and hosting the Olympic and Paralympic Winter Games, the Committee believes that the financial structure of bidding for an Olympic Winter Games can be accomplished with no use of public funds. Operating the Games can be accomplished similar to the way the Denver region hosted the 2008 Democratic National Convention. As is common with major national events (such as political nominating conventions, Super Bowls, etc.) Federal, State and Local governments incur costs associated with security, transportation, and medical care. However, these indirect costs are far eclipsed by the positive economic benefits associated with the Games. Denver and Colorado are able to meet all operational needs Denver and Colorado are in a strong position operationally to successfully bid on the Games. The Committee completed an exhaustive survey of existing facilities and infrastructure, as well as planned and ongoing improvements, and environmental needs and impacts. This survey found strong statewide capacity in all categories of operational requirements as a host of the Games. These operational areas include: environment, meteorology, venues, medical services, Paralympic Games special needs, safety and security, transport, technology, and media operations. In some categories where additional capacity is required, the necessary facilities and terrain are within our capacity to construct. There is strong public support as a bid and host city for the Winter Games There is great public enthusiasm for both hosting the games as well as bidding for them. In order to gauge public support, the Committee commissioned a public survey where it was determined:

Nearly 3 out of 4 Colorado voters (74%) favor Denver hosting the 2022 Olympic and Paralympic Winter Games. 77% of Colorado voters favor going through the bid process with only 18% in opposition.

This level of overwhelming statewide support is unprecedented on any issue in Colorado.

Sub-Committee Report Summaries

The Strengths and Benefits Committee This subcommittee explored the potential benefits and concerns associated with bidding on the Games, including the economic impact of the Games on the City of Denver and the State of Colorado. Committee members also researched and recommended potential themes for the City and State to utilize.

For the bid to both successfully meet International Olympic Committee requirements and benefit Colorado communities, it must exist as a part of the overall vision for Denver and Colorado. Specifically, there is an opportunity for the Mayor and Governor to incorporate their long-term visions for the City and State into this bid as a means for achieving these shared goals. In order to ensure that the bid does not negatively draw resources away from other priorities, this committee recommends creating proactive plans to address environmental impacts, transportation needs, and a strong public benefit program to serve as a legacy from the bid process. Historically, an Olympic bid is an opportunity to begin important conversations about social issues that affect the entire community.
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This committee found that many cities that pursued a bid and then subsequently lost still saw strong benefits. Lille, France, which lost a bid for the 2004 Games, saw a dramatic increase in tourism and an increase in the number of art and science exhibitions as well as international sporting events. New Yorks failed bid for the 2012 Games led to tremendous infrastructure improvements as well as a revitalization of the neighborhood where the Games would have been held. Mayor Bloomberg concluded, We thought the Olympics would be the catalyst to get a lot of things the city needed ... in fact, many got done. Cities that won the honor to host a modern Games saw an increased access to capital and job growth. A report on the Sydney 2000 Olympics stated that 45 companies recruited as a part of a comprehensive economic development plan in conjunction with the Olympics bid and planning process brought at minimum $520 million and close to 1,200 jobs into Australia. Additionally, in conjunction with the 2010 Winter Games, Vancouver made 12 economic-related announcements tied to bidding for and hosting the Games, one of which involved eight high-tech firms securing $91 million in venture capital. Additionally, Coloradans consistently place a premium on public efforts that maintain a high level of accountability and transparency throughout. This transparency should be evident in the financial structure, vendor recruitment process, and communication style of the organization in place. Finally, this committee also explored how a potential bid could thematically align with health and Olympic values. While all have components that will be incorporated no matter which lead is chosen, there is consensus among the Committee and the respondents of the public survey that the health focus provides the type of long-term benefits we are seeking in a legacy component that clearly supports the Olympic Movement. While health has been an important component of past Olympic Games, Denver and Colorado would put health at its central theme. A health-focused theme ensures that the bid process drives an interactive and integrated public health branding, marketing, and results benefit. Colorado is perennially lauded by a large number of organizations for being one of the healthiest, leanest, most active, and fittest states in the U.S. The Front Range metropolitan region, with its extensive system of trails, parks, sporting complexes, and numerous recreational opportunities is made even stronger by its close proximity to additional recreational opportunities in our world-renowned mountains. The region is also home to a nationally recognized public healthcare system. These tangible demonstrations of Denvers dedication to putting sport at the service of humanity align the City with the mission of the International Olympic Committee and its recent commitment to promoting public health.
Guaranty Committee The International Olympic Committee requires candidate host cities to make guarantees in their bids to host the Olympic Games. The committee focused much of their effort on the financial guarantees. To meet this requirement, while upholding Colorado constitutional requirements, this committee recommends the creation of a Special Purpose Authority to make all or a portion of the financial guarantees to the International Olympic Committee. Special Purpose Authorities are authorized to make multi-year financial obligations and could include the host committee and could be involved in other fundraising efforts. An analogous successful Special Purpose Authority in Colorado and Denver is the The Denver Health and Hospital Authority. Using a Special Purposes Authority to make the financial guarantees does not require an election or the required use of current cash reserves, and therefore, does not cause a timing or process delay or depend upon voter approval.

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Operations Committee Denver and Colorado are in a strong position from an operations perspective to successfully bid on the Games. The subcommittee completed an exhaustive survey of existing facilities and infrastructure, as well as planned and present improvements, and environmental needs and impacts. This survey found strong statewide capacity in all categories of operational requirements as a host of the Games. These operational areas include: environment, meteorology, venues, medical services, Paralympic games special needs, safety and security, transport, technology, and media operations. In some categories where additional capacity is required, the necessary facilities and terrain are certainly within reach.

Denver and Colorado have demonstrated a successful history of hosting major sporting events on both a national and international scale including many Olympic sports. These events developed experienced personnel who are proven at managing major sporting operations and working with international federations. A few examples include the X-Games, the U.S. Curling Olympic Trials, World Cup ski races, Sportaccord, The Churchill Cup Rugby Tournament, and many other national and international fitness-oriented events. Colorado also starts in a strong position as it relates to the structural components necessary to bidding and hosting the Winter Games. Of the twelve major venues integral to competitive events at the Winter Games, Colorado currently has eight existing in the alpine and arenas categories. The four new venues necessary pertain to the Oval, Sliding, Jumping, and Nordic events. Of these, legacy opportunities exist for each of them, ensuring a worthwhile investment. For non-competition venues, there are seven total structures required. Of these, only the city and mountain athlete villages will require permanent construction. While these facilities will likely require some public financing to construct, they all represent opportunities for long-term legacy use. Examples of how other Olympic host cities have turned facilities into legacy opportunities include the Oval Vancouver constructed in 2010. This facility now serves as multi-use facility for the city and surrounding communities. Also, to accommodate the International Broadcast Center and Main Press Center, Vancouver 2010 expanded the existing convention center to triple its previous size. The following year alone, Vancouver hosted 98 additional conventions they could not have previously hosted due to the limited size of their convention facility and are looking to triple the facilitys non-resident delegate days by 2015. Additionally, Olympic villages can be used to showcase cutting edge design and construction techniques as well as to fulfill vital affordable housing needs after the Games are completed. Again, Vancouver was successful at utilizing the Winter Olympics as a catalyst for needed affordable housing projects in the mountain communities Additional requirements Denver and Colorado currently meet include: The ability to host a strong and vibrant Paralympic Games. A modern and comprehensive medical services community capable of meeting athlete training and competition needs and doping controls. An NSSE Level 1 security standard can be met, and a history of hosting high-profile events including the Democratic National Convention, G8 Summit, and a Papal Visit. Minimum accommodation requirements of 23,000 hotel rooms ranging from 2 to 5 star ratings. Existing transportation capacity can meet all necessary requirements and is equal to or exceeds capacity held by all recent hosts of Winter Games including Salt Lake City and Vancouver. All necessary technological and media operations are met in regards to telecom capabilities, data transfer, and power. Demonstrated environmental history and community capacity that meets Olympic ideals.
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Finance Committee The finance subcommittee was charged with the task of reviewing both the bid and Games budgets to determine several key factors. First, the magnitude of any financial commitments (the amount of expenditures required) and potential sources of revenue were studied. Second, the risks associated with the various revenue streams were identified and the likelihood of achieving the revenue targets for both the bid and hosting the Games was assessed. Finally, the committee looked at whether the bid process and hosting the Games would require any level of public funds.

The cost of an Olympic bid varies due to factors including scope, legacy, realization of value in kind (VIK), and potential escalation of costs. VIK represents the donation of necessary products and services to the bid process thus providing some budgetary relief. Although only certain expenditures can effectively be satisfied through in-kind donations, the Denver bid committee should seek to maximize the use of in-kinds to the furthest extent possible. Determining the exact amount of in-kind donations the bid committee could raise is very difficult. As a point of reference, the Vancouver bid committee received over $5 million through in-kind donations. The Denver bid committee should be determined and establish up front a plan to go beyond that amount. Given these variables, the finance subcommittee concluded that a range between US$27.8 million and US$45.0 million (combination of cash and VIK) represents an accurate likely cost of a national and international bid between now and the International Olympic Committees decision in 2015. This result is based on research of past comparable cities Olympic bids seeking the Winter Games. Adjusted for inflation, the Vancouver bid committees expenditures would equate to US$32 million for a current bid. The subcommittee believes that a goal within the above-stated range is attainable and also allows for a strong state legacy. The subcommittee also believes the financial structure of bidding for an Olympic and Paralympic Winter Games can be done with no direct contributions of public monies to the bid. This ensures that any commitment of public funds will only occur if the opportunity to host the Games is awarded to Denver and Colorado. It is important to note that use of public funds would only be dedicated to legacy opportunities such as the construction of the few facilities necessary to host the Games. As is common with major national events (such as political nominating conventions, Super Bowls, etc.) Federal, State and Local government incur costs. However, these indirect costs are far eclipsed by the positive economic benefits associated with an event like the Games. Some public monies would likely be needed for venue construction and there are currently existing sources and vehicles to secure this investment capital without placing a burden on the general operating budgets of local and state governments.

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Denver Olympic Exploratory Committee Members

Co-Chairs

Anne Warhover, CEO, Colorado Health Foundation Don Elliman, Chancellor for the University of Colorado Denver, Anschutz Medical Campus

Members

Ernie Blake, former Mayor of Breckenridge Jeremy Bloom, Olympian Kelly Brough, CEO, Denver Metro Chamber of Commerce KieAnn Brownell, CEO, The Silhouettes Cedric Buchanon, City President, BBVA Compass Mario M. Carrera, SVP Entravision Television Group, Spanish Language Stations Rob Cohen, CEO, IMA Financial Group Tami Door, CEO, Downtown Denver Partnership Steve Farber, Shareholder, Brownstein Hyatt Farber Schreck Cole Finegan, Partner, Hogan Lovells Harry Frampton, Chairman, Vail Valley Foundation LaCharles Keesee, Senior Advisor to the Mayor, Office of Mayor Michael Hancock Ken Lund, Executive Director, Colorado Office of Economic Development and International Trade Steve McConahey, Chairman, SGM Capital Chris Osborn, Chairman of the Board, Poudre Valley Health System and CEO of Coach Training Alliance Christine Riordan, Dean, Daniels College of Business, University of Denver Richard Scharf, President & CEO, Visit Denver Hon. Elbra Wedgeworth, Chief Government and Community Relations Officer, Denver Health Sara Will, Paralympian Richard Young, Partner, Holme Roberts & Owen

Expert and Staff Support

Jerry Anderson, Program Manager and Senior Principal, Populous Sue Baldwin, Interim President, Metro Denver Sports Commission Jim Burton, Denver Office Managing Partner, Grant Thornton LLP Ben Davis, Partner, OnSight Public Affairs Chris Keating, Principal, Keating Research Gillian Hamburger, President, Alem International Steve McCarthy, Chairman and CEO, Alem International Mike Melanson, Partner, OnSight Public Affairs

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