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. Last Updated: 07/27/2016

Goodwill Games: Some Pain, but City Will Gain

ST. PETERSBURG -- There is, according to journalist Olga Nikonova, an old St. Petersburg anecdote about a French aristocrat who would prepare for a ball by washing only her face, neck, and arms -- those parts not covered by her dress. "And now" St. Petersburg, "like just such a young lady before her first ball, is preparing for the arrival of guests," wrote Nikonova in The Nevsky Times, in an article about the sound and fury of preparations for the 1994 Goodwill Games, which open July 23. Nothing has delighted Petersburgers more than the facelift that downtown facades are enjoying as the city gussies itself up for the thousands of guests and millions of television viewers expected to accompany the 1994 Goodwill Games. Cynics, however, scoff at the fresh paint as cosmetic repairs hiding serious structural problems, the sort that come from being built on a miserable chunk of northern swampland and neglected for decades. With so little money available here -- indeed, anywhere in Russia -- Petersburgers wonder if hosting a 50-nation sporting event with an estimated price tag of about $110 million will be money well spent. The Communists do not think so, nor does the Green Party. Both consider the games a misplaced spending priority. The followers of ultranationalist Vladimir Zhirinovsky, on the other hand, accuse Mayor Anatoly Sobchak of not spending enough. "If we were running things, every pensioner would get a free ticket," said Gennady Ravdis, the local party spokesman. Russians are particularly alarmed when they hear that the Goodwill Games have traditionally earned disappointing television ratings and lost millions of dollars -- Ted Turner, the games' founder, lost $26 million on the Moscow games in 1986, $44 million in Seattle in 1990.Yet for St. Petersburg, if not necessarily for Turner, the Games should be an economic bonanza -- a fact Mayor Sobchak hammers at with limited success. Chronically skeptical Russians are not convinced that tourism, ticket sales and Russian sponsors will offset the games' cost. "Sure, if you own a hotel" the games "are great," said Aleksei Nazarov, 46, an insurance salesman. "But I don't own a hotel." Of course, a dollar spent on a hotel room or a meal or a taxi moves its way through a community; it may be spent several times over. Studies of economic impact -- money brought into a city by an event -- often use "multipliers" to reflect this effect. Statisticians calculate the money brought in, then multiply the amount by a largely arbitrary figure to represent the same dollar being spent several times. Such explanations are lost on most Westerners, and much more so on Russians flailing about in the sink-or-swim swamp of post-Soviet capitalism. Calculating the real economic impact of an event is devilishly complex. No studies, if they have been done, are being made available to the public in connection with the games in Petersburg. A study following the 1990 Goodwill Games indicated that Seattle soaked up $150 million. But according to Goodwill Games President Jack Kelly, "that study doesn't take into account things like, for example, people going to the games instead of going to the movies." Be that as it may, St. Petersburg stands to gain enormously. Turner is prepared to spend $70 million on the games this year. The Russian side will put in roughly $40 million, about nine-tenths of it from the federal government and about a tenth -- a mere $4 million -- from the city budget. In return, St. Petersburg's sagging infrastructure will be shored up. Buildings, at least on the surface, have been spruced up, and a constellation of sports stadiums and arenas raised to world-class levels. The city transport system will be strengthened by the purchase of new cars and buses, while bridges and roads are enjoying long-overdue repairs. "These stadiums being repaired will be used for two weeks for the games, but they have a 30-year life after the games," said Kelly. "The same is true of things like renovating bridges. If you count all these repairs, the rebuilding of venues, plus buses the city is buying which will be used for 20 years after the games, you see that much of what's being done for St. Petersburg has a legacy beyond the games." Looking ahead, Mayor Sobchak said the stadiums and arenas would allow the city to aggressively compete to host future Olympics. Then there is tourism. In the short term, some 80,000 tourists are expected to visit the city during the games. But the games will also be broadcast to more than 100 countries, with a potential viewership of 600 million people. "Much of the coverage involves just going out to the streets filming people," Kelly said. "For the world to see people having a good time in Russia could be fairly important for tourism, and would present a good image for both the city and Russia." Indeed, studies show that cities enjoy a tourist boom for several years following such sporting events. All of which is very well, the cautious Russian says, but what is in it for Turner? According to Kelly, Turner will not take nearly the loss in St. Petersburg that he suffered in Seattle. "This year, costs are better understood: We will spend less money than we did in Seattle and take in more advertising revenue," he said. "We are much more likely to break closer to even.