Los Angeles city officials are sounding alarms about a financial agreement so overdue and so full of holes that it could, in the worst case, push the city toward bankruptcy by 2029.
City Councilmember Monica Rodriguez sent a letter Tuesday to LA28 CEO Reynold Hoover, warning that the current draft of a key cost-reimbursement agreement leaves Los Angeles dangerously exposed. The agreement, which is supposed to spell out exactly what city services L.A. will provide for the 2028 Summer Games and how it will be paid back, is now more than six months late.
“Every dollar owed to the City must be reconciled and paid before any surplus is retained or repurposed,” Rodriguez wrote in the letter. “Bankruptcy cannot be the legacy of these Games.”
That’s not a throwaway line. It reflects a specific fear that city leaders have been building toward for months.
The core promise around the Olympics has always been that they’d cost taxpayers nothing. LA28, the private organizing committee running the Games, would fund and orchestrate everything. Los Angeles would provide the infrastructure, the policing, the traffic management, and get reimbursed. Clean deal.
Except it isn’t.
The 2028 Los Angeles Olympics carry a $7.1 billion budget from LA28, but that budget doesn’t include security costs. Not a dollar. City Attorney Hydee Feldstein Soto flagged this in a March report to the city council, noting that security spending, including LAPD overtime, hasn’t been accounted for in LA28’s financial planning.
The federal government has committed $1 billion toward security for the Games and put the Secret Service in charge of coordinating that effort. That sounds like a lot. But that money gets spread across every law enforcement agency involved in policing the event, which means the actual slice landing in L.A.’s budget is unknown. Feldstein Soto put the question plainly in her report: “What happens if the City’s actual extraordinary expenses exceed $1 billion?”
Nobody has a clean answer.
The situation is thornier because of a deal L.A. made when it won the host bid. To land the Games, city officials agreed that Los Angeles, along with the state of California, would serve as the financial backstop for the entire operation. If LA28 runs short, L.A. covers the gap. That’s the agreement on paper.
But Rodriguez and Feldstein Soto are now raising a scenario nobody wants to say out loud: what if LA28 turns a profit, and the city still ends up in debt?
It can happen. If the reimbursement agreement doesn’t lock in clear, enforceable language about when and how the city gets paid back before any surplus is distributed, investors and backers behind LA28 could walk away with money while L.A. sits with unpaid bills.
“The City requires unambiguous language in the [agreement] to foreclose any scenario in which funds might go back to the wealthy backers and investors of the LA28 organization without reimbursing taxpayer-funded extraordinary costs,” Feldstein Soto wrote.
That’s a direct shot across the bow. Not a subtle one.
As of this writing, LA28 had not responded to a request for comment on either the letter or the city attorney’s March report. The city council’s ad-hoc committee on the Olympic Games meets next Tuesday for the first time since January.
Six months between meetings. Six months late on an agreement. Neither of those facts inspires confidence in a city already wrestling with a brutal budget shortfall.
This reporting by LAist captures a city that said yes to a massive, prestigious event and is now confronting the fine print it didn’t nail down firmly enough at the start.
Los Angeles has two years. The opening ceremony is set for July 2028, and the window to get a binding, ironclad financial agreement in place is closing fast. Rodriguez’s letter is an ultimatum dressed in civic language, and if LA28 doesn’t move quickly to lock in clear reimbursement terms, the city may find itself holding the bill for a party it technically didn’t throw.
“Bankruptcy cannot be the legacy of these Games,” Rodriguez wrote.
Worth reading twice.