The extravagant gamble of Rio's Olympic mayor

The August 5 opening of the 2016 Summer Olympics is still a week away, but Rio de Janeiro mayor Eduardo Paes is already playing catch-up. A squad of blue overall-clad plumbers, electricians and custodians descended on the Athletes Village this week for emergency repairs.
It turns out the brand new, $900 million complex of apartment buildings -- "the best in the history of the Olympics," Paes had declared -- was chockablock with problems, including gas leaks, gushing toilets and electrical shorts. That drove the Australian delegation packing off to local hotels, with the Swedes close behind. The Argentines, Belarusians and Kenyans weighed in with their own gripes, and suddenly the Olympics host city was sprinting to head off a full-blown diplomatic embarrassment.
Mind you, shoddy digs and construction snafus are hardly new in the annals of the Olympics. In 2014, athletes competed to live tweet the most appalling conditions in their living quarters at the winter games in Sochi, Russia. And Olympians still talk of the eleventh-hour paint jobs and the massive blackout that preceded the 2004 games in Athens.
To his credit, Paes readily acknowledged the failings and even half-apologised for his initial flippancy, when he'd joked about making it up to the Australians with a gift kangaroo. (Team Australia parried that they'd take plumbers over marsupials.) By the middle of this week he'd personally handed the team the key to their quarters, turning a gaffe into a photo-op.
For Paes, personally -- not just Brazil -- the stakes couldn't be higher. In a few days, the city he runs will be the center of global attentions, with nearly 11,000 athletes, half a million fans, and a world-wide television audience. A flop could squelch his career and further damage Rio's credibility. If the games go well, however, Paes's cachet will rise, just as London Mayor Boris Johnson's did following the 2012 Olympics in the U.K. capital, and conceivably set up Rio's mayor for a run for governor, or even president, in 2018.
That would be a steep climb for the 46-year-old Rio native, though a depleted field of seasoned adversaries could help. For the last two years, scores of Brazil's political heavyweights have been snared in a massive investigation into graft and kickbacks at the state oil company, Petrobras. Rio's lavishly expensive Olympic venture hasn't escaped the scrutiny of the sleuths. Consider that the headline contractor on Rio's sloppily-made Olympian athletes' villa was the Odebrecht Group, whose chief executive was convicted and sentenced to 19 years for corruption in the Petrobras case.
Paes has not been implicated in any of the scams, although some of his closest political allies, including the former governor of Rio state, are under investigation. A clean slate would put Paes head and shoulders above the shamed cast of elected officials who turned Brazil's highest offices into an ecosystem as toxic as Rio's famously polluted Guanabara bay.
But he still must finesse the Olympics. Forget for a moment the devastating Zika virus (cooler winter temperatures have slowed down the mosquito that carries it), the offal-strewn Atlantic bay (an environmental disaster decades in the making), and the recent spike in street violence (Rio has been getting safer for a decade). Look, instead, at the broader legacy South America's first Olympic Games promise to bequeath to the host city and beyond.
The quadrennial sports tournament has been a mixed blessing for the cities that have hosted it in the past. The 1992 games revolutionized Barcelona, turning the neglected Spanish city into a thriving metropolis. Elsewhere, the Olympics are best remembered for the white elephants they left behind. The ill-starred Athens competition presaged Greece's plunge into crushing debt and a narrowly averted shotgun divorce with the European Union.
The big question for 2016, reckoned Octavio Amorim Neto, a Brazilian political scientist at the Getulio Vargas Foundation: "Will the Rio games be more like Barcelona or Athens?"
The likely answer is, somewhere in between. The city and eponymous state of Rio de Janeiro have seen their fortunes slide since 1960, when Brazil raised a new capital in Brasilia 750 miles to the west. As the bureaucrats went west, businesses fled south to Sao Paulo, pitching the "marvelous city" of Rio into decline. Hope resurged with the discovery of vast oil reserves off Rio's shores, but then came the collapse of crude and the Petrobras scandal. Rio’s state governor took a federal bailout last month, while city hall has mortgaged its revival on the Olympic windfall.
Now, the sports arenas are mostly ready and will look grand on camera against Rio's postcard backdrop of mountains and sea. Look closer, though, and the idyll gets messier.
Planners praise Paes's initiative to topple an elevated freeway, an eyesore that walled off the city center from the sea. A pedestrian promenade and a striking new museum by celebrity Spanish architect Santiago Calatrava also helped resuscitate the decrepit port zone, which had been abandoned to petty crime after dark.
Less successful was Paes's plan to enliven downtown by mixing housing with retail shops and office towers. Unfettered by zoning restraints, property developers went all-in for the office buildings, which fetch three times the profit per square meter than residential projects, an economist familiar with Rio's finances told me. Not surprisingly, downtown residential development has stalled.
Critics also skewered the decision to pour a disproportionate share of the Olympics budget into Barra da Tijuca, a beachside zone of malls and apartment behemoths west of town that's become Rio's version of Miami Beach. The public works included sports arenas, tunnels and bridges, a grand Olympics media center and the pricey athletes' villa.
The spiffy new metro line looks grand, but mostly serves a thinly populated upmarket neighborhood of just 300,000 people -- for a whopping price tag of $2.9 billion. Compare that to the $77 million authorities spent on improving the precarious suburban rail system, which serves 2.6 million people in greater Rio's mostly blue-collar north zone.
In total, all the flashy Olympic renewal won't do much to correct Rio's lopsided urbanomics: 37 per cent of the jobs are in the city center, though less than 5 per cent of the population lives there. One in four Rio commuters spends around four hours a day getting to and from work -- the longest ride of any of Brazil's major urban centers. "In Brazil, we've totally lost the ability to plan, and uncontrolled urban sprawl is the result," urban planning expert Sergio Magalhaes told me.
Mayor Paes isn't the only politician at fault. The state of Rio is in charge of the commuter rail system and the metro. But as the Olympics host, with his sights on high office, Paes missed the opportunity to lead the conversation among regional authorities on how to parlay Olympic largesse into revival for Brazil's signature city. That takes more than a dream team of plumbers. - Bloomberg View