I think the Olympics need to be looked at as a catalyst for infrastructure work you're hoping to do anyway. If an Olympics allows you to revitalize a dead part of town (ie West Village) or to build an LRT line...and do with less direct money and on a quicker timeline, then that cost might be worth it.
If it's just about a big party with no real benefit but good memories, no thanks. If it's a fast-track to city building, then I think it becomes a lot more palatable.
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