After The Party: What happens when the Olympics leave town

On Sunday, during the closing ceremony of what will surely be called the "greatest Olympics ever", David Beckham will roll into the Bird's Nest stadium in Beijing on a Routemaster bus. Watched by almost a billion people, he will join Leona Lewis and a troupe of hip-hop dancers for an eight-minute handover ceremony that will climax with the presentation of the Olympic flag to the Mayor of London, Boris Johnson.

And so the baton is passed. After the giddy celebrations of 6 July 2005 – the day London won its bid to host the 2012 Olympics – and a record gold medal haul for Great Britain in Beijing, London must get down to business. Four years from now, all eyes will be on a patch of land in the east of the capital, where the Olympic stadium is taking shape. But already, the talk is not just of sporting glory, but of the "Olympic legacy".

In its modern incarnation, the Olympic circus has rolled into 22 cities, from the great (Los Angeles, London, Sydney) to the modest (Seoul, Helsinki, Antwerp). Then it packs up and rolls out again. In its wake, it has left cities either transformed or crippled.

The best Olympics regenerate neglected districts, inspire children to take up sport and leave a city furnished with world-class venues and rolling in Olympic dollars – Barcelona is a good example of this. The worst are poisoned chalices that leave a nation in debt and a city overrun by white elephants – look no further than Athens.

The signs for London had been good; the video presentation that helped clinch the Games was rich with images of children emulating their heroes, and the talk was of transforming a neglected area of London and an end to British underachievement in sport.

But cracks are appearing. Boris Johnson has warned that there was no "legacy masterplan" for the Olympic venues, saying it was pointless ploughing money into the Olympic site if no one knew "what on earth we're trying to achieve". Earlier this year, a committee of MPs accused Lord Coe and the 2012 team of lacking foresight and spending money "like water". And, last month, a government survey showed that participation in sport in London was falling. And the budget for the 2012 Games has soared from £3.4bn to £9.3bn.

On the return journey from Beijing next week, Johnson and Coe's delight at taking delivery of the Olympic flag may be tinged with apprehension, bordering on fear. The spotlight will only get brighter as 2012 approaches. It may already be too late to learn from the experiences of previous host cities, but the lessons are clear to see.

Athens, 2004

The Greek capital and spiritual home of the Olympics was distraught when it lost its bid to host 1996's centennial games to Atlanta, but they would not be denied in the race to stage the 2004 event. The Greek authorities were under pressure to make a success of the Games as soon as the decision was announced at a ceremony in Lausanne in 1997. The Games' symbolic return to their birthplace would be an event to be remembered for another 100 years. Or so they hoped.

The organisers got their wish, but for all the wrong reasons. Athens's legacy is among the worst of any Olympiad. Four years after the closing ceremony of the Games that former International Olympic Committee president Juan Antonio Samaranch called the "best ever", as many as 21 out of the 22 venues lie abandoned. The open-air swimming pool is empty and stained, while squatters camp outside the graffiti-festooned Faliron complex, which hosted events such as taekwondo and beach volleyball.

The Athens Olympics, which cost a record £9.4bn to stage (way over its original budget, which rocketed after the September 11 terrorist attacks increased security costs) have left Greece groaning under a huge debt. In the months after the Games, the shortfall amounted to €50,000 for each Greek household, and taxpayers are still footing the bill. Maintenance of the sites alone has cost as much as £500m. "We didn't find a plan for the post-Olympics development of the venues," Fani Palli-Petralia, a New Democracy politician, said recently. "When a city gets the Games, it should make a business plan for big changes and then decide what the country needs for the day after the Olympics. This did not happen."

The Greek authorities have insisted that they have plans to sell off the venues that have become such a drain on the country's beleaguered economy, but there has been no concrete evidence of them. Despite the success of the sporting events and the smooth running of the Games (workers pulled of a small miracle by finishing some venues with hours to go), as well as undoubted improvements to the city's infrastructure – notably its subway – Athens has become a manual on how not to stage the Olympics.

Venues that were built to meet the requirements of sports federations (most of which get one chance every four years to market their events to a global audience) have proved useless to Athenians. Poor urban areas have been left in the shadow of the white elephants, with no sign of the "urban renewal" that Olympic organisers, including London's planners, are so quick to promise.

Sydney, 2000

The IOC's Samaranch liked dishing out superlatives as much as he did medals. Before he grandly declared the Athens Games the "best ever", he bestowed the same accolade upon Sydney, which handed the torch to the Greek capital after the 2000 Olympics.

On reflection, it is Sydney that keeps its place at the top of the podium for the best organised, happiest Games. Bill Bryson, the travel writer, went so far as to write: "I don't wish in my giddiness to overstate matters, but I invite you to suggest a more successful event anywhere in the peacetime history of mankind."

But, eight years after Cathy Freeman brought tears to the eyes of a billion TV viewers by winning the 400 metres in front of a home crowd, and Steve Redgrave got back in that boat to make Olympic history, Sydneysiders, who still fondly remember the success of the 2000 Games, have been left with negligible benefits. Sue Holliday, the former chief planner for the Sydney Games, told a conference recently that the host city should have focused more broadly on a legacy programme for the Olympics site. "Sydney is now paying the price," she said.

First, the budget spiralled in familiar Olympic fashion, almost tripling to about A$6bn before a medal was won. The New South Wales government has said the financial result of the Games was a net cost to the public finances of at least A$1.5bn (about £720m). Then, Sydney Olympic Park – the centrepiece for the Games – became yet another white elephant after the Games closed. A long-term plan for its redevelopment, turning the site over to residential and commercial use, did not appear until 2005. "We didn't really have a policy for what would happen to the Olympic site after the Games," Holliday admits.

Until the Olympic Park is reborn as a new suburb, it serves largely as an attraction to the curious tourist, but the huge influx of foreign visitors the organisers hoped to generate never materialised. One study has said that, in the three years after the Games, foreign tourism to the state of New South Wales (whose capital is Sydney) rose less than for Australia as a whole.

Another study suggested that there wasn't even any evidence that hosting the Games boosted participation in sport, but only encouraged more people to watch it on television. Perhaps the strongest legacy of the Sydney Games is the expertise of the city's Olympic planners – Beijing is said to be packed with Aussie consultants.

Atlanta, 1996

When the International Olympic Committee turned down Athens's bid to host the centennial Olympics for fear that the Greek capital's infrastructure would buckle under the weight of the Olympic circus, they awarded the Games to Atlanta. Surely a modern American city – and the home of Coca-Cola – could cope?

Much was promised. Billy Payne, the head of the Atlanta committee, predicted "the greatest peacetime event in the 20th century" but, 12 years on, the Atlanta Games are remembered not for Michael Johnson's supercharged efforts on the track or Muhammad Ali's lighting of the Olympic cauldron, but for the transport chaos that almost brought the Games screeching to a halt.

Embattled bus drivers got lost and quit mid-journey, while spectators fought for places on erratic train services. Meanwhile, the commercialisation of the Games at Atlanta – they were the first to be funded almost exclusively by sponsorship (most visibly, and inevitably, by Coca-Cola) – and the pipe-bomb that killed a visitor threatened to tarnish the reputation of Atlanta and of the Olympic Games themselves.

Yet Atlanta has one of the strongest Olympic legacies. That sponsorship might have been unsightly, but it meant that the 1996 Games broke even – no crippling debt for Georgians. The former mayor of London, Ken Livingstone, who played a big role in his city's successful 2012 bid, has suggested that London's Olympic committee look to Atlanta as a model. Both cities are ethnically diverse, and both placed the regeneration of inner-city areas at the centre of their bids.

Atlanta's Olympic stadium was designed with its future incarnation as the home of the Atlanta Braves baseball team in mind. Georgia Tech University took over management of the aquatics centre before the Games began and have since adapted it to include an indoor running track and basketball courts used by students, local clubs and schools. The university houses thousands of its students in the former Olympic Village.

Centennial Olympic Park, the site of the bombing, was built in what was a rough part of town, but today its fountains are popular with children. Carl Lewis, the athlete who won his ninth and last gold medal in Atlanta, has said he is moved every time he visits. Housing built around the park brought new people into the city centre, and plans drawn up by Atlanta's leaders transfer 20 per cent of the tax generated by the regeneration into poorer districts.

The Atlanta Games might have a somewhat shaky reputation, but the head of one development agency which has used this cash to build $30m of affordable housing has said the Olympics left the city a "legacy of opportunity".

Barcelona, 1992

Those of us who board easyJet flights to the Catalan capital this summer and, in a break from Gaudi and tapas, spend an afternoon on Barcelona's white sandy beaches, should then hop on an open-top tour bus for a ride to Montjuic and its stadium, and thank the Olympic rings. The 1992 Games are widely credited not just with transforming the landscape of Barcelona itself, but also with rebranding a city that has become one of Europe's most popular tourist destinations.

Before the Games came, a railway skirted Barcelona's nondescript Mediterranean coast. Then, as part of the huge regeneration programme, the Olympic Village was built and two miles of beach installed. Since then, another mile of beach has appeared and the number of restaurants built to feed bathers has rocketed from seven to 70.

The regeneration didn't stop there. A new port was built, and on the hill above the city, some of the most photogenic venues in Olympic history were constructed. The Games transformed the city's image as a centre for commerce – in one annual report, Barcelona shot from 11th to fourth in the European rankings for best cities to do business in. And the number of hotel rooms in the city more than doubled between 1990 and 2004.

No wonder the Barcelona Games are held up as the "model Olympics". London's organisers have made several trips to the city to look and learn and, while the circumstances of the two aren't directly comparable (the Games came at a time when Barcelona was desperate to prove it could hold its own alongside the great European cities), the lessons are there.

One of the greatest legacies of the Barcelona Games has been their effect on Spanish sport. Romantics have suggested that the Games inspired a generation of children. Last month, under the headline "Why are we so good?" Spain's biggest-selling sports daily declared a "golden age" after a summer in which Rafael Nadal became men's tennis No 1, Carlos Sastre won the Tour de France and the national football team won the European Championship. Many trace these successes back to Barcelona, which not only inspired would-be winners but left an infrastructure of world-beating facilities and top-class coaching. With the exception of the Olympic Stadium itself, whose position high on Montjuic makes it relatively remote, the 1992 venues have been successes.

Critics pointed out that the "Olympic effect" helped to hike property prices beyond the means of many in Barcelona, but the event proved that, in the right hands, the Games need not be a poisoned chalice.

Seoul, 1988

If London has looked to Atlanta and Barcelona for inspiration, Beijing surely studied its Asian neighbour in the run-up to its Olympics. For South Korea and China, securing the Games was less about sport or urban regeneration than about vanity – an opportunity to cement a place on the global stage and stir national pride.

Seoul also had to restore the reputation of the Games, which had become tarnished by tit-for-tat American and Soviet boycotts in Moscow and Los Angeles. Indeed, this troubled period in Olympic history helped Korea take delivery of the Olympic torch; with major cities put off, Seoul had only Nagoya, Japan's fourth-largest city, for competition. Seoul seized the opportunity, its leaders calling the Games "the biggest national project ever undertaken by Korea".

But, as the construction of the venues neared completion, Seoul turned out to be a warning for Beijing that one Olympic legacy can be political upheaval. The Games were pursued to legitimise an authoritarian regime, but this backfired; as the Olympic spotlight shone on Korea, pro-democracy protests broke out and Korea's leaders were forced out and replaced with an elected government.

The Olympics provided the catalyst for the emergence of the democratic South Korea that is now a major economic force. In Seoul, that legacy is evident in every skyscraper that dots the hi-tech city. The influx of cash during the Games (which were profitable) from television networks and multinational sponsors did not dry up when the athletes went home; businesses flocked to Seoul, helping to give Korea the third-largest economy in Asia.

The Games provided a similar boost for Korean sport. Training programmes improved and sports leagues blossomed. Korea has finished out of the top 10 in the Olympic medal table only once since Seoul (it appeared there only once before 1988). Yesterday, the country occupied seventh place in the Beijing standings. "Before hosting the Olympics, Korea's international sports competition was quite low. Its goals were quite humble," Yoon Kang-ro, a Korean sports diplomat, told the Korea Times last year. "After hosting the Olympics, the goals became much higher."

Of course, for all South Korea's success, the Seoul Games will always be remembered not for helping to bring democracy to a sleeping economic giant, but for the biggest Olympic scandal of all time – Ben Johnson's apparently superhuman (but in fact drug-assisted) 100-metre dash.

Los Angeles, 1984

If one Olympiad can be credited with changing the shape of the modern Games, it is that of Los Angeles. The city's leaders had to get it right: the previous time the Olympic flame had burned in North America, in Montréal in 1976, it left a gaping hole in the city's finances. "The Montréal Olympics can no more have a deficit than a man can have a baby," declared Montréal's then mayor, Jean Drapeau, a prediction that haunts him to this day. The city's residents only finished paying off more than £600m of Olympic debt in 2006.

To stop history repeating itself, Los Angeles created a new model for the Olympics. First, rather than build prestigious venues that would look great for the cameras but send budgets through the roof (and which might not be completed in time anyway, as in Montréal), existing facilities were improved. Los Angeles was at an advantage, being a big city that already had good sports venues – indeed, it was the only city willing or able to host the Games after the financial failure of Montréal and the political upheaval in Moscow in 1980. Only the velodrome and the aquatics centre needed to be built specially for the Olympics.

The Games still cost hundreds of millions of dollars to stage, but taxpayers bore none of the burden – Peter Ueberroth, the head of the LA organising committee, turned the Olympics into a business. He raised $150m in corporate sponsorships (that cycling venue was the "7-Eleven Velodrome", while the pool was sponsored by McDonald's), $286.8m in television rights and another $150m in ticket sales. It emerged after the Games that Los Angeles had made a healthy profit of more than $200m – the first Games to make money since 1932. The wider economic impact of the Games on Southern California has been put at $3.3bn, while 40 per cent of the profits were channelled into youth sports organisations.

Partly as a result of the way LA financed its Games, and the size of the city before the torch arrived, it is probably the host city with the smallest Olympic footprint. There are no bus tours of redundant stadiums or abandoned Olympic parks. Rather than use the Games to score political points or put a city on the map, or get swallowed up by the enormous expectations that hosting the Games brings, LA played it cool. It showed that, for big cities at least, there is a third way – use the Olympics to make some cash and show off some sport, and then move on.