This article on Medill's website begins to address the concerns, costs, and preparations that are going on in case Chicago wins.
I've been to a fair number of large scale events around Grant Park and for the most part the City of Chicago does a pretty good job in my opinion. The best and most recent example of this prowess was the November 4th Election Night rally for Obama.

The city is rightfully touting it's ability with the Obama example, but still the Olympics are larger, longer, and of more interest to the entire world. Which also means it can be a bigger target for the crazies out there.
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