This article from 2005 is probably still relevant:
STATE and local officials may be hanging their heads about the announcement that London, and not New York City, will be playing host to the 2012 Summer Olympics, but New Yorkers should be breathing a sigh of relief that the Games are now somebody else’s worry
I think there are good reasons to host if you are a second tier city, and can show the world that you are really a first tier city. It will drive long-term growth to your area. It’s brand building. Atlanta’s boom coincides with the Olympics, this is not a coincidence.
On the other hand, Montreal is still paying off the debt from hosting in the 1970s. And Chicago doesn’t need to show the world it’s a great place, everyone knows that Chicago is a great place. What do they get out of it? Nothing.
(Thanks to LilBro for the link.)