City of Vancouver taxpayers are "on the hook for all" of the $1 billion Southeast False Creek Olympic Village, Mayor Gregor Robertson said Friday.
"The decisions of the previous city government have put the city at enormous financials risk, even as we were told in 2006 by our elected leaders at the time that the Olympic Village would be developed at no risk to taxpayers," Robertson said in a city hall news conference.
Robertson described a "complex three-way agreement" made in 2007 by the city, developer Millennium and New York-based Fortress Credit Corporation. The city made not only a $190 million financial guarantee but also a "completion guarantee" to Fortress.
"That effectively made the City of Vancouver the project developer from that point forward" and enabled Fortress to stop making monthly payments to Millennium in mid-September 2008, based on cost overruns and unspecified technical defaults.
The previous Non-Partisan Association majority city council, under Mayor Sam Sullivan, voted behind closed-doors on Oct. 14 for a $100 million emergency loan to continue construction. The remaining $21 million is due Jan. 15 for monthly construction costs.
The city is negotiating with Fortress to restructure a $458 million loan to complete the $1.075 billion, 1,100 unit condominium project. Robertson said the project remains on target for a Nov. 1 handover to VANOC, which will use the village to house 2,800 Olympic athletes during the Feb. 12-28, 2010 Games.
"They are running dangerously close to bankrupting the city," said 2010 Watch's Chris Shaw. "Members of (Robertson's) own party (Vision Vancouver) sat in on those decisions from 2003 onward. His party is as guilty as NPA."
The city promised to build athlete accommodation for Vancouver's successful 2003 bid to the International Olympic Committee. When it was chosen the builder in 2006, Millennium agreed to purchase and develop the land for $200 million and make a $29 million non-refundable deposit. Millennium is selling 730 condominiums and renting 120 after the Games. Another 250 units will used for social housing.
The village financing controversy became the dominant issue of November's civic election when information from the Oct. 14 meeting was leaked to the media. Robertson promised to disclose as much as possible of council's financing decisions.
Coun. Suzanne Anton, the last remaining NPA member from the previous council, said Robertson shares the blame for the funding troubles by not respecting the process.
"There was a lot of fairly irresponsible behaviour by some of the candidates and the current mayor in terms of their discussions about the in camera negotiations and I think that did have the effect of destabilizing the negotiations," Anton said.
City council meets behind closed doors at 9:30 a.m. Monday. City manager Penny Ballem will make a public presentation on the Olympic Village at 2 p.m. in city council chambers.
Bob Mackin reports for 24 Hours.
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Romeogolf
3 years ago
Suzanne the Sidetracker
The minute the NPA and the BC Libs invoke the Fast Ferries, as Anton has in this case, you can bet they're trying to blow smoke to cover up a political tinderbox.
I expect that Suzanne will be sniveling for the next three years. She is quickly going to become a terrible bore. I hope we only have to endure measured doses here. Goodness knows Cannedwaste will publish her every kvetch and quibble.
Rod Smelser
3 years ago
VANCOUVER'S PROBLEM
BC and Canadian taxpayers outside of Vancouver are not going to be willing to pick up any of these overrun costs. This is going to be Vancouver's problem, period.
If Vancouver finds its tax rates rising beyond a tolerable range as a result, a major political benefit might be a sudden conversion of Vancouver's political elite towards favouring an amalgamation of the entire Metro Vancouver region into a single, fully integrated city with one Mayor and a full-fledged ward system. It's long overdue.
Van Isle
3 years ago
Hey Rod, I hate to disagree
Hey Rod, I hate to disagree with you about this being Vancouvers problem. Just after the winter olympics were awarded to Vancouver, Gordo put it in writing with IOC that any short-falls will be picked up with the province.
NicS
3 years ago
Who Holds The Best Cards?
We now know the Olympic Village project is a bust for Vancouver taxpayers. The big question now is how do we defer these inherited costs that were hoisted on us by incompetent and paid for politicians and the usual array of shady/greedy business types.
The world financial crisis is certainly a major factor here. Which has implicated Wall Street and many individual players in outright fraudulent ponzi schemes.
The IOC's reputation may also be on the line. In that they have a very strong interest in seeing the games go ahead.
It has been said in the past that "Olympic games are the kind of event that privatizes the profits and
socializes the losses."
Lets not forget, the Olympic Village is only one of many extra financial costs. We also have the Convention Centre, Security Costs, loss of business costs (people do stay away from places like Whistler during games and security will make Vancouver a zoo during this period as well). That was just my own short list that we all know and agree will cost at least another $2 billion. But what will the real costs to us the taxpayer be?
We are still a year away from the 2010 opening ceremonies, which may give us time to trade off some of the cards we have been dealt. The financial crisis is considered by many to be only just starting to show its depth of coverage.
This year of grace before the games begin is the crack in the door we as taxpayers and our politicians (Robertson & company) need to take this issue its full legal course. This year before may be our best leverage to cancel the games and/or tell those financial institutions who are trying to hold our feet to the fire, that we won't pay what they claim we owe them.
We as Vancouver's citizens must demand that our purse strings stay shut until our cold, dead hands let go.
avandoc
3 years ago
Cancel the games
Wouldn't it be a gift to the world, much more than another round of uninteresting sport, if Vancouver announced that the Olympics have been determined to be unsustainable and corrupting? If Robertson is a truly progressive mayor, then he can lead the way to overthrowing the IOC regime and exposing its immense hypocrisy. The Olympics are just another vehicle for robbing the poor to enrich elites--Vancouver can open the world's eyes to this.
Rod Smelser
3 years ago
POLITICALLY IT'S IMPOSSIBLE
"Just after the winter olympics were awarded to Vancouver, Gordo put it in writing with IOC that any short-falls will be picked up with the province."
What was agreed to and how binding those agreements are I don't know, van isle, and don't pretend to.
However, politically it's impossible for the BC Govt to start picking up significant over-budget costs from this project, having already done so on the Convention Centre. If they do, they face a massive retaliatory blow coming from every constituency outside the Lower Mainland, excepting only the two Peace River seats and a few in the Okanagan.
And even dark clouds have silver linings. If Vancouver taxpayers have to absorb significant overrun costs on this project, and if there are also overruns on the RAV line (about which we have heard surprisingly little) that Translink and/or the GVRD has to absorb, my hope is that this will lead to widespread support for amalgamation of the entire GVRD.