The city will recover any financial investment it makes towards the Olympic Village before Millennium Development does, a Vision Vancouver councillor said.
Newly elected councillor Geoff Meggs told The Tyee yesterday that Vancouver is effectively the developer of the village, thanks to an in-camera council decision in June 2007. Although not all the details of that meeting are known, the decision provided a “completion guarantee” to the project’s financier, Fortress Investment, which made the city financially responsible for delivering the village.
“We’re on the hook for this project, good or bad,” Meggs said.
But though he wouldn’t go into the details of the financial arrangement between the city and Millennium, the project’s builder, Meggs suggested Vancouver taxpayers won’t be hung out to dry if condo sales turn a profit.
“At this point the city will get its money out before Millennium does,” he said. “It’s not like the city is left with the leftovers. If the project is making money, the city will be making money.”
So far, 265 out of 737 high-end condos have been presold, according to Bob Rennie, owner of Rennie Marketing Systems, the company responsible for selling the units.
He added that current presales have been for mostly lower-value properties and plans are to sell higher value waterfront units at a later date.
“We never intended to have the village sold out in 2010,” Rennie said. “It was always going to be phased.”
Despite the city’s obligation to complete the athletes’ village by next November, Rennie said it’s highly unlikely that taxpayers will have to cough up the full cost of the project.
“To lose $875 million, [the city] would have to build the village and sell it for zero,” he said, adding that such is a scenario is unlikely, given that the development sits on a prime waterfront location. “It’s very valuable real estate.”
A local real estate analyst said it’s difficult to estimate how much money the remaining condo units could generate. The analyst said the value of the units depends on how prices are set, how much money is owed on the project, and whether Vancouver’s currently depressed housing market can recover by 2010.
Non-Partisan Association councillor Suzanne Anton said yesterday the city will have to decide in 2010 whether remaining condo units are sold right after the Olympics or are held until a later date. Market conditions at the time will determine which strategy prevails, she said.
Anton was cautiously optimistic about the project’s financial outcome.
“There is an asset there which will be sold by the end of the day,” Anton said. “The best-case scenario is there will be money in the bank at the end of it.”
Geoff Dembicki is a staff reporter for The Hook.
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NicS
3 years ago
Hardball Behing Closed Doors?
How do we ascertain that the city is playing hardball with all the players in the Millennium project? Bob Rennie of Rennie Marketing, Millennium Developers, The Provincial Liberal Gov't, Fortress financiers, the Vancouver Olympic Committee, the IOC.
Lets remember that the Provincial Liberals have played a large role in directing how this and other projects were financed. P3's being Gordon Campbell's Liberals method of choice. Public Private Partnerships (P3's) are in big trouble around the world as the proponents credit has virtually dryed up. Check out The Livable Region (scroll down to posting) where much has been posted about how P3's are really just glorified Ponzi schemes.
Funny how that is just like what has happened and is happening with the Millennium deal. And the Prov. Liberals are still using P3's to finance other projects, such as the HWY 1/TransCanada expansion (again check out The Livable Region).
brg61
3 years ago
No More Secret Deals...
P3's are negotiated behind closed doors; this is the norm for corporate deals, but how can a government manage hundreds of billions in public funds the same way? I hate backroom handshakes between politicians and business persons. It doesn't matter which party has power, a scheme hammered out in this manner, even if it it accomplished the job better than expected, leaves too much risk for the people. Public-private-partnerships may serve the taxpayer and benefit the economy as intended, but the Campbell government's preference for keeping details secret must stop. This is how city and state "bosses" operated in another time and why the pentagon without srutiny paid $10,000-plus for toilet seats. For alleged savvy business people, the NPA and BC-Liberals clearly screwed up in the Millennium project. Will any among them own this mistake and acknowlege the lesson learned for future public projects?
realisticman
3 years ago
Where's the BC Libs involvement - exactly?
This is a City condo-village development with private and public land ownership. How is this a P3?
What is the connection with, as you say, The Provincial Liberal Gov't, Vancouver Olympic Committee and the IOC? Rennie is just marketing the condos for the developer. How can one play hardball with Rennie, he just gets a percentage?
The City has promised to provide housing for the athletes for a few weeks but it's the City calling the shots not VANOC or the IOC.
"After the 2010 Winter Games, the buildings will become permanent residential housing, with a focus on housing for families. It will be a mixed-use community and will contribute about 1,100 residential units (250 of which will become affordable housing, and another 100 units will become modest market housing).
By 2020, Southeast False Creek will be home to 12,000 to 16,000 people and willl have six million square feet of development. This will include:
* more than 5,000 residential units
* mid-size grocery store and community serving retail/services
* full-size community centre
* non-motorized boating facility
* three to five licensed childcare facilities
* two out-of-school care facilities
* an elementary school
* interfaith spiritual centre
* restoration of five heritage buildings
* 10 hectares of park land, including habitat, playgrounds and opportunities for urban agriculture."
http://vancouver.ca/olympicvillage/about.htm
Gordon_Ramble
3 years ago
Wow, I guess 75 cents on the Dollar
is better than nothing.
Gordon_Ramble
3 years ago
NicS ....... How P3's work
The Govt of the day throws big juicy contracts to companies owned/controlled by supporters and friendlys ... its happening with the Libs, and it'll probably even be worse under the NDP.