In my 15 years at Vancouver City Hall I have witnessed the Property Endowment Fund (PEF) make about $1.5 billion in real estate profits for Vancouverites. The PEF is the envy of cities from around the world, and it has created financial security for our city that you, me and the rest of the citizens of Vancouver will continue to benefit from.
What have you heard about this fund over the past 15 years? Probably nothing. No headlines. No press releases. An investment that has been extremely well-managed by our civil service, quietly accumulating hundreds of millions of dollars of value on behalf of the citizens of Vancouver is just not an item that will make the front page. But it's a great success story.
Instead, we've got members of the current city council telling citizens that the Olympic Village project will:
- Cause taxes to rise
- Drive the city to financial ruin
They are simply wrong.
A little background helps everyone to understand the city's finances. The City of Vancouver has two main accounts:
- the annual operating account which receives taxes and delivers services, and;
- the long term real estate investment fund through which Vancouver is the largest landowner in the city.
When I was first elected in 1993 the investment fund had just over $1 billion in real estate, when I left office last month this fund had grown to almost $3 billion dollars.
Citizens have been told the Athletes Village could see a $1 billion loss. This would have to assume the hundreds of brand new, green-design waterfront homes on some of the world's most coveted real estate would be worth nothing. Even if this were remotely possible, the citizens would still have made a half billion dollars in profits in 15 years!
But Southeast False Creek is just one development in the citizen's real estate portfolio, and the Athletes Village is just the first part of the project -- only 1000 units of the planned 6000 to be built. Some would have you believe that the hundreds of millions of dollars spent on seawalls, roads and sewers to prepare the entire site will only benefit the village. In fact, there will be more revenue generated from the thousands more homes to be built using this infrastructure over the next couple of decades.
Are the taxpayers at risk? Absolutely not. Are Vancouver citizens at risk? Yes. There is a good chance that in the short term they may not make $1.5 billion in real estate profits. It may only be $1.3 billion. How many cities would love to have this problem? In the long term however, the public and private sales will generate hundreds of millions of dollars on lands that we purchased for $50 million.
Members of the council have made serious allegations about this project. Their behaviour has only:
- fueled a wave of anti-Olympic sentiment, which was predictable given their radical underpinnings
- alienated potential purchasers in the village
- resulted in the loss of some of the city's best staff
Only time will tell who was irresponsible -- either me and my fellow councillors and past councils whose decisions brought the project into being, or the people currently generating headlines.
In time, I believe the citizens will proudly recognize Southeast False Creek as the most environmentally sustainable neighbourhood in North America. It is providing much needed market and social housing, outstanding public access to the waterfront, and a new community centre. It achieves all this while returning hundreds of millions to the citizens' long term investment fund.
Vancouverites will eventually recognize the real heroes of the project. They include the hundreds of men and women working diligently on the site today. They include Judy Rogers, the most competent city manager in the country who led the city through the process. And they include Jody Andrews, the miracle worker, one of the most competent and capable men ever to work for the city, who poured his heart and soul into making this project a legacy for us all.
Related Tyee stories:
- 'No Risk to Taxpayer' Vows Olympic Village Builder
City claims taxpayers' interests trump public's right to know about $100 million loan.
- Taxpayers on hook for $1B Olympic Village
- Olympic village official resigns; veteran city engineer wrote memo backing Millennium bid