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Olympic Village May Not Get Finished


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The Government Speaker has reconvened the House for an extraordinary session for this Saturday at 12 Noon to amend the Vancouver Charter so the money can be borrowed.
See - this is how they do thing in the "host city" world. You put legislation in effect during the bid process which forbids government money from being used beyond a certain level. Then, the taxpayers feel safer and support the bid.

Once it's in progress, when things start to go bad - no problem - just convene the House and pass legislation "exceptionally" allow you to thumb your nose at the legislation you so highly trumpeted a few years back and use tax money afterall.

Incredible.

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Woes beyond our control: Ladner

Ex-councillor says Robertson using misleading info to blame predecessors

By Lena Sin, The Province

January 18, 2009 9:01 AM

Former Vancouver NPA councillor Peter Ladner says the city's new mayor is using misleading information on the troubled Olympic Village project to blame previous council members "for problems beyond their control."

Ladner was in charge of the city's finance committee when problems on financing of the village began to surface in 2007.

He has not spoken publicly about the project since losing the mayoralty bid to Gregor Robertson in November.

But last week, Ladner broke silence when he sent an editorial to the media stating: "No one was able to predict the unprecedented real-estate-market meltdown, credit freeze and skyrocketing construction costs that undermined the financial feasibility of the project."

The full editorial, titled Time to Focus on Solutions on Southeast False Creek, will appear in the upcoming edition of Business in Vancouver, the weekly newspaper Ladner publishes.

Problems surrounding the village were brought to the public's attention last fall, when Fortress Investment Group stopped lending money to developer Millennium Development Corp., citing cost overruns.

In a secret meeting in October, the previous city council approved a $100-million loan to cover Millennium's monthly bills.

Leaked news of the loan dominated the November civic election, during which Ladner, the NPA mayoral candidate, insisted the Olympic project was sound. He resisted all calls to release further details of the land deal or the loan to the public.

Robertson, the Vision Vancouver candidate, by contrast campaigned on the promise to assemble available information about the project and the city's financial status with it and to publicly release the info.

On Jan. 9, Robertson announced Vancouver taxpayers could be on the hook for the full cost of the development, now pegged at $875 million -- $125 million overbudget.

Ladner maintains in his editorial that the project is "still a development jewel" and that it's on track to break even. "To suggest the cost to city taxpayers will be anywhere near $1 billion is inaccurate, inflammatory and highly irresponsible," wrote Ladner.

"The $875-million outside cost estimate doesn't take into account the $70 million in equity Millennium has in the project, the $50-million contingency still to be released by Fortress and the $200-million-or-so guarantees the city has in the form of Millennium's other holdings worldwide.

"Add all that up, subtract anticipated price discounts, and the project is still on track to break even."

Geoff Meggs, now a Vision Vancouver councillor, said the mayor has not exaggerated the problem and that Ladner should accept some responsibility for exposing taxpayers to so much risk.

"The mayor has not suggested that taxpayers will lose $1 billion, he says we're responsible, which is true," said Meggs. "When people ask how we got into the situation we're in, we have to say the facts. We got here because it was decisions made by the last council. And it would be helpful, in terms of toning down the rhetoric, if he acknowledged that was the case."

The true cost to taxpayers won't be known until after the 2010 Olympics, when units in the village are sold.

lsin@theprovince.com

© Copyright © The Province

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A post from awwan from skyscraperpage:

VANOC's contract for the Olympic Village includes occupation for the Paralympic games as well. If that is the case, it is going to be a little while before owners are going to take possession of their spaces. I am also assuming that there will be a fair bit of deficiency construction work to be done after the athletes leave, so it could be safe to say that Millennium/Rennie (or whoever is doing the sales/marketing by then) will be waiting until at least after the Games end before they are marketing this again. That is still 14-18 months away. That is a long time. We are really only 4 months into this disaster in Canada and look how much has changed. My feeling is that by the time sales start happening again, while prices may not be at their peak, they should be at decent levels, surely enough to break even. And if that is not the case and the city takes a little bit of a bath, perhaps it serves them right selling the land for tens of millions above market.

Also, politics aside, it is completely irresponsible of the media to be throwing this $1 billion figure out there. It's $800 odd million, $200 million is NOT a drop in the bucket. Secondly, being responsible or "being on the hook" for whatever figure is different than losing that much money. And I don't care how you argue the way this is being displayed to the public is terrible. They see that huge figure and assume the city is losing that much money. Of course, they should know better, but they don't. The optics are terrible.

Side note: the media even tried to publish to the public that "the City's credit rating takes a plunge" when in reality, it had only been suggested by an expert that the city's credit rating might fall.

Another thing the media does not report is this:

$70 million in equity Millennium has in the project, and the $200-million-or-so guarantees the city has in the form of Millennium's other holdings worldwide.

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What Millenium properties have been put up for collateral? Can the City execute the sale of those properties to cover costs?

Clearly the City must have control over some of Millenium's assets during negotiations

Of course the city can sell those properties to cover costs: that's the whole point of collateral. Ownership of these properties would be transferred from Millennium to the City of Vancouver. And these properties are worth $200-million.

A list of Millennium's worldwide properties:

http://www.millenniumdevelopment.com/

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