Olympic Village Gets City of Vancouver Bailout

There is a big controversy in Vancouver that exploded yesterday. In an October 24th in camera meeting, city council decided to loan up to $100 Million to ensure that the Olympic Village is completed on time.

The Olympic Village is a market housing development called Millenium Water. For the duration of the Olympics, the development will be home to Olympic athletes. At the completion of the Olympics, the village will be turned over to private owners. There will be 15 to 20 permanent buildings and 1,100 individual units.

It would appear as though the $1 Billion project is 7% over budget at the moment. The city has been in negotiations with Fortress Investment Group, the financial backer of the developer of the project Millenium Development Corp., to find a way to complete the project on time. The $100 Million loan is in addition to the $190 Million that the city has already put up as a loan guarantee.

Interestingly, in an article from way back on January 30th, 2003 the Vancouver 2010 Bid Corporation told the Georgia Straight that, “The developer would be liable for any cost overruns with regards to the athletes’ village.” Apparently, this is no longer the case. The lending environment has changed drastically since 2003 with the fallout of the US credit crunch. Developer’s are finding money much harder to find…and I’d say that this is clearly another example of how we are being affected by what’s happened in the US.

Of course, what’s the alternative? If the city did not step in to help the project complete we’d have a massive project that is nearing completion come to a standstill. Hundreds of construction workers would be out of work, and we’d be unable to move forward with the Olympics at all (unless there was an emergency athlete billeting program started up).

I think that it’s unfortunate that this information was all held private. The only reason that the information came to light was because someone leaked the information from the in camera council meeting to the Globe and Mail’s Gary Mason. It makes one wonder what else might our politicians be keeping from us?

You can read more about the situation with these great articles:

This is the article that broke the story from Gary Mason.
Here’s the first reaction from the Vancouver Sun.
And then some great stories on the issues from Charlie Smith at the Georgia Straight.
CBC News coverage of the story.

More Info on Vancouver Real EstateShould you want to learn more about the Vancouver real estate market generally you can check out this page. You can also review all of the statistics for Vancouver East and Vancouver West broken down for you here:

Enjoy Vancouver real estate statistics? You can find all of the latest stats by area right here: