More cost overruns at Vancouver Olympic Village
Affordable housing will cost $15M more than planned: report
Vancouver city council will debate a report Thursday detailing the need for almost $22 million in new funding to complete the city-backed portions of the Olympic Village.
The administrative report, which was completed May 25 and will be presented to the standing committee on city services and budgets Thursday, outlines the additional funding needed to complete the Southeast False Creek development.
City council will be asked to approve $21,895,200 in new funding to complete the public portion of the development that will house athletes during the 2010 Winter Games.
With the current budget increase, taxpayers will be on the hook for a total of $45 million in cost overruns accumulated since the project began in 2005, said Coun. Geoff Meggs.
"What stunned me when I read the report late yesterday was that the project office [overseeing the development] itself had gone over budget early in 2008," Meggs said.
"So, at a time when we were counting on the project office to manage the overruns in the Millennium [condominium] project and so many other areas, they themselves didn't have approval, as far as I can tell, for their own spending."
Higher budget requested
The project office is requesting a roughly 37 per cent increase in its operating budget: from $3,490,600 approved in May 2005 to the $4,795,800 requested in the report. An increase of $1,305,200.
The affordable housing component of the development, 252 units in total, was originally budgeted to cost about $95 million and will now cost $110 million.
The report quotes, "escalating construction prices, change orders related to incomplete tender drawings and anticipated BC Housing financing costs."
An additional $5,520,000 will be requested to complete the civic centre, which includes a community centre, boating facility, daycare centre and restaurants. The civic centre was originally slated to cost $30.5 million and the report estimates it will now cost just over $36 million.
Dave Cobb, senior vice-president for revenue, marketing and communications on the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (VANOC), said his concern is less about the cost and more that the project will be completed on time for the Games.
"I mean, obviously, we would have the same concern as any British Columbian would have, but in our role as the organizing committee, the critical issue for us is will we get the units in time to convert them for Olympic use before the athletes arrive," said Cobb.
The proposed funding is in addition to the $100-million "bailout loan" council approved in October 2008 for the privately funded portion of the village being built by the Millennium Development Corp. after the hedge funds financing the condominium project pulled out because of the economic downturn.