The City of Vancouver says there won't be any Olympic-sized profits coming from the troubled Olympic Village in False Creek.
The project — once forecast to yield millions of dollars in profit — is instead mired in multimillion-dollar cost overruns, according to a consultant's report released Tuesday.
Vancouver Mayor Gregor Robertson said the best-case scenario is that the city will break even on its sizeable investment.
"If the market does bounce back, and it's strong, and we are able to sell all these units in the next year or two, we could recoup our costs and break even on this project," Robertson told a city hall news conference.
The original plan was for the Olympic Village to be completed for $950 million, including the high-priced False Creek land it sits on.
City manager Penny Ballem said Tuesday the total price tag is expected to balloon to almost $1.2 billion by 2013.
The report by the city's auditor, KPMG, pointed to a failure of due diligence on the part of city staff when they selected Millennium Development to build the 737-unit project. Specifically, the city did not determine if Millennium had the financial capacity to deliver on such a large-scale development.
Ballem said the city is now doing things differently.
"Procurement in the city is done by different departments, different agencies, and there is no standard process. And all of that is in the process of being changed," Ballem said.
As part of the business plan, units used to house Olympic athletes will be sold after the games are complete. The man responsible for making those sales says he remains confident.
"The market has been through a very positive comeback," said Bob Rennie, president of Rennie Marketing Systems.
"When you look at it, if the city had to invest money somewhere, and Millennium had to invest money somewhere, it's a pretty safe place. So I believe we will be ok," Rennie said.
Rennie said more than one third of the 263 units have been sold to date.
He plans a major sales launch for May 2010 once VANOC has finished with the Olympic Village.