Seven hectares of the 32-hectare Southeast False Creek development site will be transformed into the Olympic Village during the 2010 Winter Games. (CBC)

The City of Vancouver has been given the go-ahead to borrow the money it needs to complete the Olympic Village for the 2010 Winter Games.

After 20 hours of debate, the B.C. legislature on Sunday approved Bill 47, which gives the city unlimited borrowing power, as long as it uses the money solely for completion of the development that will house Olympic athletes, and is expected to total more than $1 billion.

The city is renegotiating a loan with the developer of the project — consisting primarily of about 1,100 condos — and a U.S. lender, but will need to borrow up to $458 million if those negotiations fail.

However, the bill places no cap on the amount Vancouver can borrow or lend.

Community Development Minister Blair Lekstrom, who introduced the bill, dismissed the idea it sets a dangerous precedent.

"This was a very extraordinary circumstance. I think that's fair to say. I don't think anybody would disagree with that. This bill is precise to this project and no other," Lekstrom said.

"I recognize the concern that was expressed. I think people did recognize that what was in the best interests of the taxpayer for the City of Vancouver was to move as quickly as we could and allow the local government, who is accountable to the taxpayer, ultimately, to act on their best interest."

On Saturday, house Speaker Bill Barisoff ruled the debate was an emergency so that the bill could be passed in one sitting, but that didn't prevent the opposition New Democrats from talking as long as rules allow.

NDP Leader Carole James and her caucus ultimately supported the bill, but James said the party is not happy with the way it was rushed through.

"It was important that we ask questions of this government. Voting in favour of this bill doesn't mean you give up public scrutiny," James said.

Hedge fund cuts off payments

The city stepped in after the waterfront project ran into financial problems and a New York hedge fund that was to lend the $750-million budgeted for the project cut off payments to the developer in September.

Since cash advancements to builder Millennium Development Corp. from Fortress Investment Group stopped, the city has been covering construction costs with a $100-million bailout loan approved during an in-camera council meeting on Oct. 14.

Cost overruns have pushed the project cost to $875 million. The Southeast False Creek development site, where the village is being built, is on city-owned land worth $200 million, putting the value of the whole development project at more than $1 billion.

The City of Vancouver planned to sell some of the 1,100 condos following the Olympics to recoup its investment, but the worldwide recession has caused housing prices to drop.

Under the city charter, Vancouver had been prohibited from borrowing all of the money needed to complete the project without holding a public referendum.

The bill relieves the city of that responsibility by amending the charter.

Premier Gordon Campbell said the legislation will allow almost 2,000 construction workers to keep their jobs in tough times, adding the project will enhance the city's waterfront for years to come.

The 2010 Olympics are in Vancouver and Whistler from Feb. 12 to 28, with the Paralympics going March 12 to 21 in those cities.