Vancouver approves $100M bailout for Olympic Village developer
The City of Vancouver has agreed to lend up to $100 million to bail out the financially troubled company building the athletes village for the 2010 Winter Olympic Games, CBC News has confirmed.
The developer, Millennium Development Corp., is facing an estimated $60 million in cost overruns on construction of the village.
At a mayoralty debate Thursday morning, Coun. Peter Ladner, who is the chair of the city's finance committee, refused to answer reporters' questions about the loan, after the story broke in the Globe and Mail hours earlier.
Critics say Vancouver taxpayers should be outraged by this, but not only at the municipal government.
"I think it starts with [Premier] Gordon Campbell," said B.C. NDP Olympic critic Harry Bains.
"Local governments continue to be asked to bail out the provincial government for their failures and also to cover them up, basically going behind closed doors and making decisions on taxpayers' dollars…and not even coming clean with the taxpayers."
The CBC confirmed the loan was approved at a recent closed-door meeting at city hall.
Ladner would only confirm money from the city's property endowment fund had been used for the project already.
"It is equipped to take situations like this, and make loans like this," said Ladner.
Vancouver city duty manager Jody Andrews said Thursday the Olympic village project is still going smoothly.
"I'm telling you that the cranes on this project are still turning," he said. "The business deal remains the business deal that we started with on this project. The taxpayer is under no additional exposure and it is being completed on schedule."
A statement issued by the city Thursday says the "financial and schedule risks assumed by the city with respect to the Olympic village remain unchanged."
Despite the financing troubles the project is experiencing, Ladner said he believes it is still commercially viable.
"It's a tremendously desirable place to live. It's 60 per cent sold, it's on the waterfront of Vancouver."
Ladner also pointed out the development remains an asset of the city.
"The city still owns all of the property, the city still owns the commercial section of the development and it will be getting a billion dollars of marketing over the next two years."
The developer plans to sell the units in the village after the Olympics as condominiums, but in recent months Vancouver's real estate market has been hit badly by the global financial crisis, throwing the long-term financial stability of the project into doubt.