The city of Vancouver has signed the paperwork to conclude one of the sorriest episodes in its history. And in the end, the most polite thing that can be said about the Olympic Village imbroglio is that it didn’t turn out to be quite the financial bath predicted.
Although it will end up being bad enough.
Mayor Gregor Robertson announced Monday that the city had paid down the $690-million debt it inherited when it had to take over the troubled project from its bankrupt developers. Beyond that, the city was able to recoup an additional $70-million. What the mayor’s press release didn’t mention was the $170-million that the original builder, Millennium Development Group, agreed to pay for the site of the condominium complex – but never did.
That was money the city was never going to recover. What we also don’t know is the various ancillary costs entailed in the course of rescuing the project, such as staff time and related payments. Bottom line: Taxpayers are out north of $100-million.
The city was able to draw the curtains on this played-out drama after agreeing to sell the remaining 67 condos at the Village for $91-million to Vancouver Canucks owner Francesco Aquilini. The Aquilini family has moved into real estate in a big way, and is developing a group of rental towers around Rogers Arena.
The units at the Olympic Village are among some of the most attractive condos in the city.
“This is a good deal for taxpayers, and pays down the Olympic Village debt that many thought would not happen,” said Mr. Robertson. “As mayor, I’ve been determined to ensure that taxpayers would not be left on the hook for a single cent. I am proud to say we have achieved that goal, and have done so in a way that has created a thriving waterfront neighbourhood.”
Not quite but we understand and appreciate the mayor’s enthusiasm. Who wouldn’t want to wash his hands of this mess, which Mr. Robertson inherited when he arrived in office in 2008? One can perhaps take issue with some of the decisions that he and his Vision Vancouver party made as they tried to make the best of a hopeless situation – like insisting on building some of the most expensive social housing in the country on the site – but it needs to be repeated that this was not a scandal of the mayor’s making. He was just the poor sod given the job of cleaning it up.
It was not an easy one.
Mr. Robertson took over the project amid the throes of the financial recession, a time that defined uncertainty on many different levels. It was difficult to imagine then that condo prices that had collapsed with real estate around the world would rebound to levels that would make the project – built to incredibly expensive LEED gold specifications – financially viable again. The mayor himself talked about the “$1-billion disaster” the project represented.
As sales languished, the Olympic Village was dogged by complaints about shoddy workmanship. Because so few people had moved into the development it was labelled a ghost town. For the longest time, it was difficult to envision a day when the Village square would be packed with people and the cool new bars and restaurants destined for the area would have lineups to get in. But that day has arrived. The Olympic Village now is one of the most enviable residential districts in the city – albeit one with a notable and inglorious past.
While that history will one day be a mere footnote for residents, it will have a much more lasting impact on the affairs of the city. It’s hard to imagine a mayor or council ever assuming the kind of financial risk that the Non-Partisan Association government did when it entered into an agreement with the Vancouver Organizing Committee in 2002 to provide athlete housing for the 2010 Winter Games.
It was that arrangement that ultimately left the city on the hook when the developer ran into financial difficulties in 2008 as financial markets teetered. Suddenly, the city owned the project, which it had to complete in time to house Sidney Crosby and his fellow Olympic friends. It was quite a time.
Looking back, it seems almost a miracle that a little more than $100-million might be all that the city will have lost from this affair. (A thorough vetting of the city’s numbers is sure to take place). Early on, the betting was that number might be $300-million or more.
While a loss that is considerably less than anticipated might seem something to celebrate, that wouldn’t be appropriate. Cheer the fact the city has ended its involvement with the Olympic Village. But it was an expensive lesson.