The province has rejected the only three bids that came in from operators willing to run Vancouver's much-debated social housing at the Olympic village.
That leaves the city scrambling for a new solution to fill the 252 units in those three buildings, meant to be the city's legacy from the Olympic Games. They have been sitting empty for six months, after a lengthy negotiation process between the city and province on how to structure the bid process for non-profit operators.
The operators were supposed to provide $46-million in lease money up front, which the city is anxious to get as a down payment for the $110-million buildings - all part of a project that is financially stressed in every direction.
The startling decision on the social-housing operators also has councillors angrily asking why the province appears to be making it so difficult for the city to provide low-cost housing to people who need it, at virtually no cost to the province.
"This is astounding. The ink on these proposals is barely dry but already they're being declared a no-go," said Councillor Geoff Meggs. "And we're not even asking BC Housing to put anything in. We've provided land and beautiful buildings for free. I don't know how often a city comes forward with a building and offered to house people on the provincial government's waiting list."
Mr. Meggs said the city will find a way to get people into the rental units, more than half of which will be rented at below-market rates, with or without the province's help.
"If we can't work something out, we'll have to find our own way to do it."
Housing Minister Rich Coleman said Tuesday that two of the three bids that came in by BC Housing's Monday deadline were from operators who don't have the experience in operating such a complex mix of market and social-housing units. The third bidder wants to establish a co-op, which is not part of his ministry's mandate, he said.
Although neither Mr. Coleman nor the city would name the bidders, The Globe and Mail has learned that PHS, known as the Portland Hotel Society to many, was one. It is a well-known Downtown Eastside non-profit that has run BC-Housing-funded buildings for the hardest to house for years, as well as the Vancouver-Coastal-Health-funded supervised-injection site for drug users.
Another small non-profit, unknown to many people in the community, also put in a bid, while the Co-operative Housing Federation offered to run one building, the one designated to be almost all market units.
"We had hoped for a better outcome, but we just didn't find the right operators," Mr. Coleman said. "This is a mix of market and social housing and you need an operator that knows both. We didn't see any of the higher operators bidding."
The process of choosing operators has been lengthy and difficult. It took the province and city almost six months to work out an agreement, with the province pushing the city to relax many of its demands.
Even after the bid process started, the deadline had to be moved back three weeks because there were so many questions from potential operators.
Then, many of the 22 potential bidders who viewed the site in August decided not to bid on the project because, they said, they were concerned about running such complicated buildings with new kinds of systems for heating, water, and shading that make them more environmentally friendly.
City manager Penny Ballem said she found those concerns baffling. She was assured by BC Housing CEO Shayne Ramsay that the Olympic village social-housing buildings were no more complicated than the 14 social-housing buildings the province is constructing that have been designed to meet its new environmental standards for government buildings.