Once upon a time, the value of the Olympic Village land was part of the $1-billion equation that Vancouver Mayor Gregor Robertson talked about when first discussing the financial disaster the project represented.
That was back in January, 2009, when the mayor said the city was "on the hook" for the entire cost of the project, including the land. Remember that? That's when he wanted to make it clear to everyone what a horrible hand the city had been dealt by the previous Non-Partisan Association government. When the mayor thought he could capitalize politically on the Village debacle.
Now, he wants no part of it, likely over fears it might taint his re-election chances.
Last week, the Vision Vancouver government tried to spin a pretty picture about the losses around the Village. They were only going to be between $40-million and $50-million, city manager Penny Ballem told reporters. Except she forgot to mention that the city was not going to recover the $180-million still owing on the land.
So when The Globe and Mail reported that total losses were actually $230-million - at minimum - not the $50-million the city was indicating, Ms. Ballem felt compelled to hold another briefing Tuesday so she could present her version of how the losses were calculated.
We learned that the city paid $30-million for the land at the time it was assembled. It sold it to Millennium Development Corp., for nearly $200-million in 2006. Millennium only paid $29-million, promising to pay the balance at a later date. As we now know, of course, Millennium was forced into receivership and the city had to take over the project. And the balance of the purchase price of the land was never made.
But what Ms. Ballem wanted reporters to know this week was that the nearly $180-million that was owed (including interest) was only an "aspirational" figure. Money the city "hoped" to get. The fact that the city received roughly the same amount that it originally paid for the land effectively made the deal a wash.
At least, that's how the accountants view it, she said. There is no loss registered on the city's books.
Well, accountants can do wonders with numbers and with the help of devices like write-downs can make the ugliest of pictures appear not nearly as bad. But there are lots of people in this city, including developers, academics and plain old citizens who hold a much different view of things. Their view, which is one I share, is that the city lost the $180-million it was owed for the land pure and simple.
To try and frame it any other way is absurd.
Let's say I bought a plot of land for $10,000 and it was eventually appraised at $2-million. I put it up as collateral in a real estate deal that goes bad and I lose my land. Would I tell people I only lost $10,000 because that's all the land cost me when I bought it? Or would I tell people I lost $2-million because that's what it would have been worth had I sold it. I'd feel like I lost $2-million.
The land upon which the Olympic Village is built is one of the choicest pieces of real estate in the world. In 2006, it was the jewel in the city's available land bank, a prized asset. The city no longer has that asset. It lost the opportunity to make $150-million to $200-million with that land. I say you don't determine the loss based on what you paid for the land when you bought it but what it was worth when you lost it.
In the end, the city didn't make a dime from this land. How is that not a loss? And we haven't even discussed the tens of millions the city spent assuming it was getting $200-million for the land.
Vancouver taxpayers deserve a full, non-political accounting of this fiasco. It was their money that went down the drain here and they have the right to know where every dime of it went. Only then will we understand the full scope of this debacle, which could be useful in avoiding similar ones in the future.
The province should appoint someone like former B.C. comptroller-general Cheryl Wenezenki-Yolland to come and do a full audit of the Olympic Village books.
I believe there's a good chance any review will show that the financial bath taxpayers took here is into the hundreds of millions.
Gary Mason