Vancouver taxpayers are on the hook for the entire billion-dollar Olympic Athletes' Village project after the lender cut off funding to the troubled development, Mayor Gregor Robertson said Friday.
Now, the city is scrambling to renegotiate its deal with Fortress Investment Group before Feb. 15, when the money flow is to evaporate and construction will be halted unless a new deal is in place.
"The Olympic village is a billion-dollar project, and the city taxpayers are on the hook for all of it," Robertson said. "We are financially and legally committed to completing this project."
Robertson and senior city staff revealed details of the deal negotiated by the city, developer Millennium Development and lender Fortress to build the 17-acre village, touted as a model of sustainability.
Fortress stopped in September doling out the monthly money needed to keep construction going after its agreement with Millennium went sour. Since then, the city has been paying to keep construction going, to the tune of $79 million over three months.
Next Thursday, the city will give the development another $21 million, the last of a controversial $100 million loan approved by council last fall. After that, it's unknown where the rest of the money needed to complete the project will come from, an estimated $458 million.
That, combined with the $317 million already loaned by Fortress and the $100 million being fronted by the city, leaves taxpayers with a combined financial liability of $875 million.
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This is just an idea, but maybe the city could appeal to previous Olympic sites to donate structures and stuff. I mean what happened to all the stuff they built in out of the way places like Lake Placid? Could they ship the more portable structures to Vancouver?
ReplyDeleteIts unfortunate that Canada jumped into the economic toaster on its own free will. Naive and incompetent politicians and business leaders in denial spell for total disaster.
ReplyDeleteCanadians are clueless what is going to hit them once the full extent of the economic meltdown becomes visible.
Cant they just get some TARP money from the chimp? Soon to be mutt...What's another 875M?
ReplyDeleteTARP $$ is for and from the USA. Vancouver is in Canada. As for other olympic villages, I have been to 3 (Berlin, Munich, and Lake Placid) and there are no portable or temporary buildings.
ReplyDeleteNice try....but the banks who got the TARP funds are mostly owned by foreign companies... and with the money having no strings attached you can not all of it was kept in the USA.
ReplyDeleteTrue, but no matter who owns them, the banks themselves are American businesses. Anyway, I doubt TARP money could be used ot bailout an American olympics, much less a foreign one. The howls would be more deafening than usual.
ReplyDeleteAll they have to do is become 1st Vancouver Olympic Bancorp and pull a chair up to the great American taxpayer teet...
ReplyDeleteThe Olympics were a complete bust in China and they will be even worse for Vancouver in 2010 since the world-wide depression impact will have been fully realized by then.
ReplyDeleteIf I were Vancouver, I'd start searching for a way out of this mess and get out of it quick.
Maybe move it back to Calgary to use an existing infrastructure rather than having to build it all over from scratch again?
Vancouver is in Canada for the moment.
ReplyDeleteVancouver is in Canada.
ReplyDeleteCitigroup is in Dubai. Citigroup got bailed out.
Canceling the Olympics could cause a systemic moral downturn in consumer attitudes.
Bail out the Olympics. It's what's right for workers and the economy.
In reading the comment section, all I can say is, it's not the end of the world folks. Far from it.
ReplyDeleteI live in Greater Vancouver.
Whoopy sh*t. This is a temporary impasse. Comes to worse, the Canadian Government will step in with a loan in the eleventh hour.
Canada is not a third world nation. Our GDP surpasses $1.4 trillion. In addition, you just might want to consider the following statistics:
- We have just under 200 BILLION barrels of extractable crude in the Province of Alberta alone. At future prices of $100 to $300 a barrel, we're talking $20 - $60 TRILLION dollars. What's more, there are assessors who claim Alberta has over 1 TRILLION barrels, but the Government is not willing to back this up yet. I wonder why?
- Along the Pacific coast of the Province of British Columbia (BC) there are 13 BILLION barrels of oil waiting to be harvested at some point in the future. Again, at the aforementioned prices, we're talking $1.3 to $3.9 TRILLION dollars.
- Alberta, Saskatchewan and Manitoba are major exporters of food crops, a depression-proof business, given the world's huge population and hefty appetite.
- Canada is by far the largest producer of uranium. In all likelihood, most of the uranium forming the US nuclear arsenal is from Canada. You're WELCOME America!
- Canada is a major producer of gold, silver and diamonds. Sorry South Africa.
- Canada is a major, if not the largest, producer of forestry products.
- BC is a significant producer of natural gas.
- Unlike the rest of the poor G8 nations, Canada generates nearly 60% of its electricity from hydro-electric dams. And there's room to increase that by quite a bit, particularly in Quebec. Incidentally, America doesn't have a hope in hell in duplicating this growth capability.
- Canada has a ridiculous amount of fresh water resources; America is piss poor by comparison and its government is green with envy; we know this.
- The list goes on and on, and I only have so much time.
The Olympic Village in question is in BC. What's $875 million compared to the trillions I've just enumerated? Answer: ABSOLUTELY nothing. Moreover, the Olympic Village is situated in prime, picturesque Downtown area land, which is extremely marketable, as Vancouver is in the top four most beautiful cities in the world.
Get over it.
Canada is sitting pretty compared to America. If I were American, I'd do anything to gain permanent resident status in Canada, where the future is.
Put a 30% tax on the export of B.C. Bud. You'll be in the black in a month!
ReplyDeleteLets see....1.2T GDP and they need 875B to finish a building a sporting venue...Nope, I see nothing wrong here...Move along...Move along people.
ReplyDelete$875M? Are we really wasting time talking about this? Geez, let's get a Wall Street Banker to return a call asking what they're doing with their $25B hand-outs first! At least this one is backed by a REAL asset!
ReplyDeleteMaybe the North American Union and the Amero will save the day....HAH!
ReplyDeleteRetired americans are spending less and less. Their CD's at the bank are earning less.The wave of baby boomers is not fueling the economy.Gold is not an answer to hedge inflation.
ReplyDeletePurchasing of hard goods is heading to saturation. Almost every one can afford modern appliances,electronics etc. Printing money will not let the Gov't go broke.
So----- what does this say about the economy?????