City of Vancouver taxpayers are "on the hook for all" of the $1 billion Southeast False Creek Olympic Village, Mayor Gregor Robertson said Friday.
"The decisions of the previous city government have put the city at enormous financials risk, even as we were told in 2006 by our elected leaders at the time that the Olympic Village would be developed at no risk to taxpayers," Robertson said in a city hall news conference.
Robertson described a "complex three-way agreement" made in 2007 by the city, developer Millennium and New York-based Fortress Credit Corporation. The city made not only a $190 million financial guarantee but also a "completion guarantee" to Fortress.
"That effectively made the City of Vancouver the project developer from that point forward" and enabled Fortress to stop making monthly payments to Millennium in mid-September 2008, based on cost overruns and unspecified technical defaults.
The previous Non-Partisan Association majority city council, under Mayor Sam Sullivan, voted behind closed-doors on Oct. 14 for a $100 million emergency loan to continue construction. The remaining $21 million is due Jan. 15 for monthly construction costs.
The city is negotiating with Fortress to restructure a $458 million loan to complete the $1.075 billion, 1,100 unit condominium project. Robertson said the project remains on target for a Nov. 1 handover to VANOC, which will use the village to house 2,800 Olympic athletes during the Feb. 12-28, 2010 Games.
"They are running dangerously close to bankrupting the city," said 2010 Watch's Chris Shaw. "Members of (Robertson's) own party (Vision Vancouver) sat in on those decisions from 2003 onward. His party is as guilty as NPA."
The city promised to build athlete accommodation for Vancouver's successful 2003 bid to the International Olympic Committee. When it was chosen the builder in 2006, Millennium agreed to purchase and develop the land for $200 million and make a $29 million non-refundable deposit. Millennium is selling 730 condominiums and renting 120 after the Games. Another 250 units will used for social housing.
The village financing controversy became the dominant issue of November's civic election when information from the Oct. 14 meeting was leaked to the media. Robertson promised to disclose as much as possible of council's financing decisions.
Coun. Suzanne Anton, the last remaining NPA member from the previous council, said Robertson shares the blame for the funding troubles by not respecting the process.
"There was a lot of fairly irresponsible behaviour by some of the candidates and the current mayor in terms of their discussions about the in camera negotiations and I think that did have the effect of destabilizing the negotiations," Anton said.
City council meets behind closed doors at 9:30 a.m. Monday. City manager Penny Ballem will make a public presentation on the Olympic Village at 2 p.m. in city council chambers.
