Olympic Village social housing under construction (Oct 2009)
GlobalTV News first broke the story of backroom in-camera secret negotiations happening in regards to the Olympic Village development. This was followed by vehement denials by Mayor Gregor Robertson and City Manager Penny Ballem. As this story is unfolding this afternoon everyone is still confused by the City's bizarre response.
According to an early report by the Globe and Mail, Millennium Development Corp. was being required to pay $561 million dollars immediately. The City acknowledged that the developer did not make its first full $200 million loan payment as far back as August 31st, falling short by $8 million. Then they updated to say that Millennium had paid another $5 million for a total of $3 million outstanding.
Mayor Gregor Robertson in full spin mode said the reason for the admission now and not last week is because he wants his government "to be open and transparent". In actual fact, they've known the situation for weeks, and it appears they are only now coming clean publicly because they got caught.
This situation will likely have HUGE implications for Vancouver taxpayers. See Frances Bula's updates on this story on the Globe and Mail website.
Here is what Mayor Robertson told CKNW radio this afternoon:
I have faith that we're going to continue on here. We have the best marketer in the country in Rennie Marketing Associates on this. But obviously we need a new sales plan. We want to see that urgently. I think it's clear that the current arrangement is not producing results. We don't have a lot of time to waste here.
Now contrast that with the Mayor's go slow, we need time comments from just last week in The Province:
Vancouver city council and Mayor Gregor Robertson are taking a wait-and-see approach as Millennium Developments prepares to offer a fall incentive program to spark sales of 480 remaining Olympic Village condos in advance of a pending loan repayment deadline.
"We need to be patient," Robertson said Saturday. - Sept 26, 2010
In the days following the news of a secret backroom meeting on the Olympic Village project, here is what a few other folks at City Hall told the media:
So far the indications are that we are on track and nothing has changed from prior reports to council. Opportunities always arise and it is prudent for any city to look at all opportunities. - Vision Councillor Kerry Jang - Vancouver Sun Sept 23, 2010
There is some concern we’re going into another [economic] dip,” Robertson said last week. “[But] I have full confidence in the developer and the marketing taking place. - Mayor Gregor Robertson - The Province, Sept 30, 2010
But there is no plan to call the outstanding balance of the city's loan to Millennium and the developer remains the owner of the project, Ballem told Vancouver Sun Sept 23, 2010.
Millennium is certainly not in default of any $200 million. But as you know, sales are slow and we have actually done a great job in this environment with the pre-sales that have closed. We're working with Millennium every day to optimize what will happen at the village. I don't think there is any mystery about it, it is a very difficult real estate and economic environment and there is not any developer in town who is enjoying a breakthrough season. - City Manager Penny Ballem - Vancouver Sun
No decisions have been made, but all of those options had always been potentially there. - Vision Councillor Geoff Meggs - Globe and Mail - Sept 24, 2010
The city says that Millennium is not in default on the loan. - Globe and Mail - Sept 24, 2010
And check out this video of City Manager Penny Ballem being interviewed by GlobalTV after it was revealed council held a backroom meeting on the Village development. We also now have a copy of the PowerPoint presentation delivered to the media. To access it click here.
24 Hrs has also posted up an official statement from Millennium Development:
We have heard the City’s concerns today about the taxpayers investment in this community, and share the City’s interest in protecting the value of the asset for the public and Millennium. We care passionately about this project and what we have accomplished here.
Not everything in an accountant’s report describes how we arrived at this place. There have been many hurdles to get over – including delivering the Olympic and Paralympic Village on time, which we did. We created the Olympic Village – now called Millennium Water – for Vancouver, for British Columbia and for Canada. That commitment has never changed.
We are in active negotiations with the City.
While we are in negotiations with the City, we understandably will not have a lot to say publicly. However, in the weeks to come, we will continue to work tirelessly with the City to develop a mutually acceptable plan that protects the value of the asset for all stakeholders.
We will make ourselves available to the media for further comment next week.
Leave your comments below. More to come on this breaking news story as it becomes available.
For further background on the facts of how we got into this mess, read our previous feature reports on the history of the Olympic Village:
- Which way out of the Vancouver Olympic Village mess?
- Olympic Village decisions defined political differences