Rumours are rampant about pending changes at the development at Southeast False Creek known as Vancouver's Olympic Village. Some say that the City of Vancouver and the developer Millennium are taking a huge bath on the project. Others point out the bumbled social and rental housing component has made even getting units for cheap a huge hassle. The following is clear, however: condo sales are flat; the marketing (for now) appears to have dried up; those social and rental housing units still sit empty after months; the Village is a ghost town; and the whole project is bending under the weight of expectations.
Some are asking, should Mayor Gregor Robertson have skipped to Asia on a $120,000 junket while this potential political crisis festers at home?
The Olympic Village has been the foremost whipping tool in Vancouver politics for the past several years. Last year this innovatively designed, environmentally-friendly neighbourhood, once considered a "jewel", was described as a billion dollar blunder that according to Mayor Gregor Robertson the City was "on the hook" for (note to Vancouver Sun: can you put this story back on your website?). In hindsight it would appear that by treating this project as a political sledgehammer, Robertson and his Vision colleagues are the cause of the biggest white elephant in Vancouver's history.
Robertson's Vision Vancouver councillors were involved in a leaked document scandal surrounding the Village which enveloped all of the previous city council, and even resulted in councillors taking lie detector tests. While every member of the NPA caucus took the tests, Vision councillors refused to participate, effectively ending the police investigation of the matter.
Vision Vancouver repeatedly slammed the previous NPA council for conducting the city's financial affairs and making key decisions related to the Olympic Village during in-camera meetings. When Gregor Robertson took power his first act was to release all the minutes of those in-camera meetings. The strategy was highly successful at painting the previous NPA council as secretive and financially irresponsible (forgetting of course that Vision councillors gave their unanimous support on key Village decisions). Oh, how times have changed now that Vision Vancouver are the veritable model of backroom in-camera politics.
In his first and only political statement after leaving office, former Mayor Sam Sullivan commented in January 2009 that Vision's politicking on the Village would "[alienate] potential purchasers in the Village". Regrettably, it appears Sullivan's prediction was accurate.
It was Sullivan's government that dispensed with the previous COPE/Vision council's commitment to two-thirds non-market and social housing. The twenty percent social housing the NPA government committed to seems positively generous compared to the paltry 11% Vision Vancouver have promised.
It's possible that the biggest barrier to the success so far is the unique building form and character in the Olympic Village. The original Official Development Plan for Southeast False Creek was set out in 1999, and it called for more podium:tower built form like in adjacent parts of False Creek. In portions of the site it called for:
Towers of up to 76.2 m (250 ft.) should be permitted, providing that they are designed to minimize shadowing on public open space and on the waterfront pedestrian-bicycle system. Streets should be defined by lower building forms and tower bases...
For whatever reason, the COPE/Vision council threw the original ODP out (the image, right, shows an original model of the site – click for larger) and adopted a new set of guidelines recalling the low profile neighbourhood design of South False Creek west of the Cambie Bridge. Building heights were capped at twelve stories, making them much more expensive to build. Coupled with the aggressive timelines of the 2010 Games, the social housing commitment, and the City's promise to host the Olympic athletes within the Village itself, the die was cast for either a bold experiment in city-making, or a spectacular flop that should never be repeated.
Fast forward to January 2009, and the new Vision government at the reigns. Gregor Robertson argued that the financing with Fortress with its relatively high 8-11% interest rate was a bad deal for Vancouver. Until then staff felt that the rate was commensurate with the risk, as the developer did not own the land (the City does) and therefore could not use it as collateral.
Robertson & Penny Ballem lobbied the Provincial government to hold a special sitting of the Legislature in January 2009 to allow the City itself to arrange for its own financing of the Olympic Village (Fortress had been playing hard ball with the City for a loan guarantee). With a stroke of a pen the City of Vancouver became the financier on its Olympic Village. It was a bold move that was supposed to save citizens tens of millions in interest payments. However, by taking on the financing, Vancouver taxpayers may now be carrying hundreds of millions worth of additional liability.
Fearing that Vancouver would lose big time if the units were sold during a soft housing market, it was decided in early 2009 to forgo an aggressive housing sales plan during a soft condo market, and adopt a "take it slow" approach. Ironically, just as the Olympic fever waned the housing market spiked (a buying frenzy partly triggered by the July 1st adoption of the HST).
In hindsight, instead of throwing itself $30,000 parties at the Village, Vancouver should have "kicked into gear" and probably used the occasion of a "hand back" ceremony to drive serious interest in buying housing.
Since those exhilarating weeks just after the Games the narrative around Vancouver's Olympic Village just seems to get more grim. It began with social activists decrying Vision's "false promise" on social housing, then a new community centre opened with virtually no patrons to keep it busy, and finally rumours of big losses and the spectre of a "ghost town" reported nationally and internationally.
It doesn't sound good when the marketer's representative states:
"Incentives are yet to be determined, but they could include things like free washers and dryers"
Yikes! Will they be throwing in a set of steak knives and two months of free satellite TV next? What on earth will it take to move those units and get Vancouver's money back?
Despite having its reputation bruised by political opportunists, I'm confident Vancouver's Olympic Village neighbourhood is still a remarkable place that will one day hum with activity. It will become a place to shop, dine, live, work and play. It may also serve as a lesson to all future city governments that city-making is best left to the pros who really understand financing risk, and what the home purchaser is willing to pay for.
As for the politicians – especially the ones who rode into power running this place down – they should be banned from being involved in the Olympic Village in any official capacity forever more. Like everyone I want Vancouver to make its money back on this development. If anyone can do it, it's Bob Rennie. But if Bob needs some help getting the units occupied, then let's bring in some of Vancouver's A-list realtors to lend a hand marketing this puppy.
That's the only way out of the Olympic Village mess. Sell, baby. Sell, SELL!
For further background on the facts of how we got into this mess, read some previous feature reports regarding the Olympic Village development:
- Olympic Village decisions defined political differences
- Contradictions abound with Olympic spin out of control
- Geller's "reality check" on the Olympic Village
- Olmypic Village loan mess continues to confound
- Council's Olympic Village discussion must come out of the shadows
- post by Mike