UPDATE: Be sure to follow our tweets as details on this story are happening fast: @CityCaucus. Also read the substantial number of comments on the post below from our readers.
We said it on Twitter on Sunday that another big shoe may drop at the Olympic Village. Now @SunCivicLee has tweeted out that the Village project has been put into receivership by the City of Vancouver. Says the Vancouver Sun's Jeff Lee:
The long and troubled history of the Vancouver Olympic village took another severe turn Wednesday when the city put Millennium Water, the owners of the village, into receivership.
The action came as the city grew increasingly concerned about the company's prospects to repay nearly $750 million in taxpayer-provided construction loans, amid a stalled agreement over how to market the 480 remaining units in Southeast False Creek.
Under the terms, Millennium Water voluntarily agreed to the receivership, in which Ernst & Young will take over management of the project.
However, the city had warned Millenium's owners, the Malek brothers, that it would force the company into receivership unless they agreed to certain terms. The city had a date with B.C. Supreme Court Wednesday afternoon but the Malek brothers agreed to the terms shortly before court was to sit.
Last month in response to an article by developer Rob Macdonald in the Vancouver Sun, we shared Rob's views that a "Toxic Mud Fight" would ensue, and the mother of all legal battles would cripple the City. It would appear that a big legal battle with the developer has been avoided, but at what cost? Did the City get anything from Millennium, or are they walking away with the majority of the assets with taxpayers holding the bag?
And what of the deal with Ernst & Young – how much is that going to cost Vancouver?
To see that the City is taking over this project, after assuring Vancouver voters that they had a plan to rescue and successfully market the Olympic Village, is absolutely shocking. Mayor Gregor Robertson's public statements last year describing the Village as a "train wreck" and saying citizens would be "on the hook" for a huge bill, have according to critics cost Vancouver taxpayers nearly $200 million in value for this project.
As Coun. Suzanne Anton stated in Jeff Lee's story: “Ever time he opened his mouth he put a black cloud over the village.”
The question we should ask about the Village now is, who is in line to take it over? There have been rumours for weeks that Millennium would be pushed off this project so another developer could step in. Who might that developer be, and how much have they donated to Vision Vancouver?
Taxpayers must also know whether the units will be put up for sale, or if Vision Vancouver will keep many of them aside as rental properties as part of a boast of creating "affordable housing."
This Olympic Village calamity accelerated after the decision by Vision Vancouver to use the Olympic Village as a blunt instrument in the dying days of their 2008 election campaign, as Gregor Robertson wallowed in the embarrassment of his Skytrain fare evasion scandal.
One hopes that this will stick with voters this time next year, as they take stock of how they were duped by Robertson and his Vision colleagues, and the bills for running Southeast False Creek keep coming in.
For more background on the facts of how we got into this mess, read some previous feature reports regarding the Olympic Village development:
- Which way out of the Vancouver Olympic Village mess?
- 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
Mayor Gregor Robertson promised during the election campaign that he would negotiate a new deal and that it would ensure financial security for the Olympic Village development. Here are some of Robertson's quotes of interest given that the project is now in receivership.
"There is some concern we're going into another (economic) dip...(But) I have full confidence in the developer and the marketing taking place." - The Province
"I campaigned on the promise that I would provide to the public as much information about the Olympic Village finances as possible." - Georgia Straight [Check out this video after you read this quote]
"Council has directed city staff to negotiate a financial arrangement that will best protect the taxpayers of Vancouver." - Georgia Straight
"Over time, [the project] will return value. It's really a question of what steps need to be taken while the market is soft," Robertson said. "We need to be patient and remain methodical." - The Province
"The city doesn't care how the loan is paid back, whether it is from the sales of condos or from personal assets. We expect to be paid back in full and it is up to Millennium to sort out how they do that....Obviously we hope to find an agreeable solution to this. They obviously have other assets in the region that the city has registered on, but beyond that we are still working on the rest of their assets." - Vancouver Sun
“We’re supporting Millennium to make sure those sales happen. It’s their job to get them sold and they owe us the outstanding balance of the loan.” - The Province
Speaking about the new Olympic Village financing deal he negotiated...Robertson said "It also gives us the flexibility to negotiate better terms after the Olympics, coming closer to ensuring that the taxpayers of Vancouver reap the benefits of this investment. We have gone from an agreement that was clearly not in the interests of taxpayers, to an agreement that puts Vancouver’s taxpayers first." - news release
"So, what does this [new financing deal] mean for Vancouver? It means no completion guarantee to Fortress. It means no financial guarantees to Fortress. It means we negotiated a great deal for taxpayers...”
"And it means we are now in control — that we have the flexibility we need to achieve the best return on investment for the people of Vancouver." - news release
- post by Mike