Olympic Village Way Over Budget
Olympic Village way over budget
Athletes' housing already faces extra expenses of $60m to $65m
Katie Mercer, The Province; with files from reporter Kent Spencer
Published: Tuesday, October 07, 2008
The Olympic Athletes Village is facing cost overruns of between $60 million and $65 million, the city of Vancouver's real-estate director, Michael Flanigan, said yesterday.
"Our project is being managed very well, but we have seen some increases and they have to be dealt with," said Flanigan.
"Those cost increases are being dealt with, but by Millennium Development and their lender."
Construction is well under way in southeast False Creek for the 2010 Games.
The Millennium group leads a consortium of 17 firms building the Olympic Athletes Village, a $1-billion, 1,100-unit development over seven city blocks in southeast False Creek.
Fortress Investment Group, a New York-based hedge fund and private-equity company, is financing the development. In case of a default by Millennium, Fortress has said it has the resources to complete the project, said Flanigan.
"They have their profit out front, their equity in the deal, their entire corporate guarantees on the line, personal guarantees on the line," he said. "All this will be exhausted before the taxpayer will ever be exposed for a dime.
"We don't see there is a risk with taxpayers."
The city is responsible for seeing the development through to completion. It has signed a deal with the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games to hand over the keys to the village by November 2009.
Flanigan said there is what he called a "doomsday plan," in which the city would step in and fund the project. He did not want to talk about it.
Councillors discussed the development in-camera last week. Flanigan would not say what was discussed, but said the city is providing oversight between Millennium and Fortress.
Mayoral candidate Gregor Robertson said it sounds like there are more problems between Millennium and Fortress than the city is letting on.
"I'm calling for a transparent process," said Robertson. "The public has a right to know what the potential dangers are . . . We need to understand what has taken place here."
Mayoral candidate and city councillor Peter Ladner called the situation "distressing." He said Millennium is currently negotiating with Fortress for further funding.
"This is one of many projects around the city and the world that have been challenged by the current credit crisis," he said.
"The city is secured not only by guarantees from Millennium, but by this project's status as one of the most desirable real-estate locations and most sustainable developments in the world."
Provincial NDP Olympic critic Harry Bains said Vancouver and VANOC are keeping people in the dark.
"I'm very concerned about behind-closed-door meetings [of Vancouver city council]," he said. "Many people are worried about their own finances. They may have to come up with more money."
Millennium could not be reached for comment.
The athletes' village will feature some of the highest green-building standards on the continent. The units will become private residences after the Games.
In Richmond, the Olympic oval, budgeted at $155 million in 2004, jumped to $178 million. VANOC will contribute $63.2 million, with all the other costs to be contributed by the City of Richmond.
COMMENTS ON THIS STORY
(From The Province website)
peter
Tue, Oct 7, 08 at 09:34 AM
not surprised these clowns running it dont care tax dollars open cash flow paying for this party for a long time into the future
Don
Tue, Oct 7, 08 at 09:44 AM
Its too bad that the small percentage of B.C. folks that voted "yes" for this big waste of money were not on the hook for any additional costs.
Jimmy O'Ptomist
Tue, Oct 7, 08 at 09:59 AM
Ooooh! I hope the Campbellites break the GlenClark record on cost overruns! I thought it would be the convention centre, but maybe it'll be the athlete's village! Not that I care -- I'm old and have no kids. Someone else's kids'll pay for the olympics...
Biteit
Tue, Oct 7, 08 at 10:27 AM
What do people expect with a former government employee at the head of the construction department at VANOC. start taking money out of his million dollar salary. Long gone are the days of "construction being within budget", now are the days of "too late to stop now". It is going to be a very long year and a half if every little cost overrun, VANOC screw up etc are reported, lets find some real news
Luge Master
Tue, Oct 7, 08 at 10:34 AM
Well, I've been saying it for a long time now, "Just wait to see the overruns." This is just the beginning, folks. The days to come will shed ever increasing light on this fiasco called the Olympics. Get out your wallets because the tax payers are going to pay and pay and pay and pay...................... Carbon tax and green levies go straight into the tax coffers. That's one way you'll pay. Taxes raised on the fear mongering of an exVP of the USA. The government caught on to how easily the public is bamboozled and jumped on the bandwagon. Now those ill gotten tax gains will be shunted over to pay for Gordo's ill conceived Olympics. This is just the tip of the iceberg, just wait until the rest of the overruns come to light. You will see your tax dollars headed down the toilet faster than a gold medal luge ride !!!!
krmd
Tue, Oct 7, 08 at 10:56 AM
Living in Richmond I can hardly wait to see my taxes increased for years to come to pay for the Oval. This pales however to what Vancouver taxpayers are ultimately going to get hit with because of the "party". Maybe the members of the Vancouver Club will help out. I sure hope other countries stop getting blinded by the IOC hype and how they will benefit from signing on as "hosts".
SHW
Tue, Oct 7, 08 at 11:23 AM
All I can say is, ... those of you who wanted the Olympics in your backyardyard, ante up. How the hell can there be overruns of over 60 million? ?? ~~WAVING HAND IN AIR ~~ ** I know.. I know !! ** I bet there aren't enough women in management ?
BCK
Tue, Oct 7, 08 at 11:38 AM
Having been one of the many lured to view the amazing show suites at Millenium Waterfront, I can't say that I'm at ALL shocked that this project is over budget...the smallest units started @ 800K...and with the market looking like it's failure is imminent, there's NO way that the suddenly de-valued units will be able to pay off the building and upkeep costs. You too can own a 500sq' apartment with a napkin sized patio on some of the worst land in the best location in Vancouver. ...for 800K...and this is for a 1bdrm and den....and that's just the BASE cost...that doesn't include the fact that your choices of flooring, cabinetry, and fixtures are ALL extra if you don't like the base offering (which you won't)....and don't forget to add another 200K on to this price if you'd like to be able to see that water.... Am I the only one who finds the housing market discriminatory? If I can't be lucky enough to earn 100K per year as a household, then I don't deserve to own real estate in a neighborhood that I can raise a family in? I hope this market crashes and crashes hard...
Delta Jay
Tue, Oct 7, 08 at 11:44 AM
The Olympics going over budget?.....NEVER saw that coming.....
islander
Tue, Oct 7, 08 at 11:57 AM
To think it would be on budget is crazy. Everything is over budget. Have you check the price of oil in the last year?
TAF
Tue, Oct 7, 08 at 11:57 AM
Flanigin says our project is managed very well. The next line says they are $65 milion over budget. Shows you that someone is lying.
Olympic Village way over budget
Tue, Oct 7, 08 at 12:08 PM
D'UH!
Mike
Tue, Oct 7, 08 at 12:09 PM
Wow, a government initiated project that is over budget. I've never heard of such a thing before.
gentlemen
Tue, Oct 7, 08 at 12:33 PM
"We are activating the "doomsday plan"...which, I am sorry to say, will result in the complete financial annihilation of the City of Vancouver" -a future address to city council by the City Manager
peeko
Tue, Oct 7, 08 at 12:43 PM
Over budget? Who woulda thought? Another example of mass brain de- evolution . And just in time for a global depression! Oh Boy!!
B.
Tue, Oct 7, 08 at 01:07 PM
SURPRISE!
allan
Tue, Oct 7, 08 at 01:11 PM
It's only the beginning.There will be more costs overuns. But because they have lied so much about the Games being on budget that they have believed their own lies.