Frances Bula recently wrote a Globe and Mail column about the city's determination to fight a lawsuit that has been brought forward by a lawyer acting on behalf of 70 disgruntled purchasers. The suit claims that the buyers should be allowed to get out of their purchases for various reasons including the fact that the city was not named in the Disclosure Statement as the developer, and the many deficiencies that have not been repaired.
Frances also posted some additional comments on her blog, linking to the G&M story. The first comment came from a Bobbie Bees.
Bobbie Bees // Apr 27, 2011 at 8:41 pm They should just bulldoze the whole lot and put up an amusement park. We could call it NPA Land.
Rather than head off to the gym, I decided to respond. Here's what I had to say:
Bobbie Bees, this is a very odd comment, and it probably doesn’t deserve a response, but I’ll respond anyway.
As PGH implies, the planning and development of the Olympic Village has spanned many administrations. Indeed, Larry Campbell’s administration deserves the credit for proposing the current plan comprising a highly sustainable, alternative building form of development.
As I have previously noted on this blog, one prominent Vancouver developer told me that he did not bid on the land because he thought that the Campbell administration was taking too long to get the plans finalized and he worried there would not be time to complete the project in an orderly fashion before the Olympics deadline.
When the NPA came into office, they did make changes, especially to the social and income mix. They cut back on the number of subsidized housing units, and some of the other amenities, given the absence of funding from senior governments. However, they did not reduce the ‘sustainability features’.
The selection of Millennium did occur during the NPA administration, and the buyers who are now suing purchased during the NPA Administration.
When Vision took office, measures were taken to ensure that the pre-sale buyers could not ‘walk away’ from their purchases. As I noted in previous posts on this blog, the city was very careful to act in a manner so that the pre-sales would remain intact. If it hadn’t been for the fact that there were so many pre-sales in place, the city would likely have taken over the direct ownership and development from Millennium much sooner.
Indeed, one of the legal measures that the city took, which resulted in the land being leased, rather than sold until the project was completed and the sales closed, contributed to Millennium’s earlier difficulties in arranging project financing.
For these reasons, I am confused by the argument by the lawyer, acting on behalf of the disgruntled purchasers, that the city is the developer, and should have been named as such in the disclosure statement. The city was not the developer of the condominiums; it leased the land to the developer during construction; and it became the project lender; but it took extraordinary steps to ensure that it couldn’t be deemed to be the developer.
I am not a lawyer, but I’ll be astonished if this aspect of the argument is successful.
As for the deficiencies, there is no doubt that there are many. Water pouring through the ceiling sounds terrible, but water poured through the ceiling on opening day on a project that I built at Larch and 41st in Kerrisdale. Ironically, it’s been recognized by the Masonry Institute as one of the best constructed buildings in the city, but a backed up irrigation line caused the problem. I have not heard of any more complaints in the 13 years since it was completed.
This is not to diminish the deficiencies at the Olympic Village. There are many, especially since so many of the units were rushed to be completed at once. There is no doubt that they need to be addressed, and the city’s Receiver is carrying out a deficiency repair program.
I must say I do feel bad for some of the purchasers who bought units some time ago, and now see similar units (similar, but not identical) being sold for less than they paid. But this happens in real estate all the time. It happens in the stock market…trust me, I know only too well.
However, in the case of the stock market, I have bought shares at prices that will never recover. In the case of real estate, I am not aware of anyone who held onto a purchase for ten years or more, who lost money. Yes, there’s a short term loss…..but over the long term, real estate in Vancouver seems to eventually go up. I predict that over the long term, the prices paid will recover, and once the community is filled up, and the restaurants and shops are in place, people will very much enjoy living in what will one day be a very lively and successful community.
As readers of this blog know, I have been very critical of many of the decisions related to the Olympic Village. I continue to have concerns, especially related to the social housing units.
However, in this case, I am disturbed by the claims of the disgruntled buyers and their lawyer. As long as the city is committed to repair all deficiencies, I do not think they are entitled to get out of their purchases.
That being said, there is no doubt that the publicity associated with their claims is affecting the sales performance, which will ultimately lead to increased losses for the city. I do hope the city, the Receiver, and their many consultants and professional advisors are carefully considering what to do to address this significant new challeng
PS My Akamai stock is down 14.8% this morning. Who do I sue?