I have just received a few answers to yesterday's questions re: estimated Olympic Village losses.
1. The loss calculation apparently ignores the outstanding land payment of $178 million. However, it does include repayment of a pro-rata portion of the city's costs associated with servicing the OV portion of the larger Southeast false Creek property.
2. It is not clear how the revenues from the condominium sales are calculated. Presumably they are based on the numbers provided by the appraisers. However, I now read that 20 condominium units that were to be sold, have been rented. It will be interesting to see how the losses associated with these units are being calculated. There are going to be losses since the rents will not cover the unit costs. (They may be offset by increased sales prices five or ten years from now, but this remains to be seen.) Furthermore, the fact is, notwithstanding the initial weekend's sales success, there are fewer sales today than announced after the opening weekend. Notwithstanding the appraisals, it may be that prices may have to be further reduced on some of the unsold units if the project's adverse publicity continues; also although there are some very good units in the two waterfront buildings designed by Arthur Erickson, many of the remaining units have less than desirable plans and outlooks.
3. The loss calculation does not include any losses associated with the social housing. So far, the city has committed approximately $64 million in subsidies, and given that 144 of the 252 units remain empty, additional subsidies will be required.
4. It will be interesting to know what provision is being made for the holding costs, and other related costs.
So will losses be restricted to $40 to 50 million? I don't think we are going to know for quite a while...certainly not before November 2011! However, I do hope the city will share the financial information that was used to calculate its projections so that knowledgeable real estate people can asses what is continuing to be a very political matter!