Tuesday, April 29, 2014

Some further thoughts on Mayor Robertson's announcement that city out of Olympic Village without losing a cent!

It was interesting to read and watch the various media reports on the Mayor's announcement. I was pleased to see that despite the Mayor not addressing the fact that the City had to forgo the balance of the land payment, the media picked this up. No one seemed to accept his statement that he had rescued the project without it costing taxpayers a cent.

Perhaps the most interesting story was by Bob Mackin in the Tyee. He picked up on two things that neither the Mayor or Dr. Ballem mentioned publicly. The first is that there remains an outstanding lawsuit against the City from a number of disgruntled purchasers. Also, Aquilini didn't just buy the outstanding units. They purchased the company that was in receivership. Here's an excerpt from Mr. Makin's story: 

Ernst and Young vice-president Kevin Brennan does not do interviews, according to spokeswoman Lesli Boldt. She said the transaction announced yesterday meant the Aquilini family took over SEFC Properties Ltd. from the City of Vancouver and became the secured creditor. City hall, however, remains the defendant in the lawsuits."The court proceedings involve the City of Vancouver and the Salescos for the Village, not SEFC Properties. SEFC is not involved in the court proceedings," Boldt said via email.The $91-million amount compares with the $96.31 million of liabilities mentioned in the March 12 bankruptcy filing for SEFC. The filing mentioned $92.54 million in land and buildings and $2.77 million in cash.

As for other expenditures, in the City Manager's Oct 6 2009 report she noted that the City expected to spend an additional $321 million on the affordable housing, infrastructure, community centre and Salt building as follows: Affordable Housing $110 million; Community Centre $36M; Salt Building $15M and Infrastructure $160M. We do not know whether the projects were in fact delivered for these costs.

However, we do know that the City estimated a $64.1 million subsidy for the affordable housing and subsequently wrote down the cost of 84 affordable housing units. I am advised that to date it has not found someone to acquire the remaining units that it continues to subsidize.

I am also told the rent on the Salt Building does not cover the full cost. Finally, no one knows the City's potential liabilities on the pending lawsuit.

In other words, it was not at all correct for the Mayor to say taxpayers are not having to pay one cent for the Olympic Village. We have already spent tens of millions that have not been recovered, and may never be recovered, with other contingent liabilities.

I am not an accountant; but as a number of people noted yesterday, in order to find out how much the Olympic Village really is costing taxpayers it would be helpful if the City prepared statements for the full project, including the expenditures from the Property Endowment Fund.  Then we may have a better picture.

In the meanwhile, I do hope the Mayor stops telling us how he saved us from the misdeeds of COPE and the NPA. It's quite inappropriate, especially in light of yesterday's theatre.

Monday, April 28, 2014

Mayor Robertson tells media Vancouver taxpayers won't be left one cent of Olympic Village debt.

This morning I received calls from various media asking whether I could comment on a Press Release issued earlier in the day by the Mayor's office reporting that the City had paid off the Olympic Village loan and rather than lose any money as most analysts predicted, would make a $70 million surplus on the Olympic Village.

I was dumbfounded and really did not know what to say. While I was pleased the losses might be less than what was predicted by former City officials and real estate analysts, I refused to believe the City would not lose money.

Below is a portion of the Mayor's statement:

"This is a good deal for taxpayers, and pays down the Olympic Village debt that many thought would not happen," said Vancouver Mayor Gregor Robertson. "As Mayor, I've been determined to ensure that taxpayers would not be left on the hook for a single cent. I am proud to say we have achieved that goal, and have done so in a way that has created a thriving waterfront neighbourhood.

"It took a lot of work to get to this point, but it's great news for Vancouver taxpayers that we've paid off the Olympic Village debt and recovered an additional $70 million to go towards community amenities and public infrastructure. We are now officially done with our involvement in the project."

The problem with this statement is what it doesn't say. Yes, the City has paid down the loan. But what about the $170 million outstanding balance of the $200 million land payment? 

In the past, the City Manager has called this an 'aspirational' payment. I would agree if it had not been spent. However, I am told that all of the $170 million was spent on infrastructure serving this site. Indeed, a previous city report noted that every infrastructure cost item went over budget. (This happened because City staff and consultants were expecting such a large payment from Millennium they went all out on the shoreline, waterfront bridge and walkway, parks, community centre, etc.While one might call these expenditures an 'investment', the fact is the full cost was supposed to be recovered and it has not been.

The City Manager deflected this concern by saying this infrastructure will serve other portions of the site. Yes, this is true. But the fact remains if one fairly allocates the costs to date over the Olympic Village development area, the City is out of pocket many tens of millions of dollars for the infrastructure.

The there is the matter of the 262 units of Social/Rental Housing. Many will recall this was supposed to cost $65 million but ended up costing over $110 million. It's not worth $110 million. In fact, the City cannot find any non-profit willing to take over the social housing portion at anywhere near the price it paid. This too is a loss that will never be recovered.

When I tried to ask the Mayor about this today, he smiled and said "Hey you're not media!"  I guess he doesn't read The Vancouver Sun WestCoast Homes!

When I tried to ask Penny Ballem about the Social Housing costs at a 'technical briefing' she too did not want to respond. Frances Bula, who was sitting beside me said something to the effect this isn't what we're here to talk about. Instead, she was trying to understand the numbers that the City was presenting.

In fairness to Frances and most other media in attention, this is a very confusing matter and the City's presentation was very incomplete, to say the least. There was no briefing paper...just a hematologist at a whiteboard with a very faint magic marker.

I thought the magic marker was appropriate because if you believe the Olympic Village hasn't cost the city one cent, you'll have to believe in magic!

In fact, I suspect the only way we'll ever find out just how much the City has spent on the project, and how much we have lost, one will have to somehow get access to the statements for the Property Endowment Fund. That's because it has been the other funding source for all of the City's Olympic Village expenditures...sort of a project ATM, and only once we see how much has been spent might we know how much the City really lost.

I say might, because if the City puts the Social Housing in at a $110+ million value, then the Mayor will be able to stand up and say it too hasn't cost the taxpayers one cent!

As I reviewed my files, I came across 3 blog postings from three years ago on the projected losses. They make interesting reading.




I don't think this story is over, just yet.

Sunday, April 13, 2014

Strelka and IFC international competition

After 10 exhilarating days in Ukraine I returned to Moscow last Sunday to participate in the final jury session for the IFC Competition www.mfc-city.com.
The 8 shortlisted teams, which had been paid 200,000 euros each, had submitted their proposals and technical reviews had been completed by Strelka Institute staff and a panel of experts in transportation, urban design, etc.

http://www.strelka.com/?lang=en is a non-profit international educational project, founded in 2009. It offers an education program on urbanism and urban development, a public summer program, the Strelka Press publishing house, and KB Strelka, the consulting arm of the Institute.

Each year, Strelka welcomes young professionals from all over the world who work together in a nine-month post-graduate program that explores issues related to Russia's urban development in English. Students apply annually and those who are selected pay no tuition and are provided with housing. I would highly recommend that Canadian students interested in this field check it out.

KB Strelka provides strategic consulting services in the fields of architecture and urban planning, as well as cultural and spatial programming. In addition to the International Financial Centre competition, it organized a competition for Zaryadye Park, a major park in central Moscow for which Gaetan Royer and Heather Deal served as jurors.

Review by IFC Jury
The fourteen member jury spent two days reviewing the proposals and narrowed them down to three for further consideration by the client, Sberbank, Russia's largest bank, and its professional advisers. 
The jury included Russian architects, planners, bankers and political figures, as well as 5 international experts in architecture and planning. The international experts were well looked after and fed.
We were put up at the Kempinsky Baltschug Hotel, situated between the Kremlin and the Strelka Institute.
I particularly enjoyed meeting Alexander Voloshin, appointed by the Russian President in 2010 to head up this project. Described by the Daily Telegraph as one of the most powerful figures in Russian politics, http://tinyurl.com/pbrzksr he served as head of presidential administration under Yeltsin and Putin.

Following the jury session a press conference was held.

While my formal involvement with the jury has now finished, I hope there might be a further role to play on this most fascinating and challenging project at some time in the future.
The next day I toured Moscow including the emerging Moscow International Business Centre also known as New Moscow.
It includes a collection of about 12 towers, linked by the multi-level AFIMALL developed by AFI, one of Moscow's most impressive development corporations. http://www.afi-development.com/en/
Again, my guide was Timur Ryvkin of Colliers Moscow office. They had recently moved into the 55th floor of one of the new towers.
Other nearby buildings include Evolution Tower, the twisting building still under construction, and Mercury City Tower, the tallest tower in Europe. (It's taller than London's recently completed Shard)

After touring Moscow City and doing a bit of shopping at AFIMall I returned to my hotel via one of the new and old Moscow subway stations.
After three separate trips to Moscow I have developed a real appreciation and affection for this fascinating city. While it's expensive, and the language is challenging, it is a very exciting place to be. At the same time the traffic congestion is a serious problem, which is part of the justification for a new international financial centre outside of the city core.

I will be watching its development with great interest.

One benefit of Condominium Bylaws and Regulations!

Seven years ago on a trip to Albania I noticed something quite horrifying. Residents of condominium apartments not only enclosed their balconies however they wanted, they also painted the exterior portion of their apartment whatever colour they wanted. The results were to say the least, bizarre.
I thought of this during my recent visit to Ukraine. While apartment residents didn't paint the outside of their portion of their building as exuberantly as the Albanians, they gave little consideration to their neighbours or overall building design when it come to enclosing balconies. 

I could offer dozens of examples, this is typical example of what I saw in Kiev and elsewhere in the country.

Not a very pretty sight!

Saturday, April 12, 2014

Jewish Odessa

Until 1941, almost half of Odessa's population was Jewish. Today, only 3% of the estimated 1 million inhabitants are Jewish.
Odessa was built on the order of Catherine the Great, founded by a half Spanish/half Irishman, planned by a Dutch engineer, with an Englishman as its first architect. But in 1916, the famous writer Isaac Babel described Odessa as "the city made by Jews". That's because unlike in the rest of Russia, Jews had almost equal rights in the city. That was due in part to the fact that it was a port city and city fathers recognized that over the course of history Jews were good traders. They were therefore encouraged to help bring prosperity to the city. And they did.

In the wonderful book The Hare with the Amber Eyes we learn how the Ephrussi family, once the second wealthiest Jewish family in the world, got its start in Ukraine trading wheat. My forefathers were not wealthy Jews, but I was told as a child that at one time they lived in Odessa, or in one of the surrounding shtetls. http://en.wikipedia.org/wiki/Shtetl.

Whenever I met someone else named Geller, I was often told that their family also came from Odessa. As a result I grew up being fascinated by the city, and in 1994 my father and I set off on a Black Sea boat cruise since it included a stop in Odessa.
When then Mayor Philip Owen learned we were going, he kindly wrote to his counterpart Mayor Gurvits (yes he was Jewish) asking him to extend every courtesy to us.
Before leaving I mentioned to Herb Auerbach that I was off to Odessa with my father to see how many Gellers there were in the Odessa telephone directly. He responded that surely the purpose of the trip should be to see if there is an Odessa telephone directory!
Ironically, we had such a good day (unfortunately Gurvits was in Kiev at the time but his deputy Alexandr A Prokopenko did greet us at City Hall) I completely forgot to check! (As an aside, when we got home and my dad saw this photo, he pointed out what I faux pas I had made presenting the Deputy with this shirt that said Canada-Russia~celebrating 50 years of Vancouver/Odessa sister city relationship.)

On this trip to Moscow to finish the jury process for the IFC competition (www.mfc-city.com), I decided to return to Odessa, if only to check the telephone directory and look for Gellers!
I did so at the Jewish Museum, a hard-to-find space hidden at the back of a somewhat dilapidated courtyard. When I arrived I assumed it was closed since there were few lights on; however after paying the modest entry fee, the most delightful young lady in charge went through the exhibit area turning on lights for me.
I asked whether they had a telephone directory and she took me to small display where there were a few. She opened one up from many years ago. Sure enough the Gellers covered a portion of two columns. I also asked her to look up Wosk, since I knew that the late Morris Wosk had moved to Vancouver from Odessa, but she could not find anyone by that name...I guess it was changed! It was difficult for me to properly express my appreciation for her efforts.
(I knew how to spell my name in Russian from my name card at the IFC competition!)
One other matter is worth reporting. In the museum amongst the various displays, I came across a few items from Baltimore's Jewish Community. My guide explained that they were donated by city residents since Baltimore is one of Odessa's sister cities. I told her Vancouver was also one of Odessa's sister cities and offered to try and arrange a similar donation. I plan to discuss this with Vancouver's Jewish Museum (yes we have one) and the Jewish Community Centre to ascertain what might be the most appropriate items for us to send to be included in their display.
Leaving the Museum I walked back to my hotel. Sadly I passed this camera shop which had been defaced with a yellow star. It brought back many sad memories of how Jews had been singled out in Germany and other European countries. Unfortunately despite the contribution of Jews in Europe and Russia (it seems that Mayor Gurvits served until very recently), or because of them, antisemitism will probably always be with us.

Friday, April 11, 2014

More images from around Odessa

When was the last time a bank offered you 22.5% on your deposits?
one of the many attractive heritage buildings that has been renovated

While many sidewalks are being rebuilt, many others are in disrepair

A number of attractive new condominiums have been built in the downtown

Public transit is very affordable...about 15 cents

One of the many religious facilities around the city
Inside the philharmonic hall...it filled up (I was too early!)
La Traviata was a wonderful production at the Opera House...

As viewed from my $15 box at the Opera House