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.