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.

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