Vancouver taxpayers are on the hook for the $1-billion Olympic athletes village project, says Mayor Gregor Robertson.
The project could come to a halt in February, unless the city doesn't continue paying construction bills and negotiations with Fortress Investment Group, a Wall Street lender, fall apart.
"The Olympic Village is a billion-dollar project and the city's on the hook for all of it," a sombre Roberston told reporters. "To my great frustration, we can't turn back the clock on the actions of the last mayor and council. We are financially and legally committed to complete this project."
Robertson said there could be a "significant loss" to the people of Vancouver.
City officials held an off-the-record, "technical briefing" for reporters in the basement of city hall Friday afternoon.
In it, they outlined how the city had got itself into a deal that left taxpayers liable for the total $1.075-billion tab.
Construction costs spiralled by $125 million from $750 million to $875 million.
According to documents:
• In 2002 the city signed a multi-party agreement committing to build the village in return for $30 million from Vancouver 2010 organizers.
• In 2006 developer Millennium Properties Ltd., agreed to buy and develop the southeast False Creek land for $200 million and paid a $29-million deposit.
• In 2007 Millennium arranged financing of $750 million with Fortress. In return, the city gave Fortress a $190-million financial guaratee and a completion guarantee.
• Between May and August 2008, Fortress decided the loan was "out of balance" due to cost overruns.
• On Sept. 15, Fortress said it was paying its last construction bill and would advance no further funding under the current deal.
• On. Oct. 14 city council authorized up to $100 million to pay three construction bills, on Oct. 15, Nov. 15 and Dec. 15, which totalled $79 million.
• On Jan. 15, the remaining $21 million will be paid for construction.
They said the deal with Millennium was an "unusual arrangement," as the city retains title to the land until the developer clears it's financial commitments.
The city is legally bound to complete the village
According to officials, Fortress has paid $317 million towards construction so far and a further $458 million is needed to complete the project.
If talks break down and Millennium pulls out, the city would be responsible for the total in order to meet its commitment to build athlete housing for the 2010 Olympics.
Robertson said that Vancouver is determined to finish the 1,100-unit waterfront project, which will house 2,800 athletes and officials.
"We know we've been dealt a very tough hand but I believe we can meet our obligations," he said. "The decisions taken by the previous city government have put the city at enormous financial risk. We will meet this challenge and we will excel as proud hosts to the world's greatest athletes."
He said that signing a completion agreement to Fortress, effectively made the city the project developer.
Robertson said "urgent and delicate" negotiations are ongoing
In the mean time, about one third of the units have been sold and the money is being held in trust.
"We should see great returns," he added. "It's a beautiful piece of land in a great city."
Vancouver 2010 construction boss Dan Doyle said Olympic organizers have "full confidence" the city will fulfill its commitment to deliver the village on schedule.
"We fully support Mayor Robertson, city council and the city administration in their efforts to responsibly manage the construction and long term legacy and viability of this key venue in an extremely challenging economic environment," added Doyle. "The City of Vancouver has been in constant contact with us on this venue and the current situation in particular and we have offered our assistance should it be helpful in their deliberations and decisions going forward."
http://www.theprovince.com/Sports/At...142/story.html 
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