Slow sales for Olympic Village apartments in Vancouver drive the developer into receivership. (Getty Images)
Olympic Village Project Enters Bankruptcy
The Vancouver Olympic Village was pushed into receivership Nov. 17 when Millennium Development ceded control to Ernst and Young.
"This is going to take years to work through," Mayor Gregor Robertson admitted in a hastily called city hall news conference, adding that the impact on taxpayers is unknown.
Earlier in the day, city hall lawyers petitioned a British Columbia Supreme Court judge to appoint Ernst and Young after Millennium consented to the arrangement.
Millennium owed $740 million and failed to satisfy city hall with a new loan payment schedule or marketing plan during Oct. 18 to Nov. 5 negotiations disclosed in court documents.
“The city then worked very, very hard on two tracks, one is are we going to go to court or are we going to negotiate a settlement,” said city lawyer Mitchell Gropper.
“Fortunately we were able to arrive at a settlement.”
The $1.1 billion site opened to the public in May but 474 unsold luxury condominiums remain.
The latest trouble began brewing in August when Millennium notified the city it couldn’t afford to pay $200 million by Aug. 31. The company put together $192 million by deadline, but the city declared Millennium in default and declared it was owed the full $560,839,389.04 loan plus $107,080.69 daily interest.
Millennium partners Shahram Malekyazdi and Peter Malek have signed an agreement prohibiting them from commenting on the settlement.
“Millennium delivered probably the world’s greatest Olympic Village but it got caught in the world economy,” said the project’s marketer Bob Rennie. “Now we can pay attention to maximizing revenue and stabilizing this asset.”
In Whistler, the former Olympic Village at Cheakamus Crossing is also a sales flop. Only one of the 20 market-rate homes offered in the River Bend subdivision has sold since May.
The Resort Municipality of Whistler took a $100 million loan to pay for the development. It has until November 2011 to pay the debt.
Cheakamus Crossing is south of Whistler Village and is adjacent to a controversial asphalt plant that RMOW council refused to shut down.
Balanced Budget With Help from IOC
VANOC CEO John Furlong sticks to his story that the Vancouver 2010 budget will balance.
But there will be no surplus.
“The bleachers are empty, and people have gone home and no one is cheering,” Furlong said after a Nov. 17 board meeting held in the headquarters of BC Hydro.
Furlong said the $22 million IOC bailout fund
would be relied upon but said there would be no more sought from taxpayers.
Olympics critic Kathy Corrigan said if VANOC balances, it will be “on the backs of” B.C. taxpayers. The provincial government revealed in July that it gave VANOC an extra $50 million.
In early 2009, VANOC forecast spending $1.76 billion on operations.
VANOC chairman Rusty Goepel and the rest of the board were reappointed at the meeting. Goepel said more time was needed for auditors to work on the post-Games financial report. It is now scheduled for Dec. 17 publication.
Salt Lake 2002, by comparison, published post-Games financials in June 2002. VANOC’s last report was issued Dec. 21, 2009 for the quarter ended Oct. 31, 2009.
During the bid phase, a 2002 government agreement required quarterly disclosures. In 2007, VANOC promised taxpayers more transparency.
No Comment on Gameday Settlement
An FIBT World Cup event is set for Nov. 25-27 in Whistler. (Getty Images)
VANOC chief financial officer John McLaughlin refused to comment on finances during a Nov. 17 teleconference, including the settlement reached via mediation a week earlier with bus contractor Gameday Management Group. Gameday CEO Tony Vitrano -- who is now London 2012’s transportation operations lead -- claimed his company was owed $10 million.
In October, Whistler Blackcomb disclosed that it was paid $32.1 million under a make-whole agreement with VANOC.
In July, the IOC reported that 1.49 million tickets were sold for $257 million, falling more than 500,000 tickets and $3 million short of VANOC’s budget.
FIBT Returns to Whistler
FIBT starts its world cup tour Nov. 25-27 at the Whistler Sliding Centre. The bobsleigh federation is the only Olympic sport with events in Vancouver, Richmond or Whistler in the first season after the Games.
Jon Montgomery, the Canadian who won skeleton gold Feb. 20, said he will not reprise his famous victory stroll through Whistler Village should he win world cup gold.
“That was a once-in-a-lifetime opportunity and folks were happy to receive us,” said the 31-year-old from Russell, Manitoba.
Montgomery said the track appears slower, but no track is the same year after year because of weather conditions and resources.
“The amount of personnel who are dedicated to preparing the track isn't as plentiful,” he said. “It's a bit slower for sure. I suspect we won't be breaking track records at this world cup. It's going to be awesome, smooth and safe for everybody.”
With reporting from Bob Mackin
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