Finally spoke to Housing Minister Rich Coleman about where that $205 million is coming from to pay for eight new social housing buildings in the city.

As faithful readers will recall, I wrote a piece a couple weeks back about the provincial government announcing $205 million to construct the buildings.

Funding for the eight buildings is in addition to the six the government announced in March 2009. Total cost to construct the 14 buildings, which includes $20 million from the Streetohome Foundation, is $333 million.

On the day of the announcement, Coleman said "a major source" of the funding to construct the 14 buildings will come from the "sale and redevelopment" of the Little Mountain public housing project.

But, I asked him, how can you use money from the "sale and redevelopment" of the project when the sale has yet to be finalized or the redevelopment started?

"We have a deal on [the land] but it has to go through zoning processes and development permits and all that stuff to final completion," said Coleman, referring to the deal with developer Holborn Properties.

Some of those 14 sites are already under construction, with the first one on Station Street expected to be open no later than February 2011. So where's that money coming from?

"[The government's treasury board] advanced us the money to move forward more rapidly. That was my presentation to government. So even though we haven't closed the final price, we've been given the dollars in light of the fact we know Little Mountain will some day get developed and those dollars will be able to come back and pay this down."

Are you confident the return on the sale and redevelopment of Little Mountain will be enough to cover the government's $313 million investment?

"We're comfortable with the numbers. But if we didn't get it back, we're also comfortable we can handle the financing. We've already done our business plan on it, with or without the money. So we base it on the worst case scenario and what we get out of Little Mountain will just augment what we're doing."

In June 2007, the city signed a memorandum of understanding with the government regarding the redevelopment of Little Mountain.

The memorandum says the government will invest all of the net proceeds from the sale of the site into the development of social housing throughout B.C.

Half the proceeds are to be invested in the city, according to the memorandum, which doesn't provide dollar values for the land or estimates on returns from the sale of Little Mountain.

Before most of it was demolished last fall, the 224-unit housing project was the oldest complex of its kind in Vancouver. The 15-acre site is next to Queen Elizabeth Park and south of Nat Bailey Stadium.

The scale of the mixed-use project has not been finalized but previous city staff reports have considered taller buildings. The redevelopment could take a couple of years to complete. The government said the site is being redeveloped because the buildings were in disrepair and required costly repairs and extensive maintenance.

mhowell@vancourier.com