City stands firm on Olympic Village loss

Millennium didn't pay $170 million land fee

Vancouvers city manager continues to insist the Olympic Village loss is under $50 million, but Vision Vancouver Coun. Geoff Meggs concedes that it looks much bigger.

Last April, the city disclosed a $48 million write down on the $1.1 billion project originally developed by Millennium, whose Southeast False Creek division went into receivership last November over $740 million owing to the city. Millennium paid a $29 million deposit, but not the remaining $170 million for the land.

article continues below

We can debate that whether its a loss or not, but our accountants tell us no, and the common sense view is that it is, Meggs said Tuesday. That was money that we didnt know if we would get.

City manager Penny Ballem told council that the debt has been reduced to $446 million, in part from the sale of 170 condominiums for $122.5 million since Februarys rebranding as the Village on False Creek under receiver Ernst and Young.

The sales are ticking along, they are steady, Ballem told council. They happened in all price ranges and every day theres a change.

Marketer Bob Rennie told the Courier that three more deals worth $6.82 million were completed Monday, meaning 436 of the 737 condominiums are sold. Another seven deals are pending for $6.78 million. Were dealing with homeowners, were getting the target audience out there, were getting the West Side buyers, were getting the golf course membership buyers that are selling their West Side homes and buying in, Rennie said. Its phenomenal, I am ecstatic.

Pent-up demand resulted in 118 sales within the first 45 days of the relaunch, but the pace has slowed and 55 have sold in the last six months. Rennie said he expects to sell out in 2013, a year longer than what he told the Urban Development Institute in a May 2010 speech.

Ballem refused to disclose monthly sales figures. Rennie said to do so would disturb the asset.

Ballem said the city still expects to net $45.3 million from the sale of 32 properties transferred by Millennium to help pay its debt. The city sold four Burnaby condominiums and one in Toronto worth a combined net $1.1 million since April. A dozen retail strata units are on the block and the old Province building at 198 West Hastings, appraised at $10 million, will soon be offered by tender.

HSBC now holds a $49.55 million mortgage on the Millennium and Concord Pacific joint development of the 21-storey Alexandra English Bay tower at Davie and Bidwell streets. Concord has an option to buy the citys $5 million fourth mortgage. Concord, coincidentally, was one of the two losing bidders in April 2006 to develop the Olympic Village.

Last February, Ballem signed a Land Title Office form that discharged Millennium from a mortgage originally worth $1 billion. The mortgage stemmed from a September 2008 floating debenture granted by Millennium to the city in exchange for a $100 million bailout when Olympic Village lender Fortress Credit Corporation stopped paying amid the global credit crunch. Ballem denied the city went soft on Millennium because Alexandra is to contain 49 rental apartments under the citys Short Term Incentives for Rental program.

The difference between a billion and what we got? Thats a question that I can understand why people would ask that, but we got our hands on anything and everything, Ballem said. There were some properties where the mortgaging was bigger than the equity and value in them, so we let them go.

Read Related Topics

Popular Vancouver Courier

Sign Up For Our e-Newsletter!
Find the Vancouver Courier Newspaper