The Olympic Village development is Vancouver's newest mixed-use community, and will see thousands of people moving in over the next few years. We've worked hard at city hall to bring stability and fiscal discipline to the project, but there are challenges ahead.
The past few months have been very difficult. A soft housing market and the uncertainty of the HST meant sluggish sales at the village.
We also inherited a number of problems from the previous NPA council. Cost overruns and a lack of oversight nearly derailed the project in 2008. The decision to gamble on the housing market and make the village 80 per cent high-end condos has left us with hundreds of units that aren't selling.
To top it off, the secret vote to have the city shoulder the entire financial risk of the project put us in a precarious position leading up to the Olympics.
Despite those challenges, we made sure the village was built on time for the Games. Athletes from around the world loved it. For 17 days, billions of people saw a spectacular community on the shores of False Creek. It was the kind of marketing other projects could only dream of.
Now, we need the units to sell so Millenium can pay back the hundreds of millions of dollars owed to the city.
Our focus at city hall is protecting the taxpayer and ensuring we do everything we can to get the best financial return possible.
Since being elected, we have taken a methodical, business-like approach to every aspect of this project.
We made public all of the previous council's Olympic Village decisions, from secret financing votes to cost overruns in the tens of millions of dollars.
We put a new oversight team in place. We brought in some of the best financial and legal advisers in the country to help us work through this project.
It is crucial for everyone to understand our role.
The city is the lender. Millenium is the developer. It is up to them to sell the remaining 454 units.
In the meantime, we took steps to protect the taxpayer by registering on Millenium's assets. We still expect them to make their next payment in January, but we have a responsibility to protect the city's financial position.
As for the affordable housing at the village, there have been repeated calls to sell the units, including from The Province. Selling the units might sound like a good idea, but it doesn't make financial sense.
Think about it. Millenium needs to sell 454 condos in a soft market to pay the city back.
Hundreds of new, mid-range condos are going on sale across the street. If we were to sell the 252 affordable housing units, we would be flooding a difficult market and eating into potential profits.
The decision to keep the affordable housing is financial, not political.
We've received advice from some of the top real-estate and financial experts in the country who all say the same thing: don't sell off the affordable housing, it will hurt the city's financial position.
The city has the ability to move people directly into the affordable housing. The units are built and ready to be occupied. We have hundreds of people waiting to get in. And since we own them, they don't need to be subsidized.
Contrary to The Province's editorial last Friday, we're not playing monopoly.
The city already directly contracts with housing operators, with more than 800 units across the city and has been doing so for the past 30 years.
That's why we're committed to moving people in this winter, and getting rent revenues coming in.
I said it in 2009 and I'll repeat it again here: there is nothing simple or straightforward about the Olympic Village project.
It is going to take time to sell the units, recover costs, and we will not be rushed into any decision that could jeopardize the taxpayer.
The Olympic Village has many, many unique attributes.
It is on one of the most beautiful pieces of property in the world, it won a LEED platinum award for its sustainability features and it was celebrated by the international community when they saw it during the Olympics.
Ensuring that the village achieves its potential in the long run will require an enormous amount of due diligence, hard work and strategic action. We've got a lot of work ahead, but we're committed to getting the best deal for Vancouver taxpayers.
Gregor Robertson is the mayor of Vancouver.
Read more: http://www.theprovince.com/business/Selling+social+housing+village+answer/3635877/story.html#ixzz11g2tO9CV
This entry was posted on October 7th, 2010 | Posted in General