EDITORIAL | Journalists Continue to Spin Olympic Village

The Olympic Village represents a “fiasco,” but more and more it’s turning into a fiasco of journalism. Prominent columnists have spent the last week trying to convince readers of a financial disaster at the Olympic Village, but the real disaster is that they’re not telling it like it is. Due to the removal of hundreds of units of social housing, the city stands to break even on the project, and perhaps even gain money.

The discussion revolves around the cost of the land on which the Olympic Village sits, bought by the city for $30m. That $30m was paid in full by the developer in 2006. By all standards the city has no liability on the land. There is no loss and no profit because costs have been recovered, net zero. End of the story one might think.

But today in the Globe and Mail, Gary Mason argues that while there is no actual loss, the loss nontheless is “actual” because it “feels like a loss.” According to Frances Bula, also with the Globe, there is therefore “$180-million unpaid amount owing on the land.” But did nobody tell Gary Mason and Frances Bula that the land was given back to the city months ago? How can money be owed on something if that something was returned? – and returned with a $30m fee paid by the borrower.

City seizes Millennium assets, anticipates over $100M in profits from social housing sell-out

The City of Vancouver announced Friday that it has seized numerous assets owned by the Olympic Village developer, Millennium Development, including 32 properties worth $50M and other assets valued at around $10M.

The City is owed $575M by Millennium for the Olympic Village construction loan. But City staff said Friday that after seizing Millennium assets, they now anticipate recouping a total of $725M. This means that the City plans to make $150M profit even after the construction loan is paid off.

The original 2005 Official Development Plan for the Olympic Village called for 2/3rds of the housing to be “affordable” (over 733 units out of 1100), half of which would be social housing (366 units). To that end, the City negotiated that Millennium would pay the City another $200M for using the City-owned land on Southeast False Creek. About $30M of those land-profits were already paid to the City, and in April 2010 the City invested approximately that amount ($32M) into the remaining non-market housing, although the number of these had been drastically reduced. But now that the City anticipates accumulating another $100M – $150M profits, there are no plans to invest them into meeting housing promises at the Olympic Village, or anywhere else in the City.

For now, the corporate media is parroting the nonsensical line that the City will “lose” $40M – $50M on the project (see CBC and TheSun), but it would be much more accurate to say this: whereas the City originally hoped for $200M in profits from the land lease, to be used for meeting Olympic Housing Legacy, now Gregor Robertson plans to make around $150M profit, but not re-invest it.

‘Broken promises picket line’ at Olympic Village

This past Saturday, Housing activists established a picket line in front of the Olympic Village condo sales centre, where the City is trying to sell off the housing units promised as social and affordable housing. Picketers engaged with prospective buyers and asked them to “respect the housing legacy picket line” and refrain from purchasing broken-promise housing units until Olympic housing promises are secured and until questions are answered about the Millennium bail-out.

Picketers attempted to enter the sales centre to purchase the remaining units with a larger-than-life $400M cheque from the Property Endowment Fund. The City responded by restricting access to the sales centre. Only those with pre-arranged meetings with realtors were allowed in.

Here are three interactions that stand out:

1 | One woman, who came to the centre to get out of a contract she had signed 7-days previous (it was therefore her last day to do so), was at first barred from entry. Only after 30 minutes of protest did security allow her inside to get out of the condo contract.

2 | A prospective buyer was barred entry because of the clothes that he was wearing (on cell phone pictured above left). Security was given discretion to allow entry based on apparent class.

3 | A family that had planned on buying a broken-promise unit changed their mind after hearing from the picketers. The family emerged from the sales centre and declared that it was immoral for them or anyone else to buy housing that had been promised to those who need it most (video below).

City selling-off Olympic Village social housing to bail-out Millennium

The City of Vancouver stands to profit from selling-off housing units at the Olympic Village that were promised for affordable and social housing. The original Official Development plan for the Olympic Village committed that 2/3rds of the 1100 units would be affordable, half of which would be social housing.

But the City has invested almost no funds toward meeting these promises. Millennium development corporation, which built the Olympic Village, has already paid $29M to the City for the land lease. The City then put forward a similar amount ($32M) toward the few remaining “affordable” units. In short, the City spent almost no new funds on affordable housing. Even worse, these “affordable” units were then transferred to a co-op to be marketed at unaffordable levels.

The City stands to collect another $170M from Millennium for the land lease, but the City has no plans to reinvest any of this profit to meet housing promises. There is ample precedent to do so: the fourteen sites of supportive housing were built by the City putting forward the land without expectation of profit.

Millennium on the hook, not the City
The Millennium development corporation is not bankrupt or insolvent, as many suppose. On the contrary, they remain legally on hook for the construction loan. For now the City has taken control of marketing the Olympic Village properties, but Millennium has many other properties and assets. Instead of going after Millennium’s assets, the City has bailed-out Millennium. Millennium had been paying high interests rates, but the City has waived that requirement. The City is selling off social housing to keep Millennium afloat.

The City has hired condo marketer Bob Rennie to sell-off the ‘broken promise’ units. Bob Rennie claims that he is trying to “protect the taxpayer,” but in fact by liquidating the broken promise units, he is protecting Millennium by ensuring that the City does not go after their assets. [To be continued in Part 2, “Poverty Runs Over-budget at False Creek”]