Vancouver seeks charter change to borrow $458M for Olympic Village

Vancouver city council unanimously passed a motion Monday to ask the province for permission to borrow $458 million to fund the completion of the 2010 Winter Olympics Athletes Village in False Creek.

Mayor Gregor Robertson said Monday council will ask the premier to convene an emergency sitting of the B.C. legislature to amend the Vancouver Charter, giving the city the borrowing authority it requires.

Under most circumstances, the city borrows large sums of money only after seeking approval from taxpayers in an election-day plebiscite, but the current circumstances are extraordinary, Robertson said. The charter is a provincially enacted piece of legislation that outlines how the city governs itself.

"In this case, due to the emergency and the financing that is required to complete this project, we are going to be asking for authority to borrow in order to complete this project," he said.

Premier Gordon Campbell said the provincial government is open to discussions about the help it can offer although Robertson had told him the city was able to deal with the huge project.

"I can't make judgments on that until I see what they've got from the council and what they are asking for," said Campbell when asked about the city's intention Monday.

"It's fair to say that we want to be part of the solution. We're not trying to get in the way. We want to work with them and we have been working with them," said Campbell, who was at an event in the Vancouver suburb of Surrey.

Finance Minister Colin Hansen said the province recognizes that the city is in a "difficult situation."

"We have to wait and see what requests come from the city. We will obviously look at the implications of that and come to a conclusion.

"The bottom line … as a provincial government and as an Olympic partner, we want to see what we can do to be at least helpful."

Prime Minister Stephen Harper has ruled out any bailout from Ottawa to help fund the cost overruns of the Olympic Athletes Village. The federal government contributed money to the 2010 Games some time ago, and that was its final contribution, Harper said Monday after attending the event in Surrey with Campbell.

"We will not be funding cost overruns of the Olympic Village," he said.

Fortress pulls financing

In a special briefing last Friday, Robertson revealed the New York-based hedge fund Fortress Investment Group, the funders of the Olympic Village development, had stopped lending money to Millennium Development Corporation, the builders, after it ran into its own financial problems in September as a result of the global financial crisis.

The city is on the hook for $875 million in development costs if on-going negotiations with Fortress to reopen the loan fall through.

The previous city council, Fortress and Millennium signed a $195-million "completion guarantee" in the spring of 2007, committing Vancouver to finish the project.

Fortress had lent $317 million to Millennium before it stopped advancing any more cash and the city's $100 million bailout, approved last October during an in-camera meeting, will be used up later this month.

That means the city has to come up with $458 million soon in order for construction of the Olympic Village to be completed.

Bailout leads to blame

Robertson, a member of the Vision Vancouver party, has blamed the financial mess on the previous council, dominated by the Non-Partisan Association, most of whom were defeated in the last election.

The former NDP MLA won the mayoral seat during the recent civic election after it was revealed that all the members of previous city council voted unanimously in September to immediately lend Millennium $100 million to continue construction after Fortress pulled its funding.

But the only NPA councillor to be re-elected in the recent election, Suzanne Anton, told CBC Radio that the last council was hamstrung by a deal that included a large amount of costly social housing that was passed by the preceding council.

That council was dominated by the Coalition of Progressive Electors, a party closely allied with Robertson's Vision Vancouver. 

After the Games, the units in the billion-dollar project will be sold as condominium housing while the city will retain control of the land and the commercial properties on the site.

The city has scheduled a meeting for Monday afternoon to provide the public with more details on the deal.