City Inks Olympic Village Deal with Aquilini Group

Mayor claims “a gold medal finish” as the city’s involvement in the Olympic Village saga comes to a close

With more than a hint of pre-election swagger, Mayor Gregor Robertson announced Monday that the city of Vancouver had paid back its debts in full for the Olympic Village condo project. While Robertson left the details of the $630-million loan repayment to city manager Penny Ballem to explain, his message was clear: the city paid its debts, fulfilling an election promise more than five years in the making.

“This is a project many said would never make it into the black,” said Robertson, offering the advice: “be patient with a valuable asset despite tough market conditions.”

The mayor’s comments followed an announcement earlier Monday that the Aquilini Group had purchased the remaining 67 condo units for sale at the Olympic Village for $91 million, which will give the city an additional $70 million, “to go towards community amenities and public infrastructure.”

For the city, the sale of the remaining luxury condos brings a close to a project that bogged Robertson and Vision Vancouver, since assuming office in 2008.

The city took over the Olympic Village project’s $750-million construction loan in February 2009, after its developer Millennium Developments ran into financing trouble. The developer then allowed the property to go into receivership, and handed over to the city 32 buildings that it had guaranteed against its loans. The city took on $630 million in debt in order to complete the project in time for the 2010 Winter Olympics before tasking receiver Ernst & Young with selling the 750 remaining units.

Over the last three years, the isolated and largely vacant project gradually filled out as the city tasked Rennie Marketing Systems with selling the remaining units.

According to the city, 100 per cent of the commercial space in the Village and 94 per cent of the residential condo units, are occupied. Furthermore, properties around the Village’s main plaza were sold for $45 million in December.

Critics still have questions about the accounting, which is at best, complicated. When pressed, Robertson admitted that the additional $170 million debt owed to the city by its former developer is not included in his “break even figure.”

“We don’t have a full picture at this point,” said Burnaby property developer Bill McCarthy prior to Mayor Robertson’s news conference. McCarthy’s research paper, “The Failed Experiment of Vancouver’s 2010 Olympics Village” criticized the city’s handling of the project.

“There’s a whole pro forma of lists that in the free market, the developer, which became the city, would have to account for before they can determine whether or not the project was successful or not,” says McCarthy. The agreement does not account for $170 million off of the $200 million the developer Millennium agreed to pay for the property. Millennium only ever paid the $30 million down payment.

Robertson also maintained that the Aquilini’s acquisition was a fair deal, and that it bears no connection to land development elsewhere in the city, including the empty lands adjacent to the Olympic Village.