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Vancouver 2010 Olympic Village loan scandal deepens

Olympic loan scandal deepens
Vancouver mayoral candidate Peter Ladner prepared to lose election over secret $100M loan

By Christina Montgomery, The Province
Published: Saturday, November 08, 2008 (www.theprovince.com)

NPA* mayoral candidate Peter Ladner said Friday he was prepared to lose the election rather than go public with -- and risk -- negotiations on a $100-million city loan to developers of the financially troubled False Creek Olympic village.

"I am willing to lose the election to protect taxpayers' interests in the Olympic Village," Ladner said.

And he accused his opponent, Vision Vancouver's Gregor Robertson, of "spreading misinformation" about the city's involvement in the project and of costing the city millions of dollars by harming the city's negotiating position.

The comments came just minutes before sitting Vision Vancouver councillors attempted to table an emergency motion asking for a public council debate Nov. 15 -- one day before the civic election -- on the matter.

The effort failed when the motion to reconsider the loan was ruled out of order.

Known as the Olympic athletes' village, the project is a seven-block area on the southeast shore of False Creek. It will feature 1,100 housing units in 14 residential buildings, along with retail space and a community centre. After the Games, it will be converted to 850 market-value homes and 250 units of social housing. About 60 per cent of the residential units have been sold.

On Oct. 14, councillors voted unanimously at a confidential session to approve up to $100 million in loans to Millennium Development, the development wing of Aremco, which is building the village. All councillors present at the in-camera session are legally sworn to keep proceedings confidential. An open council forum would allow them to ask questions about the city's level of risk as the village is completed -- and after the Games, when units will be sold and monies recovered.

It also reportedly voted to approve up to $450,000 to hire a third party to oversee construction of the rest of the project.

The city has already signed a $193-million guarantee to satisfy the lender, U.S.-based Fortress, and has already advanced nearly $30 million to Fortress on behalf of the developer.

Millennium was facing about $60 million in cost overruns on the construction of the village for the 2010 Winter Games. As host city, Vancouver is bound to deliver completed housing to Games officials next year -- hence its attempt to move the project along.

The company is facing troubles elsewhere in B.C. Nanaimo city manager Jerry Berry said Friday that the company has missed "a variety" of starting deadlines for a 170-room hotel it is to build there as part of a complex public-private partnership that includes a conference centre, two arenas and a museum.

Money for the City of Vancouver's village loan is to come from the city's property endowment fund, a bank of land and cash built up over the years to do things like purchase land for civic theatres or social housing. Its cash reserves fluctuate and can be as little as $30 million or as high as $200 million.

The failure of Friday night's motion to council didn't stop the accusations -- or the flood of press releases and press conferences that had marked the day.

Ladner accused Robertson of turning critical negotiations into a "political football."

He said that a world economic downturn meant the city was in "ongoing" negotiations with the developers and noted that the talks being held by city staff were authorized by a unanimous, in-camera council vote.

"I appreciate that citizens are concerned about this, given all the media attention resulting from leaked information on the financing of the project," he said.

"People need to know the Olympic Village will be completed on time and that the financial obligation of the city hasn't changed.

"Gregor's call for a public council meeting to discuss this situation shows a lack of understanding of how city government works. He either does not understand or does not care that city negotiations could be undermined by public disclosure."

The argument didn't stop Robertson, who continued to insist that "the citizens of Vancouver should expect no less than full and open disclosure of how every one of their tax dollars are spent -- let alone $100 million of them."




Robertson said that a number of issues not directly related to financial details of the deal should be moved into open debate -- including clarification of the status of the city's financial director, Estelle Lo, who is reported to have tendered her resignation after repeatedly voicing concerns about the city's financial involvement in the project.

Robertson also continues to demand clarification on the city's credit rating, in light of loan information being made public.

Several former city politicians leapt into the debate Friday.

Former city councillor Jim Green said he was surprised the fund was being considered as a source of loan money.

Jonathan Baker, a lawyer, expert in municipal law and former city councillor, told reporters that while in-camera restrictions did apply to many issues, they were not meant to be applied to "prevent political embarrassment."

-- with a file from John Colebourn
cmontgomery@theprovince.com
* NPA: the Non-Partisan Association, a right-wing political party that has controlled Vancouver City Council for several years.

Original story broken by 'The Globe and Mail' includes details of the departure of the city's chief financial officer.


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