I have had some recent conversations with both NPA party members and members of Sam Sullivan’s previous administration, and without a doubt, the Olympic Village tends to be one of the preeminent sore points for those struggling with the current political landscape.
The reaction of most NPA/Sam Sullivan acolytes when discussing the Olympic Village.
This is for a number of reasons – the fact that revelations released by the leak of Peter Ladner’s in-camera document detailing a $100 million loan to Millennium sunk the NPA in the final weeks of the campaign, the fact that former City Manager Judy Rogers’ head rolled due in part to the way the project was managed, the fact that it is Vision Vancouver that has pulled things from the fire to launch what is sure to be a jewel for the city for decades to come – you take your pick.
I have seen the anger, the bitterness and the venom that emanates from these individuals when the Olympic Village is brought up – and I have now learned my lesson to avoid the topic altogether.
That being said, the inability to accept reality continues from some in that crew. Take for example lone NPA Councillor Suzanne Anton, who has penned an oped for the Vancouver Province today that unsurprisingly glosses over the key details that caused Mayor Gregor Robertson to refer to the Olympic Village as a “train wreck” when he inherited the project last December.
Let’s break down Anton’s piece and her version of events.
“By 2005, when I was first elected, council was faced with designing and building 1,000 units of housing, and doing it fast. Several key decisions were made. Council unanimously agreed that the city would retain ownership of the land to guarantee timely completion, that Millennium would be the developer and that Fortress would be the lender.”
Doing it fast apparently means picking the third placed bidder – Millennium – after the first evaluation matrix with 57 individual criteria was compiled. Expediency prompted a change in the evaluation after the first round of data was compiled so that the results could be changed. So was the vote unanimous? Absolutely. Was the criteria and subsequently the placement of the bidders completely overhauled behind closed doors before heading to Council for a vote? Without a doubt.
Please continue, Suzanne:
“Financing was challenging throughout. It reached a crisis at the end of 2008 with the global financial meltdown. Fortress had advanced $317 million but refused to advance any more under the existing terms. The city had to scramble and council (unanimous again) agreed to advance $100 million to keep the project moving forward. That decision became an election issue.”
Fair enough…Fortress was defaulting on its commitments. But what about what happened before that point?
The NPA dominated Council gave Fortress Investment Group a rigid completion guarantee in June, 2007 that disallowed the city to adjust the terms of completion due to the dramatic shfit in the global economy. Because it was an in-camera decision, the only reference to the completion guarantee came almost a year later in the fine print of auditors’ notes. It is also known that both Vision and COPE voted against this provision.
How much of a closed shop was the NPA running at the time? Well how about this question from the city’s former Chief Financial Officer Estelle Lo from last October:
“Do the contracts with Fortress/Millenium stipulate who would finance all the unplanned add’l costs or shortfalls and the City’s role re budget overruns?”
Because she was left in the dark on so many key decisions, Estelle Lo resigned from her post before the new administration took office.
I am also keenly aware of how badly behind schedule the project was as of last December/January. Mysteriously, Jody Andrews, Vancouver’s Deputy City Manager & Project Manager for the Southeast False Creek, stepped down from his position and left the City on January 15, 2009.
Please carry on, Ms. Anton:
“In November 2008, the newly elected mayor renegotiated the financing and returned the $317-million external funding to Fortress. The new money was cheaper but 100 per cent of the risk was transferred to taxpayers. The $100-million loan has become a $650-million loan and the city has paid much more to build the social housing and public amenities, for a total of over $1 billion.”
But listen to former Councillor Peter Ladner, who contradicts his former colleague and admits that risk was taken on by the City long before becoming the prime lender on the project
“In retrospect, the key decision that exposed us financially was the internal Southeast False Creek Steering Committee’s agreement to heed our legal staff’s advice to give Millennium a ground lease instead of taking its $193 million and giving it title to the property. This was felt to be the only way we could guarantee delivery of the project on time.” – Business in Vancouver January 20-26, 2009; issue 1004
Requiring an emergency sitting of the provincial legislature to change the Vancouver Charter, the City of Vancouver was able to borrow the necessary money to refinance the loan to Millennium, step in as financier, and assume the risk in a transparent manner, which resulted in savings of $90 million in borrowing costs.
How about you encapsulate what you are trying to say, Suzanne:
“Unfortunately the mayor, until recently, continued to refer to all the hard work and heavy lifting done by the previous councils and staff as a “train wreck.” There are several problems with this characterization: The unseemly spectacle of his council colleagues disavowing their own previous decisions; the deplorable criticism of staff who worked on the file at the time; and the fact that the characterization was just plain wrong.”
Sorry, but for all the reasons stated above, staff, secret decisions by the the City Manager and the Mayor’s office of the day, and the management of timelines were all aspects of the project worthy of scrutiny and indeed criticism.
I want to end off with the following quote from the KPMG report – a quote that perfectly details the lackadaisical attitude taken towards the Olympic Village by the previous administration:
“No points were allocated to the offer price in the Matrix. However, the scores developed using the Matrix were then re-evaluated by undertaking a sensitivity analysis and allocating between 0% and 90% to the purchase price. This indicated that once the price was allocated at least 14.5% . . . Millennium Development Corp., which had the lowest score in the Matrix, would be the winning bidder.
“Detailed financial information was not included in the submissions from the three developers and, accordingly, there was a limited basis to assess financial ability.”
Anyone responsible for choosing a developer in this fashion needs to wake up and understand that a tone was set from that day forward. In other words, the well was poisoned long before Gregor Robertson properly characterized the project as a previous “train wreck.”
And what about Anton’s claims that the comment hurt interest with potential buyers? I say hogwash. This neighbourhood is going to launch a feeding frenzy, and I firmly believe that all market housing put up for sale (that mix is not yet finalized as I detailed last week) will be sold extremely quickly.
Calling a spade a spade about poor management, oversight and vision before completion is unlikely to dampen enthusiasm for what has now turned into one of Vancouver’s most desirable neighbourhoods.
