VANCOUVER, British Columbia (Reuters) - The need to refinance construction of the athletes village for the 2010 Winter Olympics in Vancouver is urgent enough for a special session of the British Columbia Legislature to be held, Premier Gordon Campbell said on Wednesday.
Lawmakers will be called back to work once legislation has been drafted that will give Vancouver the power to quickly borrow the more than C$450 million needed to complete the facility in time for the Games, Campbell said.
The Canadian city has found itself on the financial hook for the C$1 billion project, which was supposed to be privately funded. But funding evaporated as construction costs rose and the real estate market soured.
A loan to the villages developer to allow it to build the facility and purchase land from the city was to have been paid off by selling the housing after the Olympics as high-end condominiums.
“This is very urgent... there are significant downsides to dithering on it,” Campbell said.
The Legislature’s regular session is not scheduled to start until February.
Vancouver needs the provincial government to modify the city’s charter to allow it to borrow the large amount of money without putting to the question to a public vote in a city referendum, which could be a lengthy process.
The city has been negotiating with the project’s lenders, led by Fortress Investment Group, in a so far unsuccessful bid to get them to resume funding to developer Millennium Development that was frozen in September.
A direct loan to Millennium from the city could replace the private loan negotiated in 2007, which local media have reported charges an 11 percent interest rate.
Campbell said he remains confident the project, which will house some 2,800 athletes and officials, will be ready in time for the Games in February 2010.
Both Standard & Poor’s and DBRS have warned the financing problems could hurt the city’s credit rating if the city is forced to borrow extensively to ensure the village is ready when the Games begin in February 2010.
The Winter Olympics will also have an athletes village in the ski resort of Whistler, British Columbia. That project does not need to be refinanced.
Reporting Allan Dowd, Editing by Peter Galloway