VANCOUVER, British Columbia (Reuters) - The city of Vancouver moved on Thursday to take over financing of the athletes village for the 2010 Winter Olympics, a project whose private funding dried up as the economy withered.
City officials said Vancouver had no choice but to help the developer complete the C$1 billion ($800 million) project because the city has promised Olympic organizers the facility to house 2,800 athletes and officials will be ready for the 2010 Games.
The Canadian city has estimated it will have to borrow more than C$450 million to complete the project, having already put up C$100 million to keep work going as it negotiated with the original private lender, Fortress Investment Group.
City council on Thursday gave officials the authority to replace the Fortress funding by either borrowing money from banks or by issuing debt that would be paid back as the facility’s units are sold as private housing after the Games.
“The intention here throughout is for the city to come out whole. Maybe it will or maybe it won‘t. That’s a determination we will make down the road. In the meantime we’ve got commitments to finish the village,” finance director Kenneth Bayne told city councilors.
The collapse of Vancouver’s real estate market last year was among the reasons Fortress stopped funding the project’s private developer. Most of the units are to be sold as expensive condominiums.
Vancouver’s move came a day after the British government agreed to bail out the athletes village for the 2012 Summer Olympics in London, which has also seen its private funding run into trouble.
Critics of Vancouver’s plan urged that no more public funds be spent on the Olympics, and called for the units be converted into subsidized housing. About 25 percent of the units are scheduled to be be subsidized housing.
“Anybody who says they couldn’t have seen this coming doesn’t watch the markets and remember history,” Garth Mullins, a veteran Vancouver social activist told city councilors.
The 2010 Olympics will also have an athletes village in the mountain resort of Whistler, British Columbia. That C$161 million project has been largely publicly funded from the start and does not have financial difficulties.
Most of the Whistler units will be marketed as affordable housing for workers at the resort.
Reporting Allan Dowd, Editing Peter Galloway