2010 athletes' village to be ready despite problems

Tue Oct 6, 2009 6:42pm EDT
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By Allan Dowd

VANCOUVER, British Columbia (Reuters) - Athletes' housing for the 2010 Winter Olympics will be ready on time, despite earlier financial problems that Vancouver's mayor said on Tuesday had threatened to make it a "train wreck."

But Vancouver taxpayers, who were forced to bail out the more than C$1 billion village project this year, may not get all of their money back if the city's real estate market does not rebound significantly after the Games are over, officials said.

"It's all speculation at this point, until we start to see the sales pace," said Mayor Gregor Robertson.

A city-commissioned report on the financial woes of the Vancouver athletes' village, released on Tuesday, criticized the selection process for the developer, saying it did not give a full picture of the financial risks to taxpayers.

The report also cited other problems early in construction, including a lack of budget information, that were "by any other definition, a train wreck," Robertson said.

The project is designed to house 2,800 athletes and officials during next February's Winter Olympics and Paralympics. The village was originally intended to be privately funded through selling many of the units after the Games as upscale condominiums.

But the financing provided by U.S. hedge fund Fortress Investment unraveled last year amid the credit crunch and a slowing housing market. Fortress then froze the developer's loan, blaming construction cost overruns.

Vancouver, which guaranteed Olympic organizers the project would be completed on time, agreed to buy out Fortress's loan and provide a new one -- a move that could save the project C$100 million in interest costs.   Continued...