VANCOUVER (Reuters) - The developer of the main athletes village for the Vancouver Winter Olympics went into receivership on Wednesday amid continued weak post-Games sales of the project as luxury housing.
The legal move gives the city of Vancouver, which had to bail out the private developer’s finances two years ago, complete control of the C$1 billion project that has been praised for its environmentally friendly design.
City officials said the decision to seek a court-appointed receiver was by mutual agreement, but acknowledged it came after “tough negotiations” and with Millennium Development unable meet future loan payments.
“Instead of paying us a cheque, which they were unable to do, they said here is the asset,” city manager Penny Ballem told reporters.
The surprise announcement came just hours after the Vancouver Organizing Committee said it was confident its final budget for the 2010 Games released in December will show it ended without a debt. VANOC did not finance the village project.
The project that housed 2,800 athletes and officials was hailed as a success during the Games in February, but its finances were problematic even before construction began.
The original plan called for it to be paid for by selling most of the units as high-end housing, but Millennium’s original loans were frozen in the 2008 credit crisis and the North American housing collapse.
The city, which had guaranteed Olympic officials the village would be ready in time, was then forced to take over Millennium’s loans to ensure construction continued.
Despite a recovery of Vancouver’s housing market the real estate sales in the village failed to materialize after the Games, giving the project on the waterfront near downtown Vancouver an almost ghosttown look.
Mayor Gregor Robertson acknowledged even with the latest financial reorganization it was still unclear if city taxpayers would get back all of the C$750 million they loaned Millennium to get the project completed.
”It will be very difficult to recoup all of the investment for taxpayers, Robertson said. “Patience is critical.”
Robertson said the financial uncertainty had been hurting sales efforts, and he remained confident it would eventually become a vibrant neighborhood for the city.
The 2010 Games also had a village built near the ski resort community of Whistler. That project was designed to be affordable housing after the event and has largely avoided financial problems.
Reporting by Allan Dowd; Editing by Alastair Himmer