January 13, 2009 / 3:20 PM / in 9 years

Vancouver seeks emergency loan for athletes village

TORONTO (Reuters) - The city council of Vancouver, site of the 2010 Winter Olympics, is seeking to borrow C$458 million ($372.4 million) from the Canadian province of British Columbia so that construction of the Games’ athletes village can be completed, media reports said on Tuesday.

<p>The Athletes Village for the upcoming 2010 Olympic Winter Games is shown under construction in Vancouver, British Columbia October 7, 2008. REUTERS/Andy Clark</p>

On Monday, council voted unanimously to ask the provincial government for a one-time amendment to the city’s charter that would allow Vancouver to borrow the money from the government without holding a public referendum on the question, the Globe and Mail and the Canadian Broadcasting Corp said.

The project lenders, led by U.S.-based Fortress Investment Group, stopped advancing money to the developers in September as construction costs rose and fears mounted that Vancouver’s slowing housing market meant that post-Games real estate sales would not pay off the loan.

The cost of building the 1,100-unit village is now estimated at C$875 million, up from the previous budget of C$750 million. So far, Fortress has lent C$317 million to the village’s developer and the city has lent it C$100 million, leaving another C$458 million to cover, the Globe said.

Vancouver Mayor Gregor Robertson said last week that the city would be on the hook for the entire C$875 million if the project funding does not go through because of a completion guarantee signed by the previous city council in 2007.

The project’s original financing called for the athletes’ accommodations to be built by a private developer on city land, with the units converted into housing that would be sold off after the Olympics to pay for construction.

The facility near Vancouver’s downtown is being built by privately held Millennium Development, which, according to the contract, would also buy the land from the city after the Olympics.

Fortress also owns resort operator Intrawest Corp, which runs the Whistler ski area north of Vancouver where Olympic alpine ski events will be held in 2010. The Games will have a smaller athletes village in Whistler, which is funded separately.

Representatives of Vancouver city council were not immediately available for contact.

($1=$1.23 Canadian)

Reporting by John McCrank; editing by Peter Galloway

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