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.
The city had promised the project would be ready to hand over to the Vancouver Organizing Committee (VANOC) at the end of October and that is now expected to take place on November 4, city officials said.
The financial problems encountered by the construction of athletes’ villages in Vancouver and in London for the 2012 Summer Games show the need for Olympic host cities to clearly understand the risks they are taking, Robertson said.
“We are obviously learning our lessons from it here,” said Robertson, whose election victory last year was due in part to voter anger over the handling of the project’s financing.
The 2010 Games will also have athletes’ housing in the resort village of Whistler north of Vancouver, where many skiing events will be held. That C$161 million project has not had the same financial struggles as the Vancouver project.
“We’re in the final stages of turning it over to VANOC,” said Joe Redmond, president of Whistler Development Corp.
Most of Whistler’s housing will be used after the Games to provide affordable homes for employees in the village, which has long suffered from housing shortages, especially during the winter.
Reporting by Allan Dowd; editing by Rob Wilson