Scramble on to save 2010 Games village in Vancouver

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(Agencies)
Updated: 2009-01-14 11:25

VANCOUVER - Organizers of the 2010 Olympics remain confident the Vancouver athletes village will be completed on time despite the project's money woes, the group's executive director said on Tuesday.

Provincial officials are waiting for a request from the city of Vancouver for help refinancing the CUS$1 billion (US$820 million) housing project, which saw its private funding dry up as the Canadian city's real estate market slowed.

Standard & Poors warned on Tuesday the financing problems could hurt the city's credit rating if it is forced to borrow extensively to ensure the village is ready when the Games begin in February 2010.

Vancouver Organizing Committee (VANOC) Chief Executive John Furlong acknowledged his group was hearing concerns about the issue, although it is not directly responsible for funding the project that will house 2,800 athletes and officials.

"This is one that nobody is obviously happy about, but I think there is a belief that we have the focus and the attitude and determination to get this where we need to be," Furlong said.

"Clearly at the end of the day we have to have an Olympic village. We know that. The city knows that," he said.

The facility was originally to be funded by a private developer, Millennium Development, which planned to sell many of the housing units as high-priced waterfront condominiums after the Olympics.

Vancouver which agreed to sell the land to the developer hailed the deal in 2006 as a way to fund the Olympic-related project at no risk to taxpayers.

But Millennium had trouble getting financing so the city quietly agreed in 2007 to guarantee lenders, led by US-based Fortress Investment Group , it would take responsibility

for completing the project if Millennium could not.

The city was forced to help Millennium again in September 2008 when the lenders stopped advancing money as construction costs rose and fears mounted that a slowing housing market meant that post-Games real estate sales would not pay off the loan.

News of the 2007 loan guarantee and that lenders had cut off the funding were made public last week.

Vancouver city council voted on Monday to ask British Columbia's legislature to give the city the legal authority to ensure the needed financing, but provincial officials said they have not yet received that request.

The city is expected to ask for its charter to be amended so it can borrow more than CUS$450 million without holding a lengthy public referendum. The city is also trying to negotiate a new financing deal with Fortress.

Vancouver debt is now rated AA+, but Standard & Poor's said that might change if the city is forced to borrow substantially to replace the funding being provided by Fortress.

The 2010 Games will also have an athletes village in the ski resort community of Whistler, British Columbia, where alpine events will be held. That project, which will be used to provide low-cost housing after the Games, has not had financial difficulties.

(US$1=$1.22 Canadian)