Vancouver View -- Government to Tackle Olympic Village Finances Saturday

The British Columbia legislature will reconvene Saturday in a bid to resolve the Vancouver Olympic Village financing crisis.

Premier Gordon Campbell, however, did not announce a date for the emergency session when he agreed to the City of Vancouver's request on Wednesday.

Vancouver city council voted unanimously Monday to ask the province to amend the Vancouver Charter so it could borrow $458 million to complete the project. The city's constitution requires a referendum to approve borrowing for capital construction.

The last installment of a $100 million emergency loan to developer Millennium was scheduled for Jan. 15. Without a cash infusion by mid-February, construction on the city-owned Southeast False Creek land could stop.

Lender Fortress Credit Corporation, part of a New York Stock Exchange hedge fund, quit paying after its September installment because of $125 million in construction cost overruns. The city, however, made a completion guarantee in mid-2007 that assumed the risk for the entire $1.075 billion project. Standard and Poor's rating agency said Tuesday that Vancouver was put on credit watch for a possible downgrade.

"Depending on the scope of the city's financial obligation, we believe Vancouver's potential debt burden might not be consistent with the 'AA+' rating," Standard & Poor's credit analyst Stephen Ogilvie wrote in a bulletin issued Tuesday.

Allan Warnke, a political science professor at Malaspina University in Nanaimo, B.C., said granting the city emergency borrowing power is the only option because voters "would turn it down."

"Then you are not only operating from square one, but you're operating behind the eight-ball," said Warnke, an ex-Liberal MLA.

A new loan source might be within reach of both the city and province. Whistler is building its Olympic Village with a $100 million loan from the Municipal Finance Authority of British Columbia and it's possible Vancouver could apply to the MFA.

VANOC CEO John Furlong downplayed worries that the cash crunch could delay the scheduled Nov. 1 handover so that it can be readied for 2,800 athletes.

"There's a lot to do and the schedule is obviously tight, but there is a determination and a belief that they'll get there," Furlong said.

NDP leader Carole James, meanwhile, wants B.C. Auditor General John Doyle to investigate the controversy. She wrote to Doyle Tuesday asking him to probe the project. The province is ultimately liable for Olympic financial losses and James said Campbell has not disclosed the true costs and risks of the 2010 Games.

"You don't build support for the Olympic Games by hiding the truth," James said. "You don't build support for the Olympic Games by hiding the costs."

Michael Macdonell, spokesman for the Office of the Auditor General, said Doyle is expected to respond within a week.

In Thursday's Globe and Mail, a memo from Estelle Lo, Vancouver's former chief financial officer, to then City Manager Judy Rogers reveals that concerns over the project were raised months ago.

"Are the increased costs all beyond their control?" Lo inquired. "Have they demonstrated due diligence in controlling costs? It may shed some light if we reconcile the original numbers against these sets of numbers [the estimated $60-million to $100-million in overruns] and also see how these numbers compare to the city's own independent 'quantitative survey' that was done at the start of the project.

"If the city covers the project overruns, is this part of the city's $200-million guarantee to Fortress or is this in addition to?"

Lo was forced to resign a few weeks after writing the memo. Rogers explained Lo was dismissed for not being "a team player."

The Olympic Village's troubles are on the agenda for the Jan. 21 closed-door VANOC board of directors meeting. A new, recessionary budget is expected to be approved. The IOC has scheduled a Feb. 16 project review.

With reporting from

Bob Mackin in Vancouver.

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