Here’s your open-topic post for Friday Dec. 7th:
-Vancouver residents should brace for major tax increase.
-Whistler proposes 6% tax hike.
-Fraser Valley house prices at 8 month low.
-Erosion risk in BC’s economic foundation.
-US foreclosures hit a record high.
-An imperfect solution to prolong the pain.
What are you seeing out there? Post your news, links and anecdotes here!
Vancouver city council has released a report detailing plans to use the ‘Olympic Legacy Reserve Fund‘ to cover extra costs related to hosting the winter games. Words like ‘legacy’ are often used to indicate something long-term and ‘reserve’ sure sounds like it would be something extra set aside for a rainy day.
But opponents say that far from providing long-term legacies, as its name implies, the fund amounts to an Olympic operations budget.
Among the items it covers are a $1.4-million communications campaign, $1 million for the city’s host pavilion, $2 million for hosting dignitaries and $2 million for the “look” of the city during the Olympics.
The $20 million is a significant amount in a city budget where $5 million represents a one-per-cent tax increase.
But there we are, all the extra costs from hosting the games are accounted for.. If you happen to believe that, I have a wonderful second-hand bridge that I can sell to you for a tremendous bargain.
On a related note I found this article on Forbes about the ‘winners curse‘ that many host cities experience – the one exception being the 1984 LA summer games which actually turned a tidy profit since they had most of their infrastructure already in place and didn’t require a lot of extra construction:
“When multiple cities bid, each has a different view of what the revenues will be, and the one with the brightest economic forecast usually wins,” says Evan Osborne, an economist at Wright State University. But often, tourism revenue, job creation and ticket sales don’t pan out as expected, leaving local taxpayers with what Osborne calls “The Winner’s Curse.”
Former Salt Lake City Deputy Mayor Brian Hatch, a key player in securing that city’s winning bid for the 2002 Winter Games, recalled showing some Beijing officials around that year to help them prep for their city’s hosting role in 2008. They found hotel rooms at nonevent ski resorts easy to come by.
“People tend to avoid Olympic cities the year of the event, thinking it will be too crowded,” Hatch says.
Who wants a brand new house for 40% less than its book value? Welcome to the slumping American housing market.
Lenar Corp has agreed to shift 11,000 properties to Morgan Stanley for 40% less than book value to get them off their balance sheets:
“The deal was done on the last day of the company’s fiscal year, partially in an effort to generate tax-loss carry backs,” said Eric Landry, a Morningstar Inc. analyst. “The fact that it closed so late [9:30 p.m. on the last day] in the year and was priced at only 40% of book value may indicate just how eager Lennar is to slim down its balance sheet — and the degree to which it will go to do so.”While details remained sketchy on Monday, a multimillion-dollar deal to shift 11,000 properties off the books of the nation’s largest home builder raised concern among analysts that the mortgage meltdown was continuing to spread.
