Credit crisis comes to Olympic Village
Gah just posted this link, looks like Millennium Water might need a bail out:
As the credit crisis south of the border begins to creep north, concerns are mounting over the impact it may already be having on construction of the athletes’ village for the 2010 Winter Games.
Last week, members of Vancouver’s city council held an emergency, in-camera meeting to get an update on the project. Much of the discussion revolved around the city’s obligation in the event the developer, Millennium Development Corp., can’t meet demands from the bank because of massive cost overruns, according to sources briefed on the meeting.
The best part? Even if you haven’t been speculating on Vancouver condos, now you get a chance to take part in the collapse since it looks like the City is on the hook for cost over-runs on this particular project. But don’t fret, the absolutely ‘worst case scenario’ at this point looks like a $100 million dollar bill for Vancouver tax payers.
November 22nd, 2008 at 12:11 am
The evil Millenium people are also trying to destroy a heritage building in downtowm Vancouver known as Maxine's Hideaway. They'll rape Vancouver's taxpayers and then they'll erase its heritage. These people have no humanity and need to be stopped at all cost!
November 7th, 2008 at 11:14 pm
Just another feather in Sullivan, Ladner and Campbell's hat. Great job boys!
Campbell's announcement to freeze home assessments was a ploy to keep assessments high so they could keep the mill rate low next year, so they could say that taxes weren't rising so high, yet still pocketing more money to pay back the 100 mill, if the payout stays hidden. Ladner's attempt to whitewash this with his appearance on Bill Good this morning (Fri.Nov 7) on AM980 was eerily like Colin Hansen's "deer in the headlights" look when he was questioned about the Winter Olympics security budget figures by Vaughn Palmer on Voice Of BC on Shaw cable a week ago, Thursday October 30th. They just keep stepping in it, don't they? And we thought the Fast Cats were bad. Those ferries sitting in the Burrard Inlet are going to end being Campbell's legacy to BC, the way he gave them away to Washington Group. Add that to the 30% Hydro increase to be added by another 13% this January and we got them thieving left and right.
Greatest place on earth Gordie? Hope your UBC penthouse condo paid for with BC Rail payola dives like all condos in Vancouver. Or is that the reason he's freezing assessments????
November 7th, 2008 at 2:08 am
I think the posters on this site are morons and or simply never owned property in their life and probably never will. The fact is coal harbour, false creek north water front locations are not going to be affected. Most people who own are affluent and there is non of this bs 5 percent down garbage. Most have atleast put down 25% and have a 1500 loan and if they sell they will not take a low ball price. I know hundreds of people in False Creek north who own and have purchased 1 bed or even 2 beds for 400 to 1 million. most of the people i know have 25% debt on the place if that. To you wishfull renters hoping to sabatoge the market and get a deal in the future to you i say …..(middle finger) have a nice day. and you pansys are bitching about paying 160 bucks so our olympic village can be completed and a huge developer who has poured 100s of millions of his own money in to the economy and litterally employes and has paid for tens of thousands of people's living and family costs and you are bitching about 160 bucks per person…I think i need a barff bag…excuse me while i throw up people in false creek spend $160 in a day at urban fair for a pack of gum and some groceries for 2 days.
October 13th, 2008 at 2:09 pm
Here is my opinion – I would strongly recommend that you think twice before purchasing a Millenium developed unit….my colleague purchased one, and has had nothing but trouble. Metrocan construction will not, I repeat will not fix your deficiencies, and have cut so many corners, there are problems with new units….and Metrocan is the same contractor used for the olympic village. If you see the millenium/metrocan partnership, then run the other way…
What am I talking about, well, my friends unit wasn't properly plumbed, so feces and urine would leak from the top unit down to his living room. Metrocan's response: This is normal. Millenium, What goes around, comes around!
October 8th, 2008 at 8:58 pm
Even at $1000/psf you would have to be a chowderhead (idiot) to buy one. And no the value doesn't automatically go up after a steroid monkey top athlete sweats all over it. Maybe the next Olympics Vancouver gets might be worth $1000 psf but in 2008…NOT
October 8th, 2008 at 11:01 am
Umm wouldn't a frozen rainforest be just a snow forest??
The prices also tops out at $1000/psf not $2500/psf not that it's cheap but it's a real number.
Anyways anyone that has read the follow up articles has learned that there is no more issue, the developer will complete on time just not on budget, there is no cost to the taxpayers.
October 8th, 2008 at 6:42 am
Good point MickeyFinn:
Real Estate is simply like any other traded asset. Hence, it is affected by the same market forces of the day ….which in this case is a lot of speculation . Maybe people should read about Holland's tulip speculation a few hundred years ago…oh yeah, Bre-X or Dot.com bomb more recently.
October 7th, 2008 at 9:37 pm
I'm Dave man c'mon man I've got the stuff on me man
October 7th, 2008 at 8:51 pm
Dave's not here.
October 7th, 2008 at 6:52 pm
Coincidentally there is no Dave here and Dave's websites latest article was written by his wife
Maybe he's taking a vacation from sitting around in coffee shops attempting to skew the cold hard facts by disrupting several blogs simultaneously with his truthiness.
October 7th, 2008 at 6:37 pm
I think we should start a legal fund so that when the Olympic bills come in we can take the shysters to court for a possible refund to the taxpayer.
There will huge bills,especially for security.
October 7th, 2008 at 6:10 pm
Russia and Brazil crumble as commodity prices crash.
The entire complex of commodities and emerging market stocks, bonds, and currencies is now in free-fall as the economic crisis spreads like brushfire, threatening to draw every corner of the globe into the vortex of recession.
http://www.telegraph.co.uk/finance/markets/314836…
October 7th, 2008 at 5:38 pm
So let me get this straight. Somehow the sweat of some of the worlds greatest athletes make these suites worth $2500/sq. ft. To me it isn't worth $250/sq ft after sweaty pigs the worldover have used your suite for 10 days. I think we have found the greatest fool (village idiot) who would pay anywhere near $2500/sq. ft for any place in the frozen rainforest. Listen you can almost hear the price of real estate drop as we type….. I can.
October 7th, 2008 at 5:25 pm
Re: Olympic village. Given the record of hedge funds in producing lasting social benefits (Pirate Capital says it all, some really bad thing have been done in the name of profit.), if the project is taken over by the city, probably helped by Gordo, this could perhaps be a less bad thing. The city couldn't possibly leave a worse legacy, and at least more of the money would stay here. Maybe. I'm not too hopeful. Hence less bad, not good.
October 7th, 2008 at 5:08 pm
Dave is on a break.
October 7th, 2008 at 4:06 pm
Vancouver Banker…Thanks for the info and comments.
I recall reading a while back Peter Wall getting scolded by his fellow developers for having the audacity to pay over $100 per sq. ft for land in the False Creek area . When I did the math for this Olympic Village raw land price, I couldn't believe it, it made Wall look like a piker.
All these deals involving any level of Gov't are becoming synonymous with all sorts of bizarre contract language…but it is also a sure bet the elected officials have exposed the taxpayers to all sorts of legal and fiscal liabilites to ensure their pet project happens. I think enough is getting enough, even though I don't live in Vancouver….maybe Gordon Campbell will step in and all the rest of us in BC have to help bail Vancouver out….oh no !!!
October 7th, 2008 at 3:52 pm
Vancouver Banker…thanks for the info and comments.
I recall reading a while back Peter Wall getting scolded by his fellow developers for having the audacity to pay over $100 per sq. ft for land in the False Creek area . When I did the math for this Olympic Village raw land price, I couldn't believe it, it made Wall look like a piker.
All these deals involving any level of Gov't are becoming synonymous with all sorts of bizarre contract language…but it is also a sure bet the the elected officials have exposed the taxpayers to all sorts of legal and fiscal liaibilites to ensure their pet project happens. I think enough is getting enough, even though I don't live in Vancouver….maybe Gordon Campbell will step in and all the rest of us in BC have to help bail Vancouver out….oh no !!!
October 7th, 2008 at 3:47 pm
Take away the construction industry and "Canada is left with a mere 500 new jobs,"
oh oh…
October 7th, 2008 at 3:36 pm
Vancouver is a world-class shitty.
October 7th, 2008 at 3:31 pm
Even Dave,Krish & dosh realize now the market is toast
LOL. Yah, where are all the realtor trolls today? You know they have time on their hands.
October 7th, 2008 at 3:27 pm
If cope gets elected it will be social housing. They'll move all the crackheads away from the Woodwards development and into the Millenium.
October 7th, 2008 at 3:14 pm
Hey bdk, I think Vancouver real estate is a good bye…
October 7th, 2008 at 2:41 pm
It's over now isn't it? Is there anyone out there who thinks the market is a good idea?
It's too bad a lot of these people didn't take a step back and think that 25 years is a long time and the huge loss that it takes to continue to "own" a rented unit downtown at a loss of $2,000/month when one wants to expand and have a family.
The hidden wealth evaporation will be the baby boomer parents who've gone and put a mortgage on their principal residence in order to fund their childrens' condos "if we don't buy now they'll be priced out forever"
Even Dave,Krish & dosh realize now the market is toast, there is not a single person left in Vancouver who thinks it's a good idea. Has anyone ever seen a situation where negative investor sentiment led to gains?
Especially given the thousands more units coming that underfunded specuvestors had planned to flip to non existent buyers…..
October 7th, 2008 at 2:34 pm
i think we deserve this. damn bulls and their dreams. we are going down fast and furious. we will be worse than where we started. i am very pessimistic, hmm, maybe financial meltdown.
October 7th, 2008 at 1:47 pm
There's a liquidity crisis out there boys & girls.
Everything we could previously take as a "given" as regards investing and finance should now be questioned. Support levels for stocks have turned-out to be nothing more than road-side rest stops as stock prices have zoomed by those support levels heading further South everyday and setting new lows like politicians make election promises.
The liquidity crisis is affecting the Olympic Village and it will surely affect the overall Vancouver real estate market.
Remember real estate prices are like any other traded asset, so the price is set by the sale made "at the margin."
Given the financial upheaval, buyers will stay "on strike" and at least some vendors are going to be forced to sell (you can count on it with all the financial turmoil… some Vancouver real estate owners will experience a margin call). When those two events collide – a buyers' strike combined with desperation sales – you will see some sales at low prices. Those sales will set the new standard… it'll be "mark to market" for the rest of the real estate.
In other words, buyers will focus on the new low selling prices as they are set… naturally lowering the bar just like with stocks. A vicious circle of price reductions (if you are long Vancouver real estate that you need to sell).
Fear will prevail for at least some period of time.
Bring it on.
October 7th, 2008 at 1:41 pm
Dow down 508 at close. A last-minute plunge. A tech anal guy would read something into that.
October 7th, 2008 at 1:15 pm
In other news the TSX just closed down 400 pts today to finish at 9,829 – Those are some thick slices of salami. I think the index is down about 33% from June's high. Dow closed down 450.
October 7th, 2008 at 1:01 pm
I've noticed that the swarm of workers at The Pier development in North Vancouver has disappeared. Nobody on site at all. Anybody have any ideas?
October 7th, 2008 at 12:54 pm
Cheers to Van Banker for the details on this. This story is so very disturbing on so many levels. I don't know where to begin. Our city is going to be in such a World of hurt post-Olympics.
The perfect storm is looming and it is ugly.
October 7th, 2008 at 12:37 pm
"Noname Says: October 6th, 2008 at 4:30 pm
bcubbins said “Only 60% sold!!!! I wonder how long it will take to sell the remainder?”
And how much of that 60% will back out before completion?"
It's not even 60% in fact. That's only 60% of the units that have been launched. There are still several buildings yet to come!
October 7th, 2008 at 12:31 pm
"NO -LYMPICS Says: October 6th, 2008 at 10:01 pm
Ah yes, reality bites. This Olympic Village was fishy from the start….the price paid was exhorbitant. I hope the whole thing crashes and burns, the whole Olympic endeavour disgusts me. My view is that the financing will dry up due to the global credit crunch …and the suckers that bought into these $1000 sq/ft pigeon holes will bail….the locale ain’t that great, so the price paid was already way over the top. However, how will Vancouver lose…didn’t they make a pile selling the land? PS Good comments by others, my compliments."
FYI, the financing is already arranged for Olympic Village, that won't go anywhere. The cost overruns will either by covered by the developer, or the City will take over and fund it themselves.
However, I'm also curious about how many buyers will bail when their condo is underwater, not to mention the several hundred units that haven't even been launched yet!
Regarding the City getting money on the land, you're going to love this fact of information…. the land purchase is included in the project costs, so the City only gets paid for the land from the sale of the condos. So if they don't sell all the condos, the City doesn't get paid!
October 7th, 2008 at 12:20 pm
"My question is does that mean pre-sale purchasers are buying a lived-in condo?
I’d hate to be the guy purchasing the unit used by the US Men’s hockey team."
Yep, exactly.
October 7th, 2008 at 12:19 pm
"Global ran a piece on this. NPA mayoral nominee / insurrection leader Peter Ladner says the city has made no commitment to intervene but will be there to “mitigate” any risks to the taxpayer. Thanks for looking out for me, Pete."
That is an outright lie. The City has signed a completion guaranty and is on the hook to finish the project no matter what happens, end of story. Worst case, they will kick out Millennium and get a blue-chip developer like Concert or Concord to come in and finish things. Should have taken one of the established developers in the first place, they could much more easily absorb the cost overruns and also may have sold the project better.
October 7th, 2008 at 12:11 pm
The asking price psf for Olympic Village ranges from about $800psf up to $2,500psf.
Millennium totally screwed up the phased launches and presales. Millennium is toast, and the taxpayers will definitely be on the hook for this one.
I know lenders in on this deal; they're not worried because they will all get paid back by the City worst case. As a taxpayer, it makes me sick.
October 7th, 2008 at 11:07 am
VANCOUVER – Vancouver's Olympic legacy is at risk due to the economic uncertainties sweeping the world.
Tumbling stock markets, tightening credit lines and slumping investor confidence could erode many of the gains that Olympic organizers are hoping will flow from the 2010 Games, economists warn
Gee I think I've heard that kind of talk before… who was it… oh yeah…
From the people who opposed the Olympics from the start.
October 7th, 2008 at 10:37 am
That way taxpayers can enjoy the upside when this thing blows over.
hate to tell you this but there is no upside, at around $1000 per sq. ft. this development will be underwater for the rest of this century …
October 7th, 2008 at 10:24 am
I have the solution! The city can put up more financing to complete the project but will require an equity stake in Millenium as compensation. That way taxpayers can enjoy the upside when this thing blows over.
October 7th, 2008 at 10:16 am
#51 Mold City -
So they’ve transferred ALL risk to city taxpayers?!? I guess Vanoc does know what they’re doing, to bad the government doesn’t seem to.
Yeah, I flashed on that statement, too. Seems they took the money from the Province and the Feds, handed it to the city and washed their hands and walked away. $30M is just a drop in the bucket. Sweet deal for them.
October 7th, 2008 at 9:52 am
Vancouver is a one-industry town, the only industry being real estate and property development. It reminds me a lot of Oshawa and GM – they RUN the place, and they'll tell you what THEY think you need to know, and when they say "jump" the politicians say "how high". Anything else is complete wishful thinking. OF COURSE Vancouver was going to get the bid, and OF COURSE the taxpayers were going to be on the hook for every over run and delay and stubbed toe the developers suffered, and Vancouver will pay the price for the next decade (at least) for the Olympics and the RE bubble, while Gordo and his back-slapping cronies at Marathon etc take your cash and laugh in your face.
October 7th, 2008 at 9:49 am
Raincouver, the final paragraph of that Sun article really inspires confidence:
Vanoc also said in its statement that is "confident in the city's fiscal management" of the Olympic project. It long ago transferred all of its risk in the project to city taxpayers by giving Vancouver $30 million in venue financing it received from the provincial and federal governments.
So they've transferred ALL risk to city taxpayers?!? I guess Vanoc does know what they're doing, to bad the government doesn't seem to.