Is Vancouver the new Fortress?
The Vancouver Sun is reporting that the City of Vancouver is expected to buy out Fortress Investment Groups financing of the $1 billion Olympic Village:
Vancouver city manager Penny Ballem is meeting with council Wednesday morning to tell them arrangements have been made to assume the $750 million loan Fortress made to Millennium Developments.
In its place, the city is expected to sign a financing deal with a consortium of Canadian financial institutions.
In October Fortress stopped advancing money to Millennium for its monthy construction draws after it claimed the developer was “out of balance” on its loan requirements. That forced the city to borrow $100 million from itself to pay the monthly draws and provoked the council into asking the provincial government for special legislation allowing it to borrow an unlimited amount of money in order to consider removing Fortress as the lender.
February 19th, 2009 at 6:07 pm
Re Post # 71
Forgot to mention that my understanding is that Developers (or any property owners) qualify for these re-classifications by Oct. 31 of the previous year. COV is out of luck and can't stop it.
BC Assessment is THE authority that determines the eligibility for such re-classification .
All other property assessments will be finalized when the appeals process has been exhausted .
The Local Gov't will then establish mill rates for each property classification .
What will happen is that these properties re-classification to a lower class will then shift the tax burden onto other properties, likely residential (as opposed to business, etc.which historically pays a much higher tax rate).
My guess is that the City only caught this re-classificiation recently, it can't stop it…and is shite -ing bricks now when it is forced to have OTHER property owners make up the difference with higher property taxes., and is fearing a major backlash .
This is an interesting collateral damage/backwash from the collapsed condo market , with many expensive sites sitting vacant , and likely for the foreseeable future
February 19th, 2009 at 5:45 pm
BOWRA just pulled down their LARGE / TALL signs at the (Ex Chandler Group)Garden City development in Richmond.
Curious what's up….looks like smaller signs are going to be set up.
February 19th, 2009 at 5:42 pm
City concerned over developers skirting taxes by rezoning land
http://www.theprovince.com/news/City+concerned+ov…
QUOTE:
A couple of shrubs and a few park benches thrown up on vacant land owned by developers means they can dodge hundreds of thousands of dollars in tax bills.
These miniparks or vegetable gardens have sprouted on some half-a- dozen sites in Vancouver and are saving the developers $1.3 million this year. And that has the city worried that more requests will arise as the economy tanks and developers seek cheap ways to carry property as they ride out the storm.
Council voted Tuesday to put together a detailed argument to the province asking that the loophole be closed.
Classification of property for tax purposes is done by the B.C. Assessment Authority and would require the province's involvement.
To reclassify, developers create parks or garden space and apply for rezoning from Class 6 (business or commercial) to Class 8 (recreational or nonprofit). That move cuts taxes by about 70 per cent.
Among the proper- ties that have been re- classified in Vancouver recently:- Omni Group's popular gardens at Pacific and Seymour. The seven parcels are worth an assessed $24 million. All are now Class 8, saving Omni $357,000 this year alone.
- Prima Properties' community garden at Burrard and Davie. The $24-million site was headed for retail and condos. As Class 8, it saves Prima about $345,000 a year.
- Sunco Enterprises' gardens at Oak and 16th. On land worth just over $3 million, Sunco saves $47,000 for the scraggly site.
- Cressy Developments' two community parks, one at West 1st and Columbia and one at Drake and Howe alongside the Granville Street Bridge.
The first, directly bordering Olympic village construction, is worth $14.9 million and earns a tax break of $222,000. At the moment it features two benches, a line of young trees and a stretch of gravel. The other, the site of a former Travelodge hotel, is worth more than $20 million. Its two benches, handful of saplings and gravel earns it a $308,000 annual tax break.
========
This is VERY interesting:
On way to Whistler this past Sunday, I drove by the one at Davie and Burrard….I thought the City owned it.
However, if the developers are pursuing this legally, and BC Assessment agrees to it(*****IMPORTANT******!!!) ,the COV is simply a bunch of baby-whiners.
COV: What a bunch of hypocrites….agreeing to the Olympic Village, screwing up royally… ask the Province to amend legislation to allow a loan without referendum…now it wants to change another existing rule someone ELSE is using.
February 19th, 2009 at 5:31 pm
Post # 62
Anonymous:
Re : People still willing to pay high prices ?
That's THEIR choice, time will tell if that holds up.
Monster houses?
Many SFH residential zonings have always allowed the large Monster / McMansion house.
However, when the lands were developed(often after WW 1,…. Depression….,WW 11 )people didn't have the funds and UNDER built with respect to what they were actually allowed to build .
When the first wave of Rich Asians came along, the builders wanted to make the biggest $$$ possible , thus milk the Rich Asians, and then maximized the allowable Sq. Ft. of the new house , which was often twice the size (or larger) of what existed previously.
Hence the Monster/McMansion House.
February 19th, 2009 at 5:27 pm
"We are pleased to announce that we sold 95% of the units at our First Come, First Serve Sales Event which was held on February 7th and 8th."
hhhmm … but so far, so they say, 7 can't complete, but for their marketing purposes, these units are 'sold' even though they aren't. Interesting contradiction in the email.
There were only 44 units for sale to start according to Bowra's website.
February 19th, 2009 at 4:37 pm
Just received this from H&H.. looks like they didn't sell out, plus something interesting: 7 more units for sale from people who were unable to complete. I forsee more of this coming…
Thank you for your interest in this project.
We are pleased to announce that we sold 95% of the units at our First Come, First Serve Sales Event which was held on February 7th and 8th.
You registered on one of our preview dates and we are contacting you first to give you the opportunity to purchase one of the last units in this exciting project.
The only 2 units that did not sell at the Receivers Sale were:
Unit 404 – 2BDR for $432,600 (865 SF) [which has subsequently sold]; and
TH5 – 2BDR Townhome for $445,000 (971 SF).
In addition, we have some 2BR units from priority locations, including prime view apartments that will not complete for a number of reasons including being unable to obtain adequate financing. These units are:
TH4 – 2BDR for $567,000 (1273 SF);
TH13 – 2BDR for $585,900 (1273 SF);
TH16 – 2BDR for $551,250 (1204 SF);
Unit 708 – 2BDR for $446,250 (834 SF);
Unit 1004 – 2BDR for $523,550 (904 SF);
Unit 1104 – 2BDR for $528,150 (904 SF);
Unit 1304 – 2BDR for $536,550 (904 SF);
All prices include GST.
The Bowra Group will be having a further sale and will be entertaining back-up offers again this weekend on Saturday February 21, 2009 from 12:00PM to 4:00PM.
February 19th, 2009 at 4:17 pm
Anonymous: I didn't mean anything other than "large, i.e., greater than 3000 sq. ft" when I used the term "monster". Other than size, I don't know what else would constitute "monster". I didn't mean that it looks like cookie monster or anything like that!
February 19th, 2009 at 4:15 pm
Speaking of Hong Kong – stuff isn't moving like it did in the boom years. Check out this picture from the AP of unused shipping containers stacking up in Hong Kong, nobody is sure what to do with them all yet:
http://s.wsj.net/media/0218pod13.jpg
February 19th, 2009 at 3:55 pm
Anonymous:
#62 anon, I found that article in todays International Herald Tribune epage. Could be that people living in Hong Kong are a little more aware of current events. Otherwise it's mystery.
February 19th, 2009 at 3:35 pm
Rose coloured glasses in the overpriced fishbowl village that is Vancouver. Good luck with that stupidity.
Dow average now at 6.5 year lows and has nowhere to go but down. Industrial production dropping almost as fast employment.
Double digit price decreases in real estate this year across the board and good luck Vancouver Taxpayers selling those Olympic Village millionaire condos in 2010.
February 19th, 2009 at 3:26 pm
lilypad:
just because a house maximizes square footage does it automatically qualify as a "monster house".
February 19th, 2009 at 3:25 pm
globalview (61) and lilypad (42) and no-lympics (48)
if things arent so rosy in hongkong then why are properties on the westside selling for the prices such as, eg. lot on olser st. of $1.366 mill and a new house (corner of 51st and olser st.) for $2.75 mill. im assuming they were hongkong or asian buyers. i dont know if the chinese new year had an effect on the market(more people visiting from asia) but im hearing of a few more sales lately. im assuming these are sophisticated buyers with that kind of money. the lot on osler has lots of huge trees on it and is beside a lane. im a little puzzled.
lilypad:
what do mean by "monster house". i think lots of big houses dont look like "monsters", as long as they are tastefully done and generally fit into the neighborhood. there are lots of older houses that are not kept up and look worse than big houses.
February 19th, 2009 at 2:49 pm
Things aren't all that rosy in Hong Kong either, no buyers, no sellers. Full article suggests it may take 5 or 6 years before you get your money out at this point.% or 6 years Hmmmmmmmm , thats a long time in Vancouvers jittery real estate biz, isn't it?
HONG KONG: Hong Kongers, who turned pessimistic about property early in 2008, now seem to be at something of a stalemate: Buyers are unwilling to commit unless they see a real steal, and sellers are unwilling to cut prices all that much.
There is reason for their reluctance. People here don't talk about the subprime crisis or the credit crunch. Across the territory, the current economic woes are dubbed the "financial tsunami," sweeping into Asia from the United States and Western Europe.
The term is redolent of the real tsunami that swept Asia at the end of 2004. But it also carries a reminder that Hong Kong has seen its share of crashes: the Asian financial crisis in 1997 and 1998, and the near-meltdown during SARS in 2003.
"The market is very quiet since the Lehman Brothers collapse," said Anita Fan, senior associate director in the investment department at the brokerage DTZ. "It is quiet, but I don't see the price has really dropped a lot."
Residential prices fell 19 percent in the six months through November, according to the most recent data from the Hong Kong University Real Estate Index Series, a drop that is mostly the result of a 10 percent correction in November. Yet there were heady price gains at the start of 2008, so the net result was a one-year decline of just 6.9 percent.
Who's going to blink? Is this a parallel for Vancouver market, will desperation set in and blow the lid off after an extended stalemate? The real estae commentators are trying to suggest the market will turn around by the spring, the Hong Kong commentators suggest maybe 5 or 6 years. Who's right? The rest of the world or our genius local pundits?
February 19th, 2009 at 2:33 pm
Regarding the buyout of the Olympic Village, Mayor Robertson is quoted to have said: We have gone from an agreement that clearly was not in the best interests of taxpayers to an agreement that puts Vancouver taxpayers first
Are those who made an agreement that was not in the best interests of taxpayers (i.e. the previous city administration) going to be held accountable? Didn't they make totally asinine guarantees to deliver market-ready units to Fortress by a certain date that they had no business making?!
February 19th, 2009 at 2:29 pm
Re Media:
Yea it is quite interesting how they pick and chose.
Don't the media have the mantra
" If it BLEEDS it LEADS"
…..aka the worse the Bad News (ie shooting , murder etc.)then it gets THE headline or makes THE lead story?
EXCEPT if its bad "economic" news ??????????
In WAR time its called "Propoganda"
In PEACE time its called " Advertising "
What time is it NOW ?
The TRUTH is the TRUTH…whether its good news version or bad news version, so the nedia should quit dressing it up and sugar coating it.
If its BAD news, let people know so they can get prepared.
To do otherwise is irresponsible.
February 19th, 2009 at 2:24 pm
NO -LYMPICS: Interesting reference to the police behaving like a bunch of bully -thugs. I wonder if they will be wearing pink for Pink day on February 25th?
February 19th, 2009 at 2:20 pm
http://www.cnbc.com/id/15840232?video=1039849853
Comments on the 75 Billion Obama earmarked for benefits for those refinancing.
Anybody notice Citigroup and Bank of America dropped 13% each today and together represent over 85 Billion in government aid? GM dropping to $ 2.00?
The bad news tidal wave is NOT done by a long shot.
February 19th, 2009 at 2:14 pm
I am not the only basher out there it seems, are people waking up? two quotes from yesterdays Condohype exchange
1)Nice bit of exegesis.
The Sun originally had the story as something like “Sales Volume Plunges 61%”. As the day wore on (I checked back because I always enjoy the comments in the Sun articles on housing), they changed the headline to add that teaser question “is now a good time to buy?”. So there was some conscious editorial decision to put that spin on it, not just some “reporting too fast” kind of gaffe.
Why the blatant pro-buy bias? In the interests of “balance”, shouldn’t they have also speculated that there may be more drops to come? After all their main headline was about the dire economic predictions in the Throne Speech. I know it’s hard, but try to connect the dots here!
I don’t mind the angle on the story that some folks might be thinking it’s a good time to buy because it’s not untrue. Same as where folks thought buying stocks in November was a good idea. Though you’d think they’d try to interview a potential buyer, rather than simply throwin’ it out there in a headline without factual foundation. But sheesh, at least acknowledge that it just might NOT be a good time to buy too. Isn’t the Sun tired of being mocked?
2)The real fact that is being completly missed in all this is that Cameron Muir is a paid spokesman for the BCREA. The BCREA is the body which organizes support for and manages the buisness for REAL ESTATE SALESPEOPLE AND AGENTS, only! In this context Mr. Muir is not an economist or a real estate expert, columnist or opinionist, HE IS A PAID SCHILL WHO REPRESENTS REAL ESTATE SALESPEOPLE and AGENTS, ONLY.
Mr. Muir is reading a script which has been crafted to attempt to generate businsess for sales people and as such cannot be listened to for facts or information. Mr. Muirs recent speaking through the media WAS IN FACT A paid advertisment FROM AN INDEPENDANTLY PRODUCED INTERVIEW, IT WAS AN ‘INFOMERCIAL’ .
So, to forget that Mr. Muir is a non person with no opinion and is only represnting the intrest of the Real Estate sales organizations is to have left all common sense behind.
February 19th, 2009 at 2:01 pm
One thing I really don't understand is the whole 'stop listening to the bad news' line. Seriously?! What about understanding that there are market contractions and these happen within the system we've chosen.
It seems like people want objective evaluation when it supports their world view or wishes and subjective valuation when the world doesn't reflect their wishes.
I really don't blame people for doing this – I do it too and enjoy not living in constant dispair. But seriously, if you're speaking professionally and take this view how do you every expect to retain your credibility?
February 19th, 2009 at 12:13 pm
Lets be blunt:
Our political leaders are at the equivalent of the nude beach. There is nothing there, they are grasping at straws.
They are ill fit to handle these crises. If they were they should have seen it coming.
Gordon Campbell's modus operandi is to write big cheques and ask questions and give details later.
The 2010 Olympics will be promoted as the " cure what ails you " till the last Polish Olympic athlete gets out alive.
These 2010 games will be mind candy propoganda fest mode on par with a Hitler rally
In the early 1980's the unions had Solidarity marches.
Maybe its time we had another major one in a nonpartisan sense
IMHO, everyone should take to the streets and we have a massive protest before the Taser(or worse) order comes in.
February 19th, 2009 at 12:05 pm
NO -LYMPICS:
#50 no-lympics, I'm just not buying the 'happy talk' from Bob, CKNW, Vanc Sun, BCREA etc etc. The recent propaganda campaign from the weasel crowd is sick but entertaining at best.
Speaking of a very short media memory, what happened to the Paper delivery Mr. Khan story who was attacked, beated and robbed by three uber rascist , coked up, drunken lunatic cops?
Anyone following the Taser death story of poor Robert Djeikanski , it's no wonder the prosecuters said they wouldn't prosecute the cops before the story came out. It looks like they tortured the poor guy to death while he was struggling to breath. Witnesses versions have refuted everything the cops tried to say. What a horrible cover up. No outcry from the press though. Just 'happy talk'. Shame.
February 19th, 2009 at 12:00 pm
The IKEA parking lot was full because of the 50 cent hotdogs and free daycare. Home furnishing sales are way down.
February 19th, 2009 at 11:51 am
james: Huh? Are you saying that inflating the housing bubble was 'fixing the economy' and that it would have carried on inflating forever if it weren't for the democrats? I think both parties, and both sides of the political spectrum are equally guilty when it comes to the blind greed that caused global credit and housing bubbles.