Vancouver Condo Info

Little posted a link to this Province newspaper story over the weekend. Subcontractors at the Vancouver Olympic Village are accused of taking shortcuts in its construction, including not insulating all in wall pipes.  This brings a risk of mould problems 3 or 4 years down the road:

During the meeting, Loftus says, Jasper was shown photos of the uninsulated pipes in various buildings on the site and said he would get back to the insulators union, but Loftus said he’s still waiting. A second visit to the site weeks after the meeting found the drywall still in place with the pipes now hidden behind it.

“I don’t think they can fix it on time,” Loftus said. “They would have to take the walls down, inspect all the piping and then do it right. It would certainly be cheaper to do it now rather than later, but I’m guessing it would cost millions.

“And if they found mould, it would be even worse.”

Ballem said she wasn’t told about any specific problems with the construction of the Olympic Village, only that a union had some concerns about quality control.

“This is the first I’ve heard of this,” Ballem said when contacted by The Province. “If the concerns are true — and I have no evidence of whether they are or not — and they not being paid attention to, that’s a concern for the city.”

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.

We try to keep our reporting of rumours to a minimum here, but Jesse has been a reliable source before.  Here’s his comment from the previous thread.

Of course you don’t need to delve into second hand rumors to find problems with this projects financial foundation.  The front page of the Sun today reveals that the development was financed with currency swaps when the Loonies was flying high:

Just when you thought you’ve computed all the risks from the Olympic village crisis, here’s another. The $1.2-billion development has been financed using international “currency swaps,” one of the riskiest ways to borrow.

Read the full article here.

UPDATE: Mayor Robertson says the city is in process of negotiating a ‘much better deal‘ for the financing and doesn’t believe the city is at such a risk.

Over the last week or two on this site readers A1 and Macchiato have posted rumors that a local developer was getting ready to announce big price cuts to clear out unsold condo units..  According to the CBC it looks like those rumors may be coming true.  Developer Onni has 375 condo’s that aren’t selling and the CBC is reporting that they will be liquidating these units in a ‘dutch auction’, which could potentially set a new low price point for the thousands of condo units still to be completed over the next couple of years.

The CBC is reporting that Onni will be holding a media event on Thursday to announce details.  If you find a link to more information on this story, please post it in the comments section.

update: Lilypad posted a link to this PDF advertising the sale, it does not appear to be a ‘dutch auction’ as CBC radio reported, but the PDF does not include a lot of detail.  It does include the following as part of a FAQ:

Is it auction??
No. It is a bulk purchase. There is no extra contract work of any kind required.

What are the homes being discounted??
Aggressive speculators lined up overnight at launches to scoop up prime units and then could not flip them before completion. Many could not afford to complete and lost 15% deposits. Much of the available inventory is made up of these homes. They are 375 completed, fully warranted, brand new, never occupied homes featuring the latest finishings and amenities.

Where??
Spread over seven projects located across the Lower Mainland.

They also include the following comments on prices:

How inexpensive will they be??
These homes will sell under assessed values, current comparables and independent market appraisals at prices that get buyers very, very excited.

Why is the developer selling for such low prices??
These homes are standing inventory and costing the developer strata fees, property taxes, capital carrying cost and other costs. Also, many of these homes have been partially paid for by the abandoned deposits of speculators.