$29 million to build, $40 million to repair.

More depressing news on the local leaky condo front, this hot on the heels of the federal governments announcement that it is dropping its election promise to review culpability for the Lower mainlands leaky condo crisis:

“Owners in a leaky condominium project that cost $29 million to build in 1994 may now have to pony up a total of $40 million to keep the buildings standing.

The City of Vancouver ordered Gardenia Villa, at the corner of Nanaimo and East Broadway, to get an engineer’s report after an inspection showed various parts of the complex were at risk of failing structurally. The city also ordered immediate shoring to one of the buildings in the complex because of imminent danger.

Normally, it’s the strata council that decides to get an engineering report done and the city doesn’t get involved until there is an application for a building permit to do the work, Vancouver’s chief building official, Dave Jackson, said in an interview. But in this case, some of the owners complained to the city that maintenance wasn’t being done.

Following an inspection, the city was concerned that the building “might be damaged to the point where something might fall,” Jackson said. In its order, the city also referred to “water … leaking out of structures in several locations and … algae growing extensively on the building’s exterior stucco.”

If all repairs are done to this building it will end up costing an average of $160,000 per unit, an astounding figure considering that some of the units were originally purchased for much less than that amount.

“Options the owners will be considering today, according to a notice of the meeting, include doing nothing, proceeding with the repairs, suing the parties who designed and built Gardenia Villa, and dissolving the strata corporation and selling the land.

But legal action against the developer may prove difficult as Maple Resource Investments was dissolved in 2003 for not filing annual reports. And Jackson said doing nothing was also not an option. “Ultimately, we expect them to do the repairs and if they don’t, we would eventually order them to,” Jackson said.

Once the strata does the repairs, the city will require letters from structural engineers to ensure it has taken care of the safety issues related to the structure, Jackson said. The city will also need letters from envelope specialists that repairs meet minimum standards of the Vancouver building code.

Tony Gioventu, executive director of the Condominium Home Owners’ Association would not talk specifically about the Gardenia Villa project. However, he did say other projects with large assessments have been able to spread the repairs over a number of years, “which eases the financial burden on the owners.”

Full article in todays Vancouver Sun.

How much will the olympics cost BC?

Astute reader Suavek just sent in the link to this story – It seems that the 2010 winter olympics are going to cost just a teensy bit more than originaly estimated. It turns out the cost will be around $1,000,000,000 more than the BC government previously indicated. For the number illiterate thats ONE BILLION DOLLARS more.

The BC auditor general just released a report that the true total cost of hosting the olympics is estimated at $2.5 billion dollars, $1.5 billion of which will come from the province. By not counting the actual cost of building all of our projects for the olympics the BC government had previously insisted that the total cost to BC would be no more than $600 million.

B.C. Economic Development Minister Colin Hansen took issue with van Iersel’s findings, arguing that the Sea-to-Sky Highway would have been improved anyway, and should not be considered an Olympics-related cost.

”Sure there’s lots of things that the government is doing that we are wrapping an Olympic flag on,” he said. ”But those are programs that are not part and parcel of us living up to our obligations for the staging of the Olympics.”

The Auditors report says “given the province has the ultimate responsibility for the financial outcome of the Games, we feel there should be regular and complete reporting of the total Games costs to the taxpayers. To date, the province has only reported to taxpayers on the $600 million envelope it has established; however, there are many other Games related cost that are not being reported as such by the province.”

The 65-page report also highlights significant problems with the management and marketing of the Olympics, and warns that costs could go even higher. Van Iersel found, for instance, that the province lost $150 million in projected revenue from broadcasting and international sponsorships by failing to adopt a routine ”hedging strategy” that would have protected them against fluctuations in the dollar.

He found, too, that the government will have to wait six years longer than expected to launch a marketing campaign, because it didn’t realize the International Olympic Committee restricts such campaigns until the previous Olympics are over. B.C. had planned to start its campaign in 2003, but now will have to postpone it until after the 2008 Olympic Summer Games in Beijing. Van Iersel said the delay could hurt the provinces plan to reap $4 billion in economic spin-offs.

The auditor’s report also notes that the Vancouver Organizing Committee (VANOC) has transferred construction risks for many of the venues to other partners. But if rising costs make it impossible for those partners to finish the job, ”there is a risk the province will have to contribute more funding to VANOC to get the projects completed,” the report says.

The province has set aside $76 million for such unexpected costs, but the auditor general also questions whether that emergency fund will be enough.

I think we all know how the BC government can GUARANTEE that they’ll have plenty of money to cover any unforseen costs: Invest in real-estate!

Review of leaky condo crisis dropped

The government has decided not to follow through on its election platform promise to review the leaky condo crisis in the lower mainland and CMHCs involvement and responsibility in said crisis. This story from todays Vancouver Sun:

“The Conservative government has shelved its election promise to conduct a review into a federal agency’s role and potential culpability in B.C.’s $1.5-billion leaky condo crisis, according to a letter sent by Human Resources Minister Diane Finley to a homeowners’ group.”

The promise to review CMHCs responsibility in Vancouvers leaky condo crisis was made by Stephen Harper when he visited Victoria in December. They now claim that promise can not be fulfilled because of court actions launched against CMHC.

According to internal documents CMHC was aware in the early 1980s that new federal building regulations could lead to severe damage to homes in coastal areas

“As I’m sure you can appreciate, it would not be appropriate for me to comment or to consider initiating a review into leaky condo issues while these matters are before the courts,” Finley wrote to Consumer Advocacy and Support for Homeowners (CASH), a consumer advocacy group that is seeking compensation for the thousands of B.C. residents whose homes and property values were devastated by moisture damage.

CASH president Carmen Maretic, in a letter sent Wednesday to Harper and Finley, said the Tories “knew or should have known” at the time of the campaign promise about a lawsuit filed against CMHC in B.C. on Dec. 6, 2005.

Critics have also noted that CMHC has been named in more than 30 other lawsuits. Former Liberal housing minister Joe Fontana and former Liberal industry minister David Emerson, now Tory trade minister, stated publicly in mid-2005 that the government couldn’t comment on CMHC’s role in the crisis because the issue was before the courts.

That didn’t stop Harper from including a promise to “review CMHC’s handling of construction regulations and ‘leaky condos.'” in his “Stand up for B.C.” election speech on Dec. 17th.

A press release accompanying the platform boasted that Conservative MPs “understand and have advanced the interests in British Columbia” on several fronts, such as pressing CMHC “to investigate how it failed to warn homeowners about potential problems with ‘leaky condos.'”

In an exclusive interview with The Vancouver Sun after the announcement, Harper said he’d consider compensation for condo owners following the review.

Here’s the full story.

Vacation Condos get really expensive.

You know that quarter share vacation condo you were going to buy as an investment? It looks like its going to get a whole lot more expensive. Owners are finding their property taxes doubling or tripling after they buy when the property classifications get changed from residential to business. From the Vancouver Sun article:

“Taxes on one vacation unit in a Vancouver Island resort jumped from $3,800 to $15,200 when BC Assessment changed its classification from residential to business in a shift that is hitting resort properties around the province.

At Pender Island’s Poets Cove resort in the Gulf Islands, strata fees including taxes tack on almost $1,100 a month to the cost of a quarter share in a townhouse that is listed for sale at $229,000 for 12 weeks of occupancy a year.

Some buyers are signing up for fractional ownership in vacation homes only to find long after the deal is sealed that the residential tax rate has given way to business and their costs are much higher than they expected.

The poets cove example floored me – $1,100 a month in taxes and strata fees for a place you can only stay in 4 months of the year?! Naturally there is an uproar over this classification shift:

“Developers and property owners are appealing the assessments but the regulations are against them. A group of Whistler owners, the Legends Owners Association, lost an appeal on the issue in 2005 in a decision that resonated throughout the industry.

“That Legends case at Whistler has set the tone in the property tax matter,” said Phil Leseur, vice-president corporate and legal affairs at Bear Mountain, a destination resort in Victoria.

“The judge said if it looks like a hotel, smells like a hotel, is being operated as a hotel, it’s taxed as a hotel.”

Bear Mountain was successful in appealing one year that saw taxes on its quarter-share units hiked to a business classification, but Leseur said the company is still appealing that classification for another year and there is no guarantee what will happen with upcoming tax years.”