The New York Times – “The real estate development industry, unusually powerful in Vancouver, provided the city with an Olympic Village plan that ultimately was too good to be true.”… “What has Vancouver to offer other than its nice mountains and vastly overpriced real estate?”

Excerpts from ‘A $1 Billion Hangover From an Olympic Party’, by Ian Austen, New York Times, 24 Feb 2010 -

“O.K., are the Olympics worth it?” Mrs. Lombardi said while stopping for lunch at Murchie’s, a venerable tea and coffee shop. “I don’t want to be too negative because there’s good and bad, but I have to agree with my husband. All he can talk about is the debt. I’m worrying about what’s going to happen next.”

“Vancouver was always an odd choice to become the world’s winter sports capital for two weeks.”

“While it’s very hard to see all the costs, I think people are going to pay for it for a long time,” said Lee Fletcher. “Some people are going to benefit hugely, not the average guy. The average guy is going to see his taxes increase.”

The real estate development industry, which is unusually powerful in Vancouver, provided the city with an Olympic Village plan that seemed — and ultimately was — too good to be true. A development firm would finance and build the village on a desirable piece of city-owned land. After the Games, the developer would convert the accommodations into luxury condominiums and pay the city for the property. Vancouver would get its village and turn a profit as well. But cost overruns, combined with the credit crisis in 2008, destroyed the financing. Once in office, Mr. Robertson had to obtain special permission from the province to borrow $434 million to complete the village. In all, the city is responsible for about $1 billion in development costs, a situation that lowered its credit rating. If Vancouver’s real estate market remains strong, the city may recover most of that money. If not, Mr. Robertson said, “the city is on the hook for some hundreds of millions of dollars.”

Kennedy Stewart, a professor of public policy at Simon Fraser University in suburban Vancouver, remains unconvinced that showing potential investors a good time during the Olympics will resolve Vancouver’s long-term economic issues. The forestry industry, once the mainstay of its economy, has been devastated by a beetle infestation, the collapse of the housing market in the United States and competition from South America. While motion picture production companies and software developers have set up shop here in recent years, they lack the same economic impact. “What’s the substantive thing Vancouver has to offer other than its nice mountains and vastly overpriced real estate?” Professor Stewart asked. “The forestry industries have collapsed, so where is the money going to come from other than marijuana grow-ops?”

One response to “The New York Times – “The real estate development industry, unusually powerful in Vancouver, provided the city with an Olympic Village plan that ultimately was too good to be true.”… “What has Vancouver to offer other than its nice mountains and vastly overpriced real estate?”

  1. “If Vancouver’s real estate market remains strong, the city may recover most of that money.”

    This is pretty much a guarentee that the vancouver RE market will crash the day before these things go on the market.

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