Geoff Meggs mad at minimal scrutiny of Olympic Village developer
Geoff Meggs calls the sprouting Olympic Village “terrific”. But the Vision Vancouver councillor has assailed the city's lack of scrutiny of the financial credentials of the three developers that bid to build it.
“That's astonishing to me,” Meggs said during a meeting of council's transportation and traffic committee on October 6, in response to city manager Penny Ballem's Olympic Village update. “Would we ever pick anyone again on that basis?”
Meggs told council he was particularly angry about what was revealed in the auditing firm KPMG's summary report on the Southeast False Creek development, which was released that day, following Ballem's presentation. The report states: “Detailed financial information was not included in the submissions from the three developers and, accordingly, there was a limited basis to assess financial ability.”
In a report to council in April 2006, Jody Andrews, the city's Southeast False Creek and Olympic Village project manager at the time, recommended Millennium Properties Ltd. over the other two bidders—Concord Pacific Ltd. and Wall Financial Corp. However, as KPMG stated in its report, the evaluation process had Millennium in third place before its offer of $193 million (now $200 million) for the Olympic Village site was factored in. But that did not guarantee financial viability, Meggs said.
“City staff, and certainly council, had no ability to determine that [financial] capacity, because that review wasn't done for any of the proponents, as far as I can tell from the KPMG report,” Meggs said in chambers.
In response to Meggs's comment, Ballem confirmed, “That was their [KPMG's] conclusion.”
Last summer, according to Ballem's presentation, Millennium's $750-million loan from Fortress Investment Group became “out of balance”, resulting in council authorizing up to $100 million in loans in an in-camera meeting in October 2008. The city bought out the loan in February of this year.
Coalition of Progressive Electors councillor David Cadman, chair of the transportation and traffic committee, echoed Meggs's concerns, calling the selection of Millennium in 2006 “the most expedited process I have ever seen”. Cadman said the previous Non-Partisan Association–dominated council could not scrutinize the bids of the other two developers unless they first rejected Millennium's bid.
“It was clear from the get-go that the majority of council had already made up their mind that the”¦$200-million cash price was the deciding factor in moving this forward,” Cadman told council. “I want to state that clearly, so that everyone understands it: we did not see the full details and simply had no indication that this was not yet financed.”