Vancouver's Olympic Village likely brought down NPA: Wikileaks U.S. embassy cable
The U.S. Consulate in Vancouver credited the Olympic Village’s financial woes with Vision Vancouver’s November 2008 win over the NPA, the latest Wikileaks cables reveal.
Vancouver mayor Gregor Robertson defeated the NPA’s Peter Ladner while riding on a public backlash against the latter party’s perceived mishandling of the Olympic Village’s financing.
The consulate cable, dated February 12, 2009, is part of a larger database of some 250,000 classified U.S. communications leaked to the Guardian and a small number of other media outlets by the whistleblower website Wikileaks.
The Vancouver consulate dispatch made public today by the Guardian focused on the 2010 Winter Olympics and the financial difficulties Vanoc faced preparing for the Games in the wake of the global financial crisis.
“Because of the economic downturn, the Vancouver Olympics Committee (VANOC) has already announced modest changes to save money, but is still promising to stage spectacular Games - within available financial resources,” the cable states.
The author noted that optimism over the Games “remains strong”, and that Vanoc was showing “remarkable financial astuteness”.
The cable then goes on to describe in detail the problem that the Olympic Village had become. That section reads in full:
4. (U) The same cannot be said for the C$700 million-plus Olympic Village, a key element of the Games and a major responsibility of the City of Vancouver. The Village is being developed by a private corporation on prime waterfront land provided by the city. It's slated to become a mixed use residential/commercial area after the Games with high, middle and low-income housing. The developer ran into problems in September, when more than C$100 million in cost overruns threatened to stop the project. Then Mayor Sam Sullivan and the City Council held a series of closed door meetings where they developed a plan for the city to provide guarantees so a loan could be obtained to cover the increases. The secretiveness of the financial arrangements became a major factor in the December city elections, which saw Sullivan's coalition lose the mayoral seat and all but one city council position. In addition, the controversy caused the city manager, a senior deputy and the chief financial officer to lose their jobs. In December, just after the elections, the primary financial backer of the project, U.S. company Fortress Investment Group, announced it would not deliver the final C$458 million in capital to complete the project due to financial losses from the sub-prime mortgage crisis. The new mayor, Gregor Robertson, found himself in the same hot seat, dealing with the possible collapse of the project. In the end, he sought, and was granted, special provincial legislative authority for the city to seek loans to cover completion of the project. Olympic critics have had a field day with the problems, promoting stories of taxpayer losses in the billions, and a combination of substantive factors led Moody's and Standard & Poor to place the City of Vancouver on credit-watch status. Real estate analysts have been more optimistic, asserting that the city could make a considerable profit on the deal down the road and highlighting the fact that it is the last undeveloped piece of waterfront property in downtown and very desirable. The city paid only C$50 million for the land through its Property Endowment Fund, a longterm investment fund estimated to be worth almost C$3 billion. Even if the development makes only half of the originally estimated profit, the fund could cover the immediate loss without affecting the city operation's budget and, as a longterm investment, it could still be a win for the city. VANOC's Guscott was confident the city would meet its part of the deal, presenting a completed, functioning Village on time. In VANOC's view the project has been caught in an unfortunate cross between municipal elections and the downturn in the economy, with the financial problems severely overblown.
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