For many years, Robert Renger has been blowing the whistle on the City of Vancouver's real-estate dealings.
The City sells land on prepaid 99-year leases. Then it shows the increasing value of this land--after it is developed and converted into strata-title--as an asset on the balance sheet of the Property Endowment Fund.
It's a bit of financial hocus-pocus that makes the City appear to be in phenomenal shape, even though there is no way of recovering the value of that asset until the lease expires and the buildings have deteriorated.
Today, Renger wrote a letter to the two leading mayoral candidates--the NPA's Peter Ladner and Vision Vancouver's Gregor Robertson--challenging their recent assertions that the City's Property Endowment Fund can afford a $100-million loan to help complete the Olympic Village.
Here's a copy of the letter that Renger sent:
Dear Cllr Ladner and Mr. Robertson,
Both of you have been quoted in the newspaper as supporting the $100 million loan bailout for the Olympic Village on the basis that there’s lots of money in the Property Endowment Fund.
“Ladner said the fund is equipped to handle a loan of this size and he’s confident the city can make the loan without handing a crippling debt to Vancouver taxpayers.
His rival for the mayor’s seat, Gregor Robertson, agreed the loan should not pose a risk to the city because of solid land values that support the property endowment fund.”
I also heard a CBC journalist say today that the $100 million only represented about 5 percent of the assets of the Property Endowment Fund.
These statements are probably based on the City’s 2007 Financial Statements, which say that the land assets of the Property Endowment Fund are worth almost $2.5 billion.
I believe that this may be misleading, and that overvalued leased lands (including lands that the City has leased out for long prepaid terms) may account for a significant portion of this stated value.
I have made detailed complaints (which were ignored) about this issue in the past, which I am attaching and hope you will read.
I would ask Mr. Ladner, as Chair of the City’s Finance Committee, to tell the public how much of the $2.5 billion Property Endowment Fund’s assets is leased land.
I would also ask both of you, as the leading mayoral candidates, whether you are willing to commit to a proper independent evaluation of the City’s leased land assets after the election.