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City takes out Fortress loan

February 18th, 2009 · 8 Comments

Here’s the latest from city hall, from those of you not already in the loop from the twitterings, blogs, news flashes and what all emanating from the media horde there. More later on some of the interesting Q and A at the council meeting, but I’m at work on other projects right now.

STATEMENT FROM MAYOR GREGOR ROBERTSON

For the first time since taking office ten weeks ago, we are finally able to share some good news with the taxpayers of Vancouver on the financing of the Olympic Village project.

I am glad to say that, at 10 a.m. today, we have new options to complete the Olympic Village project. We have bought out Fortress financing with minimal prepayment penalties and we are now pursuing more competitive, advantageous terms for the project. These steps are estimated to save Vancouver taxpayers about $90 million in interest payments.

Very importantly, this change allows us to put our focus for this project where it belongs-getting the site ready to turn over to VANOC and become the Athlete’s Village for the 2010 Games.

It also gives us the flexibility to negotiate better terms after the Olympics, coming closer to ensuring that the taxpayers of Vancouver reap the benefits of this investment.

We have gone from an agreement that was clearly not in the interests of taxpayers, to an agreement that puts Vancouver’s taxpayers first.

I’m standing here today to announce this good news in keeping with my commitment to full public accountability-a commitment to telling the people of Vancouver about our decisions as we make them-not well after the fact.

I want to commend the City Manager and staff for their work to get us to this point, and express my gratitude to our legal and financial team. I also want to thank our partners at VANOC and the BC legislature for their crucial support.

All of these people have proven how talented and determined Vancouverites can be when the stakes are high for our city.

So, what does this mean for Vancouver? It means no completion guarantee to Fortress. It means no financial guarantees to Fortress. It means we negotiated a great deal for taxpayers to save about $90 million so far.

And it means we are now in control – that we have the flexibility we need to achieve the best return on investment for the people of Vancouver.

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  • foo

    no completion guarantee => no need to finish the project exactly as specified => bye-bye social housing.

  • Glissando Remmy

    Hi Frances thanks for the news!
    There you go again, the spin is back in.
    Fortress is probably jumping up and down in delight licking their wounded chops and grateful to Vancouver gurus for bailing them out of this mess. Well done!
    So it seems now that the City has found the money to cover the “soaring” costs of the social housing element (if I am to believe that we the taxpayers are going to save $90 million on interest payments).
    The IOC Gods are going to compensate handsomely the Mayor and his Council for promising again the delivery of the Olympic village to VANOC no matter what. I still keep saying that the only dumb developer left in the City of Vancouver right now is the City of Vancouver and as per my yesterday’s post on the “Social housing at Olympic village soars to almost double original cost” I’ll end by saying that we live in Vancouver and this keeps us all busy!

  • Joseph Jones

    City takes out Fortress loan

    Inadvertent double entendre? Now who owes who what?

  • fbula

    Foo,

    I haven’t checked on this specifically, but I believe the Fortress completion guarantee only extended to finishing the market condos as originally envisioned. Fortress was not lending the money for the social housing, so would have no say over that.

  • notunning for mayor

    That’s correct fbula. The city isn’t saving any money on this new deal, Millenium will be. The city would only see a savings if the project fails in which case the city would lose $90Million less then if the refinancing didn’t happen. But according to most recent reports the project is still on track to bring in a profit, so the real winners here will be Millenium. To be honest this is the way this project and most P3 should go right off the bat, have the government borrow the money at better rates and then lend it back to private partner while skiming a poing or two off the interest.

  • hohoho

    Robertson & Co. initially said that “taxpayers are on the hook for the entire amount,” so, how does this change things? Looks like we really are on the hook for all of it after this deal!

  • RossK

    hohoho–

    How does it change things?

    Well, if it is, indeed, as reported, we will no longer be forced to pay a billion over prime to the Hedgie-Boys.

    So.

    Perhaps the time has come to ask ourselves a question or three.

    What if the former council and manager had, indeed, managed to keep this quiet……..

    Where would we be now?

    Or, even more importantly, a year from now?

    .

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