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City’s delays created all the problems for Olympic village, says developer Macdonald

October 18th, 2010 · 10 Comments

A knowledgeable analysis of the Olympic village problems by developer Rob Macdonald in the Sun on the weekend. Although Rob doesn’t make it totally clear in the story, the original delay he’s talking about in the story was during the Larry Campbell administration.

If you can cast your mind back that far, you’ll recall that the city voted in favour of the Olympics in February 2003. The city was awarded the Games in July. There was a longstanding decision, not ever challenged by the new COPE council, that the city should build the athlete’s village. Presumably, once that July vote happened, the city should have kicked into high gear to get proposals from developers and get started.

But the RFP didn’t go until just before the election. It was issued so late that the new NPA council was abile to come in in 2005 and re-do the RFP, eliminating the requirement for affordable, middle-income housing to be one-third of the units.

I would add one comment to this. Many people have been critical of the city for imposing high standards on the village developers to build green, higher than any other development in town. But that requirement was set out in the city’s request for proposals: All developers knew, going in, that they would be asked to build a model sustainable project. So presumably that consideration would have been built into the money they offered for the land.

What drove up the costs and complexity, though, was the fact that those new green standards had to be designed and approved on an exceptionally short timeline.

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  • Roger Kemble

    Mr. McDonald’s take on OV is very interesting. However putting the blame solely in the lap the city is predictable from the President of the UDI and not, really, very helpful: OV is long past the blame game!

    I have had the pleasure of building large projects but none on this scale and complexity.

    We abandoned, for instance recently, a green roof, and indeed did not pursue a LEED rating although we followed its specs with regards the rain screen.

    No one can rightly assess the energy saving in the various technologies involved in “green” because we cannot trace the energy consumption thru moving equipment to the site or indeed the many and complex processes of manufacture from square one.

    I will continue to hold the opinion that LEED is more marketing than environment and hope the city will not abandon the social component and come to realize that almost 100% of building cost is the cost of money and act accordingly.

  • Roger Kemble

    PS . . .

    Apologies . . .

    . . . almost 100% of building cost is the cost of money . . .

    Obviously a mistaken exaggeration, nevertheless, arguably the largest component of any building budget.

  • Roger Kemble

    PPS . . .

    Perhaps the city and Millennium can get preferred interest rates, they are large and reliable consumers of borrowed money.

    But sub contractors must seek interim finance at a much, much higher scale and that does not show up until the final tally.

  • Morven

    It is easy to grasp at scope changes as a legal defense.

    But the question is not whether there were scope changes but whether the scope changes were properly authorized by our elected representatives.

    Much depends on the text of the contractual agreement.
    -30-

  • MB

    I have six assumptions:

    1. The construction cost of the district heating plant + distribution pipes, the community centre, and the seawall were funded from other city budgets and were not piggybacked onto the condo sticker prices.

    2. Typical design and construction delays and their associated costs were made far worse by an international financial crisis and the subsequent scramble to refinance the project by the public sector.

    3. The imposed requirements on this project by the Olympics during record years of development and construction all over Western Canada shared the suffering from a widespread labour + materials shortage, and therein higher costs.

    4. Going LEEDs did not add an abnormal boost to costs, and said costs will be repaid over and again during the next 100 years in savings in operating costs.

    5. The fact this is a waterfront development site in Vancouver will always mean higher prices.

    6. Politicos will largely ignore reason and blame the party in power or the opposition — though both had their fingers in the pie — for years to come.

    I have not read anything so far on this project that negates these assumptions, even when wading through the rhetoric.

  • scm

    gotta agree MB 5.

  • Ron

    On the second item – I recall reading that the City’s demand to hold title to the property throughout construction made it impossible to get conventional bank financing, since te developer did not have property to mortage. (forcing thed evloper to go to Fortress, largely because the developer didn’t do its due diligence as to the impact of the requirement on obtaining financing) i.e. try getting a home renovation loan if you are only renting the property.

    Not sure how much difference it would have made , but the article says the LEED standard was changed from LEED silver to LEED gold. And in the debate between Rennie and Busby the other day in Frances’ column, it was stated that it’s the incremental improvements after the initial efforts that cost the most (i.e. not getting to LEED silver, but improving on LEED silver to get to LEED gold).

    I think you can add to No. 5 that the developers were naive enough to offer an exhorbitant price for the waterfront property and the City jumped on it (who could blame them?) Newspapers headlined that it was the highest ever paid in the City and that neighbouring property owners (Wall, etc.) were celebrating an immediate jump in property value.

  • Ron

    Also, remeber that there was the whole dust-up – at the Urban Design Panel, was it? – when Millennium hired NYC architect Robert Stern (who had designed several other high end Millennium Projects in West Vancouver. He had envisaged a high end fishing village (likely with lots of limestone). The City freaked and demanded changes – it wanted a westcoast eco-design not pretentious high end design. i.e the environemtal features of the buildings could not be hidden – they needed to “look” eco-friendly, not just be eco-friendly.

    Here’s an excerpt from the Globe’s Lisa Rochon:

    http://www.lisarochon.com/writing2.8.html

    Iconic architecture can also come in small packages. And every commission in Vancouver needs to count. The design of the Olympic Athletes’ Village has been a process fraught with kingmakers, loads of money and the inappropriate selection of the original architect. The Millennium Group purchased the 2.5 hectare site for the otherworldly sum of $193 million. Its owners, the Vancouver brothers Peter and Shahram Malek, have produced a portfolio of Beaux-Arts wannabes in Burnaby, Vancouver and West Vancouver and it isn’t surprising that some of their buildings are designed by the American star of “modern traditionalism” Robert Stern who is also the dean of Yale University’s School of Architecture. Shahram Malek says they asked Stern to take on the design of the village’s signature building at Parcel 4 located directly on False Creek. Stern imagined, says Malek, a glass, modern building to fit within the small-scale of the masterplan. But, public perception was against Stern and his conservative architecture and Malek asked Stern to leave the commission in order to save the image of the Olympic Village. The profile of the village and its potential as an important statement about contemporary architecture was further damaged by Bob Rennie, Vancouver’s real estate agent extraordinaire and the marketing force behind Millennium Group’s village. He described the concept for the site as a “fishing village” – something, says Malek, that he regretted five seconds later. Now, Merrick Architecture and GBL Architecture is being put through the wringer to transform parts of the so-called fishing village into something that looks like it belongs to Vancouver. Two days ago, the architects submitted plans to the urban design review panel for a series of pavilion buildings with flat roofs that serve as heavily landscaped gardens. Things are looking up, says Scot Hein, head of the City of Vancouver’s urban design studio. “An innovative and exuberant architecture has replaced what was there before. The French classical fishing village has gone by the way side.” In fact, the city has approved rezoning of the site and most of the designs for individual lots have gone through design review panel and been approved.

    But, the struggle is far from over. Since Robert Stern gave up the commission in the fall, Arthur Erickson Architect has been hired to take over the site Stern was going to work on, as well as a community centre in joint venture with Walter Francl Architect. “It’s hectic,” says architect Nick Milkovich, the long-time partner of the legendary Arthur Erickson. “I’m worried that we can’t do justice to it and we’ll be designing as they are pouring foundations.” With Beasley, the city organized an environmental clean up of the site, which historically served not as a fishing village but as a place of industry and saw mill operations. An island in the shape of an egg, to be reached at low tide on foot, is being built. How to create sustainable water and energy infrastructure is being carefully studied. But, don’t ask for remarkable architecture – there’s no time for that. The city established the 6 – 13 storey massing of the Olympic Village long ago. And now drawings for development permits for Erickson’s residential complex need to be delivered in one week to the city. “There’s not much play there,” says Milkovich. “It’s so hectic that I don’t know if design adventure is part of the game. It’s just getting it done.”

  • Dan Cooper

    [ With apologies to Leonard Bernstein and Stephen Sondheim ]

    “Oh, Journalist Bula”
    (a.k.a. “The Blame Placing Song”)

    Dear kindly Frances Bula,
    You gotta understand,
    Some say a lack of moola
    Has messed up all our plans.
    Some say the City’s lazy,
    Some say the poor are drunk,
    Golly, Stanley, natcherly we’re sunk!

    ALL:
    It’s no good, it’s no good,
    It’s no earthly good,
    The Olympic Water’s no damn good!

    DIESEL:
    Oh, the trouble is they’re lazy!

    A-RAB:
    The trouble is they drink!

    BABY JOHN:
    It’s the pundits, who are crazy!

    A-RAB:
    It’s the economy, which stinks!

    BIG DEAL:
    It’s the “green” costs, that are growing!

    ACTION:
    It’s the prices, that have grown!

    ALL:
    Frances. we got troubles of our own!
    Oh, Journalist Bula,
    We’re down on our knees,

    RIF:
    We just can’t sell ‘dem fancy condos down by the sea.

    ALL:
    Oh, Journalist Bula
    What are we to do?
    Oh right, Journalist Bula,
    We’ll go tell you!

  • Mark Allerton

    @Ron #7 – you’re right about the problems with conventionally financing the development. McDonald mentions this in his piece as one of the factors, as has Michael Geller – and my own reading of the city’s memos suggests that this was indeed the case.

    One thing I didn’t see either McDonald or Geller mention was just how much Millenium was paying Fortress, apart from to say it was a lot – but I believe the figure was as high as 9%. And bear in mind that this was at a time of historically low interest rates.