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Vancouver Olympics bill: $800 million, $578 m, $554 m, depending how you count

April 16th, 2010 · 10 Comments

Great media frenzy yesterday, as people rushed to put out the news about the city’s report on its Olympic costs. My version here, including former mayor Philip Owen’s assessment. Those in the know will remember he and his council insisted the city shouldn’t have to pay for anything.

But some wildly varying numbers were used (along with wildly varying analysis on whether it was all worth it or not), depending on what you decided to count as the total Olympic expense.

Some people used $729 — that was the total bill, according to the report, for everything the city did, but it got $175 million back in federal and provincial grants, plus private-sector payments (e.g. to put up pavilions at the live sites). The report put the final bill at $554 million. But that was counting in all kinds of things that the city was planning to do anyway, like fix up Granville Street and put in the public stuff in Southeast False Creek (seawall, bridges, manmade islands, district energy utility, etc.)

And the $554 didn’t include, strangely to my eye, the $24 million that Annette Klein in the budget office estimated was the staff time that went into planning the games for the past five years or into “volunteering” during the actual Games experience (a tab that is estimated at $2.5 million, not surprising when you have highly paid engineers and planners doing crowd control of pimply teenagers and crazed pin collectors at the live sites).

So what were the real Olympic costs, money that was spent that didn’t result in a new community centre or upgraded street or ice rink or all the other things that we will get to enjoy for the better part of a century.

I’d say all the operating costs — $30 million — plus the staff time — another $24 million, for sure. That’s $54 million. And then there’s an unquantifiable amount, the money that could have been saved if these new facilities weren’t being built for the Olympics. Vancouver did pay a premium to build at a time when construction costs were at an all-time high. And I’d be willing to bet money that there was a little bit of a premium paid because people wanted to make all the projects the best possible to show off for the Olympics.

On the other hand, the city also got a big chunk of money from the federal and provincial governments for several of the facilities plus $30 million for the social housing at the village. If you calculated the premium that the city paid for building in a frenzied period and deducted the contributions from other partners, would we come out about even? Hard to say.

As for $54 million in operating costs, was that a good expenditure to put on an event that made Vancouver look utterly fabulous to the rest of the world? I don’t have to tell you that opinion is divided out there.

But it seems like not a bad investment in comparison with some I’ve heard of. Did you hear that the B.C. government spent $17 million on an advertising deal with NBC during the Olympics that included getting the writers on the TV series The Office to put in a mention of Vancouver in one of the scripts? (Great find by Bob Mackin at 24 Hours on this.)

Okay, enough from me. Have at ‘er.

Categories: Uncategorized

  • RossK

    Gosh.

    If we spent $17 million, at least in part to get notice with Dunder-Mifflin, what did it cost Winnipeg.

    After all, that One Great City got an entire freaking episode.

    .

    .

  • Chris Keam

    The Simpsons did an Olympic episode with Marge and Homer on the curling team

    “It’s perfect Marge, you like sweeping and I like throwing things!”
    – Homer J. Simpson

    and the absolutely genius sight gags of a sign reading “Discouver Vancouver” and our welcome billboard: “Vancouver, come for the film tax credits, stay for the marijuana.”

    Anyone know if we paid for that too?

  • booge

    17Million. What a bunch of bozos. Vancouver is already well known.

  • Lewis N. Villegas

    Let’s keep it simple—it’s still early days—and use the first three numbers in your report, Frances:

    “Vancouver paid close to $600-million… But got $524-million worth of community centres, theatre improvements, street beautification and seawalls… In addition, it attracted $175-million from other governments and private businesses.”

    Somewhere in there, I take it, there is the costs of building city’s first subway line?

    There are two intangibles here. First, how much of that expenditure flowed to pay salaries of people that would have otherwise have started feeling the economic pinch of the recession? The magic of this Olympics was timing. It was going full board at exactly the time that governments needed to be “priming the pump” or putting capital back into the system.

    The second intangible is whether these investments will “shape the city”. Will new money choose to locate in and around the places that were built. Since tourism is a big part of our provincial economy, we also need to assess whether or not there will be positive spin offs in Whistler-Squamish, as well as here.

    I’m still not through assessing the quality of what we built. I can only speak about two areas with any kind of confidence: the transportation, and the “streets of Vancouver” during the games.

    The streets were a huge success—brimming with people—and a horrible failure—the urbanism was horribly mis-handled. People were there by the thousands… but there was nothing to do. You could drink in a bar or line up to ride the zip line over Robson Square, but there was no where to go. The Olympic Torch was most certainly not a destination because it was too far away to walk, and when you got there… same story. Nothing to do.

    Riding the Olympic Tram to Granville Island was good. Heading to Yaletown was a disappointment. The live site there was a long line up, and hoarded up so that nothing would spill into the street. There was a new median with trees on Pacific Avenue… shards of a shattered dream for a Great Street?

    The proof of the pudding is in the tasting. And nothing speaks to the mind-numbing approach to the public realm than the decimation of Robson Street (putting pay parking in Granville Island ranks right up there, too). Robsonstrasse, the one place we have that really works got a continuous barrier put up to direct traffic, and make it impossible to walk from one side of the street to the other as shoppers are wont to do.

    Robson Square was virtually annihilated by cheap plywood billboards signifying nothing. It was uncomfortable finding ones way to the skating rink where a mini Ice Capade felt like a small idea of what really should have been done on a much larger scale (cut backs?).

    The best thing were the Lantern Trees over by Georgia and Granville. They really did capture the essence of good urban design, and did it with materials and methods that could have come out of the metal work and woodworking shops of a large high school. These were markers and makers of place. You could tell a friend, “meet me by the trees” and you would find each other despite being in the midst of a throng.

    However, the truly amazing thing was the transportation. I recall my partner saying to me, “It’s just like if we were in Europe.” And it was. Transportation may well be the real legacy of the games. Both the people running the trains and the system performed miracles. We were indoctrinated into what transportation can really mean to our region.

    I recall a post right here, in the opening week, reporting that the commute into town had not been this good since the 1960’s. The target had been a 30% reduction in vehicular trips, and I remember 37% being reported as the number actually achieved.

  • michael geller

    “Transportation may well be the real legacy of the games. Both the people running the trains and the system performed miracles. We were indoctrinated into what transportation can really mean to our region.”

    Lewis, if only this was true. I note in today’s Vancouver Sun that the mayor had to tell a New York audience that after the Olympics “the numbers went pretty much back to normal when the Olympics ended”

    The article goes on: “When asked if he was disappointed by this, he diffused the question by saying he was still waiting on exact numbers….”

    Well I’m disappointed by this…I actually thought more people were using public transit as a result of the Olympics. If this is not true, I would like to think that Translink and the Mayor really ought to speak out on the matter. It would be a shame not to capitalize on the progress on this front.

    BUT MORE IMPORTANTLY, the staff report really confuses me, especially when some councillors want to turn it into a bit of a political football….”there was no budget control under the previous administration”.

    When I first read the report, I thought it seemed almost a bit mischievous.

    I would invite everyone to review this report http://vancouver.ca/ctyclerk/cclerk/20100420/documents/rr1.pdf and tell me that they agree that all the listed costs are truly ‘Olympic related’.

    For example, is it really appropriate to identify the $64.5 M spent on the renovation of the QE Theatre and Playhouse as part of ‘the Olympics Bill’? These are works that have been in the planning and design stage long before Vancouver was awarded the Olympics. There may have been an ‘incremental cost’ associated with accelerating the completion date, or building a certain feature, but these are not Olympic works.

    What I would find helpful is a breakdown of the expenses into different categories that clearly separate the one-time Olympic expenses that were incurred and will never be recovered or offset; as compared to expenditures on infrastructure which will be recovered from land sales, etc. (The Olympic SkyTrain station and SEFC shoreline walkway and District Energy system would fall into the latter category).

    I appreciate that there are some things where the cost might be split….Granville Mall upgrade comes to mind here…some costs were incurred just for the Olympics; others were incurred to improve the street for the coming decades (although I’m still very saddened by the decision to use plain ‘broom-finished’ concrete, rather than a more pedestrian friendly material down the centre of the street.)

    My interest in such a breakdown is to better understand how much really was spent on the games, how much was really spent on long-term legacies; and how much was invested in lands in anticipation of future recoveries.

    With respect to the latter, I was astounded at just how much appears to have been spent on the SEFC infrastructure….shoreline, parks, community facilities, etc. And how do the expenditures compare with the budgets? Unfortunately I do know some of the answers…many of these components went well over budget since the city thought it had sold the land to Millennium for such a high price a few ‘over-runs’ to improve the quality, etc. wouldn’t be the end of the world.

    Well, we may never see all that land payment. Indeed, some have told me we may not see any more of the land payment…indeed, some ‘black-hat people’ worry that we may not even get all of our ‘up to $969 M market loan’ back.

    If we don’t receive the full loan repayment and balance of the land payment, the Property Endowment Fund is going to take a terrible hit, with potential long term ramifications for the city’s credit rating and financial planning. It is for this reason that I am urging the Mayor and Council to be fiscally responsible when it comes to the future of the Olympic Village social housing. I know this will be a difficult political decision, but it is not a difficult financial decision. We should cut our losses.

    Further thoughts on the social housing, including a letter to the editor following Miro Cernetig’s recent column can be found on my blog at http://www.gellersworldtravel.blogspot.com

  • Urbanismo

    Michael, just checked out your blog . . .

    Quote: “Instead of renting the units at a loss, I believe the city should recover its costs by selling some or all of these units as ‘affordable ownership units’. I do not agree with Mr. Cernetig’s ‘real estate experts’ who claim the city cannot recover its costs through a sale.”

    “affordable units”! What is affordable? . . . and . . .

    ” Sadly, with all the focus on the homeless, far too many other households who are being priced out of the city are being ignored.”

    Two points:

    1. “Sadly, with all the focus on the homeless” yes, the much discussed 1,800 . . . yet IMO the even more socially destructive over hang is . . . 2. “many other households who are being priced out of the city” . . .

    CBC evening news last Wednesday showed, what is essentially a tear down, in the West End, recently sold at C$1M.

    G&M, yesterday, pointed out, house prices are rising exponentially yet family incomes have remain stagnant: surely, we have known this for some time. Still, G&M asks, is a bubble inflating?

    Mortgage rules have been ridiculous lax, NDP with 40 years to pay. Are occupiers (I hesitate to call them owners) vulnerable?

    No doubt, OV will eventually sell out. My question is, to whom?

    Is the Vancouver bubble being fed by offshore money with an ensuing distortion of that market not easy to fix!

    Are we about to see a pretty illuminated skyline with no one home to switch off the lights?

    We have pretty well eliminated our wealth creating industries and jobs. What next!

  • Urbanismo

    @ Booge oooops wrong blog . . . check Frances’ “City’s cultural services director takes a bow” post 11 . . .

  • Urbanismo

    @ booge . . . oh boy you got that right! ” Vancouver is already well known.”
    The city has been top destination for decades: no need for cultural dictators then, no need for splash-artist promo gurus now!
    Picture this: a bunch of Scarborough Rugby players imbibing our pre-game: Maria, thickly accented from Valencia (so she said) dispensing the . . . errrr . . . necessary emolument!
    And what do you thinq our conversation turned around, why beautiful, beautiful Vancouver, of course: the theme, oh boy, gliding under the Lions Gate in an elegant white Empress.
    That was 1951!
    No need to invent make-work or shed crocodile tears: no homeless, work was plentiful and well paying.
    We hadn’t shoved all our wealth off to those fetid sweatshops. We had money to spend usefully.
    No need then, either, to press our bushy tailed hallistas into money laundering enabling.
    Those poor sods working their butt off at SCARP never imagined they’d have to bow and scrape to a pack of smooth little men in expensive suits wantonly destroying perfectly serviceable Little Mountain housing stock. Or indeed enabling them into lying about “lagoons” or flashy lit-up luminous towers!
    Time to wake up. No need to waste any more treasure on bullshit!

  • morven

    The trouble as I see it, there is no equivalent of generally accepted Olympic accounting principles, so you can put in and leave out as much as you want. As a taxpayer, I find that alarming.

    Perhaps the direct, indirect and induced expenditure category of the economists might have some value.

    Where are the economists and their spreadsheets now that we need them?
    -30-

  • jon o’grady

    The city’s calculation of its Olympic costs also omits an ongoing cost directly attributable to the event.

    Over the long term, city wage agreements with municipal employees are generally in line with inflation. However in 2007, specifically to ensure labor peace for the Olympics, local city councils agreed to a five year, 18.8% (compounded) wage increase for city employees. This was 8.4% above the then projected compounded rate of inflation for the period (2% per year at the time).

    The annual payroll for the city was approximately $450 million in 2006 (excluding benefits). The 8.4% increase above inflation means that Vancouver taxpayers will pay an Olympic “labor peace” premium of $94 million during the life of the 2007-2011 CUPE contract and that they will be paying an Olympic tax premium of $37 million each year after 2011.