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The Athletes’ Village Meltdown: What We Know, What We Don’t

In November of 2002 with Vancouver’s Olympic bid gathering steam and a municipal election looming just two days later, the NPA-led city government signed an agreement with the Vancouver-Whistler 2010 Olympic Bid Corporation to provide for an Athletes’ Village if Vancouver won the 2010 Games. The 19 page document “with respect to an athletes village to be constructed in Vancouver for utilization during the 2010 Winter Olympic Games…” was signed by the City’s Director of Legal Services, Francie Connell and the Bid Corp’s Terry Wright. Just over six years later, the Village project –and with it the City of Vancouver – is in deep financial trouble with the end not clearly in sight. Three senior members of City staff have been fired or have resigned, at least in part because of the fallout from the project. The recent trouncing of the 2005-2008 NPA-dominated city government is almost certainly a direct consequence of the events that have unfolded since the City selected a fairly obscure company, Millennium, as the Village’s developer.

How did Vancouver get where it is today and what do we know about the project’s history? In equal measure, what don’t we still know?

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The following is what we do know. Two days after signing the agreement, the NPA civic government was out of power and a new COPE-led council and mayor was now in control. The new council had been promoting a future model for the Village that would include a mix of market, non-market, and subsidized housing. In part, the pro-bid members of COPE used this notion to convince Vancouverites that voting ‘yes’ in the Olympic plebiscite was the socially responsible thing to do and a win-win: Olympic glory and social housing to go with it. Vancouver won the bid for the 2010 Games in July 2003, but the project lay dormant until 2005. In November 2005, the NPA swept back into power at City Hall, easily pushing aside a fractured COPE and the schismatic offshoot, Vision Vancouver. In the Summer of 2005, the city issued a RFP for the construction of the Athletes’ Village. Five companies originally applied: Concord Pacific, Wall Financial, and Concert Properties being the big, well-known players. The problem for Concert was that its Chairman, Jack Poole, was also Chairman of VANOC. Poole had promised back in 2003 that Concert wouldn’t be bidding on any Olympic venues. VANOC and the City denied any conflict of interest, but media scrutiny led the provincial government to tell Concert to step aside. Two smaller companies were also in the running: Windmill and Millennium. In April 2006, the City announced the winner: Millennium. The director of the Southeast False Creek Development Project which included the Olympic Village, Jody Andrews, described the success of Millennium as being due to the overall concept and design of the Village, but mostly because Millennium had offered the City about $20 million more than the next closest rival.

The actual contract between Millennium and the City was kept under wraps until October 2006 when a Freedom of Information request by the Work Less Party brought it to light. A search of corporate records in British Columbia showed that Millennium (Properties and Development) had created a new entity for the Village project: Millennium OV in July 2006. Shortly thereafter, the name changed again, this time to Millennium Southeast False Creek Developments. The corporate search also showed that Millennium was part of something called the Armeco Group, one of whose members was Armeco Construction based in Vancouver. Both Millennium and Armeco Construction were headquartered in the Province Building at the corner of Hastings and Cambie in downtown Vancouver. The directors of Millennium are brothers Peter and Shahram Malek (sometimes given as Malekyazdi). Both had been previous directors of Armeco Construction when it was first incorporated in 1981. Armeco Construction’s sole director in 2006 was Paul S.O. Barbeau, a business lawyer and, until January 2006, the president of the ruling NPA.

The deal with Millennium was complex, but potentially hugely lucrative for the company and potentially for the City: Millennium would pay the City of Vancouver a total of $193 million for the land in question. This land parcel, called 2A by the City, was only one of three parcels that the City hoped to develop by 2020. 2A would be the site of the Village. Millennium was required to put 15% as down payment immediately, approximately $29 million. After the Games had come and gone, Millennium would take actual possession of the Village and at that time pay the remainder of the $193 million. The company would own 850 of the 1,100 units in the Village, the City 250 units. Millennium was free to pre-sell its units into a booming real estate market. The City would pay Millennium $82.5 million as the units for the City were built. In addition, the City would provide at its own costs virtually all the site preparations. These included removing contaminated soil, paying for sewers, hydro and electric, building all roads and sidewalks, and providing street lights. The removal of contaminated soil included the other parcels the City hoped to develop in the future, but the City did not separate the costs for 2A from the others. As additional site remediation costs, the City would provide enclosures to protect False Creek and fish from runoff from the work site. It would also pay insurance costs. The total site preparations bill to the City would ultimately exceed $159 million. The City also committed to providing funds for more workers and equipment in case of “unexpected delays” to the project.
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