Vancouver Olympics in 2010. Still Paying the Bill in 2020?

By 2020 Vancouverites could still be paying the bill for the 2010 Olympics. That possibility arose today when Gregor Robertson, Vancouver's new mayor, revealed that city taxpayers are on the hook for not just a mere $100 million loan for building the Olympic Village, but probably the cost of completing the whole project - estimated to cost $875 million.

The City of Vancouver's initial $100 million loan to secretly bail out Millennium Development Corp, the construction company behind the Olympic Village (before details were leaked), will be blown by the end of this month.

The project, down by the water on South False Creek, is still a building site crowded with cranes. The project's financial backers, hedge fund Fortress, have not been funding the Olympic Village since September. The only way it will come up with funding is with guarantees from the city of Vancouver for up to $875 million.

Some of the loan will eventually be recouped with the sale of the Olympic Village's 1100 condos when the circus leaves town (750 units are to be sold at market price with the rest being made up as social housing).

However, the contract for the village was negotiated and signed off as the property bubble was near its max and the profit estimates now look totally overblown.

The Olympics have always overrun (Montreal took 30 years to pay the bill for the 1976 Olympics), but in this instance the profligacy surrounding the five ring circus has been deeply exacerbated by the credit crunch.

Developers, and for that matter the City for approving the deal, saw the dollar signs and didn't properly consider what might happen if the real estate market turned. Although it's true plenty of others didn't see the market crash coming, a meltdown was a possibility many years ago.

The timing for Vancouver has been awful. The property market here has been falling since May and given that Canada is lagging the slow-down in the States in almost perfect lock-step, we will still be in the depths of the credit crunch after the 2010 Olympics.

While those who voted against the Olympics will be feeling vindicated in their view that it was all an unnecessary waste of taxpayers' money, we can't even enjoy a bit of schadenfreude since the whole city will be paying for it.

Think what could have been done with all that money that will fizzle out into the ether with the Olympic village project?