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Olympic village bills keep piling up for city of Vancouver

June 16th, 2009 · 33 Comments

Sorry, I’m a bit behind on posting this, but here’s the story Rod Mickleburgh and I had in the Globe today on the mounting bills for Southeast False Creek. This comes from city manager Penny Ballem’s report that came out late Monday, where she tried to round up the total costs for all the city parts of the development (as opposed to the $750-million loan that the city is giving Millennium Development Corp. to finish off the private-condo project).

You’ll notice that numbers on the total bill differ in different stories out there in media land. That’s partly because it’s still difficult for all of us (and even city staff, I think) to figure out all the different related costs, what the original estimates were, and what the current bill is. (The $15 million extra needed for the social housing, whose cost jumped from $95 to $110 million, was actually outlined in a previous report, for example.)

What people should remember is that some of the money being spent by the city may look as though it’s Olympics-related. However, the city had always planned to develop that big parcel of land in SEFC, and that always meant it was going to have to spend some money on providing all kinds of things for the area: roads, clean-up, walkways, community services.

The question that we still don’t have an answer to is how much extra got spent to make it really, really nice for the Olympics, to be a showcase for Vancouver, and how much would have been spent in any case. I’d love to hear from city staff on this, using whatever names you wish, but it does feel at times like one of those reno projects that got out of hand.

Sure, let’s put on the fancy door handles and, since we’re spending money anyway, let’s tear out the main floor bathroom, etc etc.

(By the way, for those of you who think there’s something wrong with me that I would be filing on this story while travelling in Europe, two answers: 1. I’ve been pursuing this part of the SEFC spending for quite a while and had hoped to be able to file on it before I left. As it turned out, the answers came a few days after I left, but the story was too interesting to drop just because I was thousands of miles away. 2. It’s kind of fun to file stories while on the road. I interviewed Penny Ballem and wrote this while sitting in a small bar in Yrieux, near Limoges, which had the only working Internet connection in town and a friendly bar owner.)

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  • The NPA has been out of office for eight months now, almost an entire year. Yet we’ve seen the costs for the Salt House project, as just one example, double on Vision’s watch.

    Now it’s true that the NPA was in control the previous three years when some of those decisions were set in motion, but it’s also true that the current team was in charge the term before that when the most consequential decisions affecting Olympic costs were set in stone. Geoff Meggs knows, because he was part of the administration that larded that project up with requirements that led to those overruns.

    So, for Councillor Meggs and Dr. Ballem to turn around now and blame the previous council for cost overruns that have only appeared during Vision’s rule is risible. If they want to blame those who came before, they should be looking in the mirror …

    I also wonder gow much of the overrun can be attributed to the loss of Jody Andrews – one of the best project managers in the city who was forced out by Ballem in a very ham-handed manner.

    If, as Geoff Meggs says, it’s a lack of oversight that’s to blame for these outrageous overruns, it’s this council that’s to blame. Perhaps the good councillor should spend less time politicizing the Olympics and more time managing the city’s finances – the constant partisan sniping over the Olympics is starting to turn people off to the Games themselves.

    I also take exception to allowing Meggs to slam the NPA without any balancing opinion or quote. It’s a disappointment from Frances Bula, who usually manages this balancing act a little better.

  • LP

    So Meggs gets to be the ass yet again, while the mayor gets to hide in the background.

    I guess the handlers are doing their best to repair or contain the damage which occurs everytime he opens his mouth.

    Meggs was as much to blame for all of this from his stint “up Larry’s arse”, as Sam and his cohorts are from 2005-2008.

    As for getting a quote from the NPA, the only one left is Suzanne and frankly what would be the point in that?

  • You are a sick, sick person Frances 😉 Filing stories on vacation! Whoever in the world would do that? Well, except for me on June 12, 2006.

  • Inside the building

    For anyone to say that the cost of the Salt building doubled on Vision’s watch is laughable, and shows how little you know about the project’s development. The reason those costs are coming out is because we finally have a council and management team willing to ask the questions! Of if only we kept it secret like Peter wanted, then everything would be fine.

    And how on earth is the project office overbudget?! It’s been out of money since last year! What on earth was going on?

  • rebecca

    I agree with Sean’s comments. Meggs has got to learn to stop politicizing this issue. Can someone pls send him to media school to learn how to speak in public! Another Vision crony putting down staff. Yes I read his comments as a slap in the face to project office staff, commenting about gross mismanagement. I have walked along the construction site and new waterfront…beautiful! If any of you haven’t been down there, go see for yourself. Kudos project office.

  • A big expense is the non-negotiable deadline.

    The longer Meggs politicizes Millenium the more cynical the public becomes with current council. It’s already started. I would take the high road and move on if I were in his shoes. I don’t see any way to keep the Millenium story alive for another 2 1/2 years.

  • spartikus

    the constant partisan sniping over the Olympics is starting to turn people off to the Games themselves.

    the constant partisan sniping over the [Iraq War] is starting to turn people off [to war itself].

    Changed to make the point that mindless cheerleading of X does not guarantee the success of X or in fact the inherent soundness of X. Many people around the world are beginning to question the value of the Olympic Games as they are currently run.

    What you call “partisan bickering” other people call “democracy”.

  • “the constant partisan sniping over the Olympics is starting to turn people off to the Games themselves.”

    And here I thought it was the ballooning costs, massive disruption to every day life, and questionable economic benefits of a party for those who like to slide down snowy hills… while kids go to school in buildings that will turn to dust and rubble at the first sign of an earthquake (to cite one slightly higher priority IMO) that had folks a mite ticked off. Live and learn I guess. 🙂

  • Gassy Jack’s Ghost

    I hate to point out the obvious, but Sean’s whole post sounds an awful lot like, well, partisan sniping.

    BTW, Dec to June equals just over six months in office for Vision, not “almost an entire year” (insert snipe about NPA math whizzes being in charge during the contract negotiations phase, and how it is no wonder there are big problems with overruns now…).

    And in their first six months at the helm, Vision has had to deal with a shit storm of pressing issues, all with Vanoc holding a gun to their heads. In contrast, the NPA floated on a massive bubble of economic prosperity for 3 years and chose to do nothing to deal with any of our major social problems, which were hitting crisis points right around last December when Vision took over. And yet, Vision has somehow managed to take more direct action on homelessness and affordable housing in the past six months than the NPA has in the last 25 years. Reports of more overruns aren’t good news, but it does demonstrate some semblance of transparency is finally returning to the Hall, compared to the backroom cloak and dagger fiascos epitomized in the last days of the NPA and Rogers. The new Council is at least showing some political will to do the right thing and work hard on behalf of the citizens it represents, rather than the moneyed interests the NPA has always been beholden to.

    So give the partisan sniping a rest, it’s turning me off the Games, yo!

  • spartikus

    From the CBC version of the story:

    The report quotes, “escalating construction prices, change orders related to incomplete tender drawings and anticipated BC Housing financing costs.”

    Could someone in the know explain “incomplete tender” drawings? That sounds like, er, they started this thing without actual, er, blueprints. Is that common??

  • spartikus

    Hmmmm….

    The set of tender drawings should provide all the details of proposed works that are required by the contract , however this is always not practicable owing to many reasons . One of the main reasons is that when time is of an essence , the client may want to commence the project within short time such that the client’s engineer in fact does not have sufficient time to finish up the detailed design , and sometimes even working concurrently after the work is commenced .

    Nevertheless the incomplete tender drawings will most likely influence the preparation , execution and cost of work which in turn will consequently affect the tendered price . Failure to provide sufficient and correct information in the tender drawings will unavoidably lead to follow up disputes and claims

  • gmgw

    “The constant partisan sniping over the Olympics is starting to turn people off to the Games themselves…”

    Would it were true!!! Excuuse me while I barely suppress a mighty guffaw. To me, this sublimely fatuous statement is equivalent to saying “Man, all this negative stuff I’m hearing about stomach cancer is starting to make me feel kind of unhappy about having it”.

    Speaking as one who has been unalterably opposed to the Vancouver Olympics since the very first indication that a bid was being put together, I think I’ll allow myself just a touch of smugness at evidently being so far ahead of the curve.

    Who knows; if this trend continues, maybe soon I’ll be able to wear my “Health Care, Not Olympics” button in public without fear of being either beaten up by rabid Olympics supporters, or taken in by the authorities for questioning as a potential subversive.
    gmgw

  • Frothingham

    gmgw … you are not alone in being ahead of the curve. I recall a conversation with three sharp business types and two architects, who 4 months BEFORE the Olympic village started ,said that it would come to a bad end. They all said “don’t buy there, it will be over-priced and the quality is going to be suspect. … too much, too fast”, with lots of downsides. And a majority of them said the spin-off from this short-lived “Party” was going to be minimal ( except for the “In” people and that the headaches for the taxpayers was going to be long-term at some pain to wallets.

    looks like they were dead-on.

  • Not running for mayor

    It’s not unsual to start work before drawings are complete, in fact the convention centre was done the same way. Yes it almost always leads to cost overruns, but sometimes it needs to be done anyways to meet deadlines.

    The issue was never Healthcare or Olympics, it was Olympics or no Olympics, to suggest we would’ve received that sponspership or federal money towards anything else is a little naive.

    That said we need to be prudent about our spending, and maximize our bang for our buck, we will be left with no white elephants after the games, perhaps a couple of white goats but no elephants. We should be thankfully.

  • Don Buchanan

    A quick anecdote from the other side of the Olympic fence. I had the opportunity to hang out with a couple of Olympians the other day and their perspective was illuminating. These two were part of the Canadian Men’s Eight rowing team that won Gold in Beijing last summer. It was after my “recreational” row at the Vancouver Rowing Club that I joined them at the bar. They’d been there a while already…

    These “Olympic Champions” (their term, not mine) couldn’t say enough about their positive experience, and the possibilities that Vancouver will offer the winter athletes. That part I couldn’t contest, and I don’t think anyone really could. Yes the experience will be stelar for the athletes and the whole “Olympic Family”.

    Where we diverged was on what societal values were more important. I see that as a microcosm of some of the discussions on here. So one person thinks amateur sport deserves to be higher on the priority ladder than the next person. What I found was that we had to agree to disagree – our values were different. Food for thought.

  • independent mind

    It is a bit much to blame Geoff Meggs for being the bearer of bad news. At this point all that is left is to pay the bills.

    What is really unfortunate is that the previous NPA council disbanded the council oversight committee on the Olympic Village and left staff to make the decisions.

  • Penny Bellam may be a financial genius but I’d rather she stayed with her Hippocratic oath.

    We cannot blame her, though, for the pending Olympic Village train wreck but it’s going to tax her wily talents.

    Forget green shoots, we are in for one hell of a ride:

    http://www.globalresearch.ca/index.php?context=va&aid=14005

    Our neighbour and major trading partner to the south is about to tank and we wont far behind.

    Doubtful the city will break even: more likely suffer a deep trough for years after the ridiculous two week of partying is over . . .

    Only the VANOC crowd are going to come out of this . . .

    So, forget the carping: we wont want to remember our canny Scot’s name after all this shakes out . . .

  • “What is really unfortunate is that the previous NPA council disbanded the council oversight committee on the Olympic Village and left staff to make the decisions.”

    OK, let’s get real here. I know more than I really want to know about what has been happening in the design, procurement, management and construction of the Olympic Village.

    And yes, as a former NPA council candidate, I am probably somewhat partisan as well. (Although I try to remain truly non-partisan.)

    To ‘independent mind’ I must point out that it wasn’t an 11 person NPA council that made all the decisions relating to the Olympic Village. It was a 6-5 Council. Furthermore, as others have pointed out, significant decisions were made by previous councils, including those related to the project’s ‘greeness’ and the legal structure which created so many of the financing challenges.

    The project was a mess on November 15, and city staff and Council are trying to do their best to sort it out. And I hope they can.

    And that’s why I get really pissed off when I hear Geoff Meggs, who is a very smart guy, continue to criticize the NPA members of the last council for this situation. Geoff, you ought to know that the real blame does not lie with personal decisions made by Sullivan, or Capri or BC Lee or Ladner or Anton or Ball.

    As one of your colleagues said to me when the shit started to hit the fan about the Olympic Village situation. “Hey, I’m just a biologist! What did I know?”

    And that’s the reality. Most councillors know very little about the intricacies of a major real estate planning and development transaction. They have to rely on city staff to know the facts, and tell them the facts. This wasn’t the case, until it was too late.

    So please, to Geoff and others, let’s try and sort this thing out. But let’s not keep blaming one party or another. Councillors from all three parties were involved in making what they thought at the time were good decisions. None wanted to deliberately waste taxpayers money, or demand that the wrong designs be carried out.

    But very, very few of the politicians really knew what was going on. They relied on staff, community advisory committee members, and the public. Yes, they should have brought in more outside experts, but they didn’t. Nor will this Council on other significant issues…especially given the current fiscal conditions.

    So Geoff, I hope you will stop politicizing this particular issue. After all. Are the NPA Council members also responsible for picking the wrong finishes for some of the seawalk furniture; for the questionable design detailing of the giant granite steps; or the decision to build such a large and extravagant community centre?

    I don’t think so. If you truly want to know who to blame. Call me. But it’s not Elizabeth Ball or for that matter Heather Deal.

  • spartikus

    If you truly want to know who to blame. Call me.

    LOL…you can’t leave us hanging like that.

  • shepsil

    michael geller,

    Your comment:

    [quote]”And that’s the reality. Most councillors know very little about the intricacies of a major real estate planning and development transaction. They have to rely on city staff to know the facts, and tell them the facts. “[/quote]

    Those NPA councillors and Mayor Sullivan were the officers and Captain of the ship called Vancouver. Your suggestion that city staff had to be relied upon for their expertise is a convienient way to pass the buck. The buck stopped with the last Mayor & Council and the current Mayor and Council now have to clean up the mess they have been left with.

    Fortunately the voters of Vancouver had the good sense to get rid of the incompetents running the ship last October.

  • Shepsil, the Captain and Officers of a ship are trained for many, many years before they take on the responsibilities of their positions. City Councillors are not.

    They are not trained in the nuances of the cost differences of LEED SILVER and LEED GOLD , and the impact of requiring a minimum number of energy points. Similarly, they don’t understand the ramifications of not transferring title to a property before construction.

    Yes, councillors should use their best judgement, not unlike jurors in a trial. But they have to rely on staff.

    All councillors, including the COPE and VISION councillors voted in favour of many of the decisions that contributed to the mess we are in. I do not blame Louie, or Deal or Stevenson or Chow. They were all there too Shepsil. Don’t forget that.

  • independent mind

    Michael Geller seems to take offence at the NPA dominated council being mentioned in regards to the Olympic Village fiasco. There were relatively few votes over the three years of NPA dominance in which Vision or Cope carried the day.

    The facts are that the NPA dominated council with Sam Sullivan in the lead, did disband a council committee that was responsible for the oversight of the Olympic village development.

    Under the previous COPE council there was a fully functioning committee which was able to watch the process much more closely.

    Without that oversight we have un-elected city staff to make everyday decisions which cumulatively resulted in much of the mess we have today.

  • I think it’s a comforting illusion to believe there’s anything anyone could have done to bring this party to town on budget. Esp. when all involved know the taxpayers’ wallets are essentially a blank cheque that will pay for any screw-ups.

    The only winning strategy is not to play the game… to crib from the movie War Games.

  • shepsil

    Especially a game that Michael, you claim not to understand! If you put yourself forward as capable of being an effective councillor for the taxpayers of Vancouver and then fail, well, me thinks it is time you hung up your hat and stop the excuse making.

  • No one can understand the game because the knowledge necessary to see the big picture is compartmentalized so as to make the truth impossible to decipher (to mix a few metaphors).

    I’m not defending Mr Geller (or anyone for that matter) but suggesting an inability to find out the real cost of the 2010 Games makes one unfit to run for office doesn’t make sense. Just because I can’t see through brick walls doesn’t make me a candidate for a white cane.

  • spartikus

    Geoff Meggs has a new post about all this on his personal blog – one which he make specific claims of fact – and one which I would be very interested in others weighing in on.

  • Joseph Jones

    Don Buchanan said:

    So one person thinks amateur sport deserves to be higher on the priority ladder than the next person.

    What they call Olympic sport officially ceased to be amateur a few decades back. Here are some details.

  • not running for mayor

    Well now that the documents have been released maybe the finger pointing will end, although I have my doubts.
    People will see what they want to see and nothing more.

  • Rebecca

    I looked at Meggs website quickly and all he’s doing is finger pointing at the NPA and targetting the project office. The SEFC project is one large project with a number of small projects under it’s umbrella. Having worked in that sector before, I can understand that they had to take on more work than anticipated in 2005 so had to hire more staff. I had a tour down in that office. There are only about 10 people in-house which is incredibly small considering the size of the project but I wonder if Meggs even knows that. I’m happy that he wasn’t in the committee meeting yesterday with his dour comments and pointing finger. I’m getting quite sick and tired of him already.

  • spartikus

    I’m happy that he wasn’t in the committee meeting yesterday…

    Were you?

    Apparently, funds were transfered from the Property Endowment Fund without Council’s knowledge by the project office that some speak so highly of here.

    Do you approve?

  • Anders

    I used to be a Vision supporter. I have some experince with taking over projects. The first thing you do is ger the facts. You need to determine the true situation and then make your best evaluation about what course of action to take from that point on. It doesn’t take 6 months to determine the actual situation on any project. If it does then you are an incompent manager. We were treated to an anouncement by Vision, led by Gregor, shortly after he was placed into power, that we, the taxpayers of Vancouver were close to a billion dollars in the hole. At that point it became his problem. Not the problem of any preovious council. He should have taken the decisions needed to minimize our exposure from that point on. If he now says there are more problems, they are on his watch and it is only pointing out his own inadequacies to try and deflect this to past administrations. We were also told that KPMG was going to issue a report on the whole project at the earliest possible opportunity. We have not seen that report and it is over 6 months since Vision has been in power. If it was so important where is that report. I can only assume that we, the citizens of Vancouver have not paid KPMG anything for the work done. If it is the case that Vision cancelled the asignment then I stand corrected and count my blessings that we did not throw away any more money.

  • Rebecca

    Just to address the questions from spartikus…I listened to the meeting online. It takes a high level manager (i.e. Jody Andrews for example) to make those type of decisions of how staff salaries were paid. Maybe with his split roll as Deputy, he didn’t have time. Who knows. He’s been shooed out the door by the current regime. The staff themselves should not be knocked out because of that decision making. I would hope that they’re busy getting the job done to the best of their abilities. While I believe the Sr. Manager should have gone to Council earlier, don’t blame staff.

  • I went to Geoff Megg’s site where I found the Vancouver Sun Story by Jeff Lee on the SEFC Social Housing cost overuns. One excerpt was particularly troubling….

    “However, Anton said she favours selling the units at market prices and putting the proceeds towards building more affordable housing elsewhere.

    Her idea was roundly condemned by other councillors, including Woodsworth and Geoff Meggs, who said it would turn the village into a “gated neighborhood” where only the rich could live.”

    What utter nonsense!

    At this stage, given the pending losses on the sale of the land, and the losses and cost over-runs on the balance of the development, I believe the responsible thing is to sell these units to more modest income families with resale controls and other restrictions.

    If you are interested, you can find more on this at http://www.gellersworldtravel.blogspot.com. And yes, if you scroll down you will also find the nude San Francisco bicycle riders…So be careful!