Since I posted my story and the city material about the KPMG audit, I have had a few emails and phone conversations with people in the development business who wondered about some of the conclusions drawn.
One was the strange assessment about the weighting of the price in the evaluations among the three bidders. As described by KPMG, the city team originally developed a matrix with 57 factors to assess the three different bids (Millennium, Wall and Concord) and then later added in price, giving it a weight of as much as 14.5 per cent of the total. That change supposedly allowed Millennium to jump ahead of the others and become the winning bidder.
But people in the development industry say that price is always a factor in bids and that it’s not at all unusual to have a weight factor of 25 per cent, which is considerably more than the case here.
Another point raised is the report’s oblique conclusion that Millennium didn’t have the financing capacity for that big a project and that the city would have done better with one of the other two bidders, which had longer tracker records and more financing depth. But, again, I’ve heard from people in the development world that the city’s Olympics project was considered to be unfinanceable as the terms stood — the time frame was insanely short to try to put together a financing package, which in Canada typically involves a syndicate of banks, and the city’s insistence that it retain title to the land was a major deal-breaker for many potential financiers of the project.
If that last is true, it makes it look not so much that the city was wrong to pick Millennium but that Millennium made a mistake by not being more aggressive with the city in changing the terms of the deal. Just a thought, but I’m wondering what you wizards out there think of that information.