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Real loss at the Olympic village $230 million but no tax increase to cover that

April 12th, 2011 · 58 Comments

The story today in Gary Mason’s column, which I explore more in my story, is the real number for the losses at the Olympic village, why the assets from Millennium Development’s large real-estate empire didn’t cover that, and what the consequences are for us taxpayers.

I have to add here that I feel personally misled by what happened at the news conference on Friday, where the city aka city manager Penny Ballem explained the “$40-50 million write-down” the city would have to take on the village, which everyone understood to be the loss on the total amount of money owing on the village — both the $580 construction loan and the $180-million unpaid amount owing on the land.

I specifically asked, in fact, whether we could interpret the numbers to mean that, actually, the construction loan would end up getting paid off in full and that loss would only mean that the city wouldn’t get back the full amount it thought it was getting for the land. As you know, that’s what I wrote in my blog post.

That was the moment for someone, anyone, to say, “No, you’ve got it wrong. We’re actually unlikely to get anything for the land and the write-down is on the construction loan.”

But the answer I got was something like, “Well, that’s not the way we word it.” I responded along the lines of, “Well, that’s the way we in the media will write it” with the clear implication being, “If this is absolutely wrong, now is the time to say so.” That didn’t happen, so we all went on to explain to the public that the $50-million loss was on the total debt.

I can’t understand what the thinking was behind explaining things this way. Yes, I realize some among you will say, it’s perfectly understandable, that Vision Vancouver, Penny Ballem et all are just evil liars with a clear plan to dupe the media.

But how could they think this number wouldn’t be questioned, analyzed, poked and prodded to death and that it would become clear in very short order that, in fact, the land debt was not included in the total loss?

A huge mistake. Now it’s hard to have faith in the calculations that went into coming up with the $50 million loss number. We already don’t have a clue what kinds of assumptions are built into the calculations, so we were having to take it on trust that various items like accumulating interest, time to sell all the condos, the rental stream, and more were built it. On trust. Hmm, thinking about that one.


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