(The following article is from the January 1-31, 2009, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $25/year, or $12 low income rate; for U.S. readers - $25 US per year; other overseas readers - $25 US or $35 CDN per year. Send to: People's Voice, c/o PV Business Manager, 133 Herkimer St., Unit 502, Hamilton, ON, L8P 2H3.)

PV Vancouver Bureau

Controversial from the beginning, the Vancouver 2010 Winter Olympics continues to dominate civic politics as 2009 begins. The latest news about financing of the Millennium Olympic Athletes village confirms the fears of many that the Games bid will prove far more expensive than its backers ever admitted.

     Last November's Vancouver civic election went off the rails for the big business Non Partisan Alliance when the media revealed that City Council had secretly voted another $100 million in loans to complete the project. The story was the last straw for voters tired of the NPA's dismal record, and only one of the party's candidates made it onto the new Council.

     Just weeks later, full details of the Millennium project are coming to light. Differences remain about the future of the project, but essentially it appears that under the NPA's 2005-2008 majority, the city became the real developer behind the building of nearly 1000 housing units, 750 of which are to be sold as high-end condos after the Games.

     The original plan, part of an overall bid package narrowly backed by Vancouver voters in a 2003 referendum, was to build an athletes' village which would be turned into a mix of one-third low-income, one-third affordable, and one-third market housing. Much of the affordable and low-income housing component was ditched by the NPA, which focused instead on making a killing by turning the project into luxury condos.

     That plan hit the skids last year when the North American housing market slumped badly. House and condo sales have fallen sharply in Vancouver, and most of the project's units remain unsold. Facing dire financial problems, the project's main U.S. financier, Wall Street's Fortress Investment Group, is asking the City to guarantee most of the $750-million loan it has offered to build the $1.2-billion Olympic Village. Media reports indicate that the city might have to offer $500 million as security, five times as much as the $100 million it has already put up to keep construction going.

     As Vancouver Sun columnist Miro Cernetig recently wrote, "with its own share price in a slump, the global banking crisis still unwinding and a falling real estate market in Vancouver, Fortress essentially wants a guarantee from the City of Vancouver and its taxpayers that it will be paid. It wants the city to make good on the project's loan and interest costs if the Olympic Village fails as a real estate venture. In short, the profitability of the Olympic Village, whose condos were supposed to be sold to the public at great profit after being used by Olympic athletes, is no longer viewed as such a sure thing. In fact, those close to the deal - now watching condo prices drop dramatically - wonder if the deal will ever make a profit."

     One of the few politicians looking good in this situation is David Cadman, the sole Coalition of Progressive Electors councillor during the last term. Finally free to reveal his record, Cadman voted against the April 2007 deal which committed the city to the completion of the private development. He did vote for the October 2008 decision to advance up to $100 million to ensure that construction continued, since the city was legally obliged to finish the project or else face severe penalties.

     Some NPA spokespersons claim that the issue is "overblown", and that the project will make money in the end. But that prediction seems based on nothing more than hopes that the economic recession will end quickly, followed by a major rebound in condo prices.

     Meanwhile, COPE councillors Cadman and Ellen Woodsworth remain committed to the 225 units of affordable housing in the development.

     "What we are absolutely clear on is that those units must remain no matter what," says Woodsworth. "Maintaining and creating affordable housing must be a priority for this council."

     In another explosive Olympics cost over-run, the B.C. government is facing a security budget that has escalated by hundreds of millions of dollars. Provincial Finance Minister Colin Hansen is negotiating with Ottawa about the split in security costs, but so far, the federal government refuses to consider paying a higher share. The original $175 million security budget is now pegged at anywhere from $400 million to upwards of $1 billion. If other Olympic-related projects are any measure, taxpayers can count on the latter figure as closer to the final number.