From The Province Newspaper:
VANCOUVER — In early 2009, Mayor Gregor Robertson warned Vancouver taxpayers that they were on the hook for “all of” the $1.1-billion Olympic Village project. After five years that dire statement is coming much closer to reality.
The Province’s analysis shows that with marketing costs still mounting, and about 130 hard-to-sell village homes left, when the last unit is sold final taxpayer losses of over $300 million seem realistic.
In 2010 a receiver, Ernst & Young, was tasked by the city to regain as much as possible of the $750 million owed to taxpayers, after developer Millennium defaulted.
The $750-million loan didn’t include $171 million that the city was owed by Millennium for waterfront land that the village was built on. The city’s latest financial statements say that after writing off a $50-million loan loss, about $300 million remains to be paid.
The problem is, real-estate experts say the remaining village homes generally have the worst layouts and views. According to The Province’s rough estimates, potential sales revenue might only come to about $100 million, after expenses. That means taxpayers seem likely to owe over $200 million and lose the value of the land.
The city reviewed The Province’s analysis for this story and offered a response: “The financing for the village is a work in progress,” the city stated. “The city cannot predict the outcome of the village financing at this time.”
In an interview, University of B.C. real-estate expert Tsur Somerville said: “I don’t think there is anything the city can do to mitigate the losses they will experience.
“The best case was that the city got the loan paid off and got nothing for the land, and it doesn’t even seem to be looking at that anymore,” Somerville said. “The less-desirable units take longer to sell, but now they are trying to sell those units with a whole bunch of competing units coming on the market in that area.”
But the village has bounced back since being labelled a “ghost town” in 2010. The latest reports show about 90-per-cent occupancy, plus thriving shops. But successful marketing and promotion efforts have come at a significant cost, and the bill continues to mount.
The latest court-ordered marketing update from Ernst & Young shows that as of June, 339 units have been sold by the receiver, for proceeds of $331 million. The receiver gave the city $250 million. The rest of the money was gobbled up by real-estate-agent and marketing costs, strata fees, mounting legal fees, unexpected repair and maintenance bills and the receiver’s management fees of over $5 million.
“The involvement by the receiver has exceeded its original estimates,” Ernst & Young’s June report reiterates, also noting that sales of a final 135 units will slow down “due to the remaining mix of inventory.”
So the question is, when should city hall cut off the small army of real-estate agents, lawyers and accountants that have nursed the village back to life?
Vision Vancouver Coun. Geoff Meggs, council’s expert on village finances, said he couldn’t comment. Meggs directed questions to the receiver, Craig Munro.
“There are still too many variables to attempt an estimate of total final revenue,” Munro responded to The Province’s questions.
NPA parks board commissioner John Coupar, meanwhile, said buying a condo in the village two years ago looks like a successful investment.
“When we first moved down here it was pretty quiet and it was a bit of a leap of faith that it would work out,” Coupar said.
“I’m not that familiar with the financial ins and outs, but from a residents’ point of view I think the place will come alive, and over time it will be seen as a real positive thing for the city.”
Sheri Brown Associates took a new listing over the weekend! 3 Bedrooms and a Den, with over 2100 sq Feet! Double car side x side garage, playground right there for the kids to play, gated complex all on a quiet street. You can't go wrong with four, yes that's right four sundecks! GOTO Sheri Brown & Associates for all the details!
From the FVREB Press Release!!
Buyers and sellers in the Fraser Valley took advantage of the record breaking hours of sunshine in July as both sales and listings on the Fraser Valley Real Estate Board’s Multiple Listing Service® (MLS®) experienced a noticeable lift.
We had an increase of 5 per cent compared to the 1,393 sales in July of last year and 10 per cent more than were processed in June. By historical comparison, sales in July ranked sixth going back to 2004. For over a year, monthly sales in Fraser Valley have been trending at 10-year lows.
“We’re likely experiencing some pent-up demand coming off some very slow winter months, tiny changes in mortgage rates are always incentive for many buyers, and let’s not underestimate our glorious weather. For our buyers and sellers, a return to a normal, balanced market is welcome news.”
The Board received 2,777 new listings in July – 5 per cent fewer than received during the same month last year, but 6 per cent more than were received in June – leaving the volume of active properties at 10,428 a decrease of 4 per cent compared to July 2012.
In July, the benchmark price of single family detached homes in the Fraser Valley was $551,000, virtually on par with $551,400 during the same month last year. For townhouses, the benchmark price was $297,800, a decrease of 1.8 per cent compared to $303,400 in July 2012 and the benchmark price of apartments was $202,000, 2 per cent less than in July 2012 when it was $206,200.
If you are considering a move now would be a great time to explore the new listing out there!