20 responses so far ↓

• 1 larry // Sep 30, 2010 at 9:01 pm

  There are no purely good guys nor bad guys here. Everyone was greedy from the beginning: certain City staff who rejected solid bids that weren’t the highest in favor of Millennium’s wildly over-priced offer; the Vision Council of that day, Millenium thmselves, and on. We might have got away with it, had it not been for the other much bigger economic disaster also caused by greed. The saddest thing is that we aren’t likely to change or learn from this. And those who will pay most dearly are those who are least culpable and least able to pay.

• 2 spartikus // Sep 30, 2010 at 10:41 pm

  “It’s a phenomenal amount of money,” said Michael Geller, a former president of the Urban Development Institute and the current developer of Simon Fraser University’s housing projects.

  “These are such big numbers, I have to check them twice. Not only is that probably the highest price per square foot for a development in Vancouver, it is probably the highest price for a development site in Canada. I cannot imagine anybody paying that in Toronto.”

  Officially, Millennium would get the right to build a million square feet of market housing on the 2.6 hectares of land it bid on. But as projects never go to the full square footage allowed, Geller and other developers calculate that Millennium is effectively paying about $225 a square foot. Downtown land is currently being sold at around $130 a square foot.

  With construction costs added, developers say units will have to be sold for a minimum of $500 to $600 a square foot to break even, making the price of a 600-square-foot apartment $300,000 to $360,000. The entire project will likely cost in the $500-million range to build.

  -France Bula/Jeff Lee, VSun, April 5 2006

  The winning bid to develop the southeast False Creek lands — which will house the Olympic village — was $23 million above the next closest bid, which at $170 million was substantial enough. This makes what is at present a hodgepodge of outdated industrial land into the most expensive piece of residential real estate in the country, and it makes the Millennium Group, which submitted the winning bid, either (a) foolhardy or (b) prescient. Time will tell.

  -Pete McMartin, VSun, April 6, 2006

  There are other articles I turned up too – Don Cayo in 2005 blasting the Larry Campbell council’s choices rejecting high-rises in favour of low/mid-rises, social housing and environmental standards.

• 3 landlord // Sep 30, 2010 at 10:57 pm

  So the City winds up owing $700 Million on land it already owned, and owning a portfolio of housing that’s too expensive to ever make enough money to repay the debt. And you thought the HST was an unpopular tax. Wait until you see your 2011 property tax notice.
  Good old NDP economics, socialism through the back door.

• 4 Tiktaalik // Oct 1, 2010 at 12:21 am

  Man this is getting pretty crazy.

• 5 Dave // Oct 1, 2010 at 9:58 am

  One of the challenges of high performance building generally, is the need to overcome the hurdle of initial costs and find a way to include the reduced environmental impact, and longer term savings in the financial analysis.
  Millenium’s sales challenges are not the result of it’s high performance features, but now faces similiar financial obstacles, which also require innovative solutions.
  It is time to consider alternative sales strategies such as Co-Op housing to reimburse Vancouver taxpayers and to provide housing that local people can actually afford. The long term energy efficiency savings of the Millenium development must be used to facilitate the long term financing of such strategies.

• 6 MB // Oct 1, 2010 at 10:44 am

  @ landlord: “Good old NDP economics, socialism through the back door.”
  =======================

  Seems to me the primary big decisions commiting Vancouver to great financial risk were made when Sam was mayor. Not to let Larry and Gregor off the hook for their following eff ups, but your kick at the red can with a blue patent leather shoe with frilly tassles is predictably spasmatic.

  The ducks started aligning in July 2003 when Vancouver won the Olympic bid. Several mayors and councils of varying colours were in power over the years the Olympics were first thought of. The latter councils flagellated in the build up to hurricane force Olympic winds.

  Senior governments who heavily promoted the Olympics may well have to come to Vancouver’s rescue. Larry had a referendum on the Olympics and won. Therein the city accepted its share of the responsibility. But that never included the unforseen.

• 7 Roger Kemble // Oct 1, 2010 at 10:53 am

  @ Dave . . . “challenges of high performance building . . . hurdle of initial costs. . . reduced environmental impact. . . financial analysis . . . sales challenges . . . high performance features. . . . similiar financial obstacles. . . innovative solutions . . . alternative sales strategies . . . long term energy efficiency savings . . . . facilitate the long term financing . . . . strategies.”

  Where did you dig up this jargon Dave?

  We got problems alright . . .

  http://www.youtube.com/watch?v=D22TlYA8F2E&feature=player_embedded#!

  . . . and they have nothing to do with jargon . . .

• 8 Morven // Oct 1, 2010 at 11:43 am

  We shall soon find out which side in this imbroglio has the best lawyers. I suspect it will all be wrapped in law suits for the next decade.
  -30-

• 9 Bill McCreery // Oct 1, 2010 at 12:50 pm

  @ Dave 5. “….. consider alternative sales strategies such as Co-Op housing to reimburse Vancouver taxpayers and to provide housing that local people can actually afford.”

  Co-op housing is not going to ‘reimburse’ taxpayers or, in this case, ‘provide affordable housing’. The land cost was to high + construction cost over-runs + ‘green goodies’ + interest because of delays, etc.

  The only realistic, viable, responsible way out of this mess is for the City to delete all the non-affordable rental housing & sell the whole project as condos. Then, after the shooting stops & the dust settles &, if there is any money lefty over, build real affordable housing elsewhere. In other words follow Michael Geller’s advice. A plan can be developed which would probably have to phase sales & provide interim rentals.

  I would hope Bob Rennie & other experienced realtors are saying the same thing to the City.

• 10 Roger Kemble // Oct 1, 2010 at 1:19 pm

  @ Bill 9 . . .

  “ if there is any money lefty over, build real affordable housing elsewhere.”

  A very big IF Bill . . .

  OV social is available NOW a very big plus . . .

  If the city waits ’til later it may never happen!

• 11 Roger Kemble // Oct 1, 2010 at 1:21 pm

  PS . . . this has nothing to do with Bob Rennie or realtors . . .

  This has to do, very substantially, with what Vancouver is . . .

• 12 Roger Kemble // Oct 1, 2010 at 1:39 pm

  PPS Michael is dead wrong . . .

  The city made a promise . . .

  Real people, real cities do not break promises . . .

  Least of all to their most vulnerable . . .

• 13 Tiktaalik // Oct 1, 2010 at 1:58 pm

  Wasn’t the argument a while ago that the houses built for social housing were unsellable as regular condos as they were distinctly built as low income housing and thus had next to nothing in terms of frills and what condo buyers expect?

  For example instead of polished concrete or hardwood they have carpet and linoleum.

• 14 Michael Geller // Oct 1, 2010 at 3:17 pm

  Tiktaalik, some did argue this, but I do not agree. Yes, the units are basic in comparison with the market units, but they are much nicer than a very significant percentage of housing in Vancouver. When the city considered the revenues from any sale of the social housing and rental units, it included an allowance for some upgrading, especially in the kitchens.

  In my view, the ‘modest’ finishes are one of the project’s attractions. They would necessitate a sale at a much lower price than the more deluxe condominiums; this is why they would be more ‘affordable’ and help broaden the social mix.

  However, I maintain that they could be sold for at least their cost,( including a land component) to those wanting to live in a very attractive, high amenity community, without granite countertops and fancy lighting. Depending on the final costs, there could well be a profit. As I noted on another posting, the city staff estimated in April that that the sales could generate up to $60million in profit. Given the change in market conditions, that may be unattainable, but some profit should be attainable at prices in the order of $600 a square foot, which is where I think the market might be for such a unit.

  CORRECTION: In another post I expressed concern about renting out these and other units noting that the city still had vacancies in its 1 Kingsway Project. I am now advised that all but one unit in this project are now leased. The last unit is being held back in order to accommodate a small childcare centre. I’m pleased this building is leased up. I also understand the Millennium rental units are about 60% leased. Hopefully the remaining units will be leased shortly, since they represent good value and an opportunity to live in the community.

• 15 Roger Kemble // Oct 1, 2010 at 6:21 pm

  “Mayor Robertson announces Millenium Water social housing will b ein operation before Christmas”

  Vancouver Sun today . . .

  Long Live the Mayor . . .

• 16 Joseph Jones // Oct 1, 2010 at 10:07 pm

  MB #6: “Larry had a referendum on the Olympics and won.”

  Not referendum – plebiscite!

  (A vote whose outcome was predefined to determine nothing.)

• 17 Tessa // Oct 2, 2010 at 12:46 am

  Thanks to Spartikus for the quotes. What it goes to show is that this plan Millenium put forward in 2006, and which was accepted by the NPA council of the day, was a completely ludicrous example of greed and prestige getting the better of both the city and the developors. The housing should never have been planned as luxury, $1 million and higher condos in the first place. It went completely against the ideals set forward by the previous Vision/Cope council, it went completely against the character of the neighbouring communities and, along with the promise to finish the venue by february 2010, has landed the city with a massive financial black hole.

  The lesson here should be obvious. We need to start building for Vancouver residents – building housing that is affordable for a large spectrum of incomes, that is affordable and the right size for young families, and isn’t just condominiums. We need rental and we especially need non-market housing that doesn’t fit into the regular subsidized housing type.

  There are a lot of creative solutions that have been raised by the tyee among other publications that we simply aren’t doing here.

• 18 Dave // Oct 2, 2010 at 2:02 pm

  OK Roger Kemble – I’ll try again… Millenium includes new, more efficient features which will cost less to operate. For example the heat recovery from sewer pipes. Google “Energy Performance Contract” to understand the financial implications.
  Traditional free market development model is build and sell to highest bidder. Eventually, the free market model may yet work to provide affordable housing – but Vancouver taxpayers (and the developer) will pay dearly for this.
  Alternate “innovative” solution would be some sort of financing arrangements to allow Co-op (corporations?) to buy the buildings and sell lower cost shares-in-the-coop (instead of selling actual suite ownerships). Perhaps individuals could then buy $300,000 Coop Shares plus the obligation for small additional monthly payments until the full debt is settled.

• 19 Bill // Oct 2, 2010 at 3:56 pm

  @Dave,

  Help me out here – what price would the corporation pay for the buildings – cost or current market value? And if they pay more than what they sell the shares for, where is the shortfall in funding to come from? Besides, anyone who can put down $300,000 for Coop shares and afford a monthly payment on top of that does not need subsidized housing.

  There is no magic bullet here – the project is a financial disaster and all that remains is to see who takes the biggest share of the hair cut – the developer or the Vancouver taxpayer.

• 20 Dave // Oct 2, 2010 at 10:38 pm

  Bill – the CoOp / Corp would negotiate with the City and arrive at a price between cost and market value. Perhaps full cost but repaid over a much longer period of time? Perhaps reduced cost if the City’s financial analysis sees greater benefit in a complete sell out quickly?
  Can the City be a different kind of developer?, one who might include the value of social benefit and political support? Therefore the co-op / corp might, with assistance of City, obtain financing for purchase of entire building with City support in exchange for providing a gradient of coop share prices for different suites. This would facilitate purchases by working Vancouver taxpayer/voters currently priced out of Millenium, as well as low income people through providing some subsidized coop shares for social housing as well. Largest /best view suites have highest share price and highest monthly payments but all Co-op share owners would pay less than they would have paid for purchased suite. In exchange for giving up the right to resell their suite – working and low-income residents would pay lower purchase price. Residents’ investment in the co-op would be the value of their coop shares.