VANCOUVER, British Columbia — Politicians in British Columbia returned to the legislature for an emergency session Saturday to debate whether to allow Vancouver to borrow more than $450 million to complete the 2010 Winter Olympics athletes’ village.
The provincial government introduced a bill that would allow the city to borrow the money after the original financing fell through. It was not clear how long the legislation would be debated before a vote.
The original $615 million loan was financed by New York-based Fortress Investment Inc., Millennium Development and the city, which was supposed to cover the cost of building the 1,100 units of housing.
Fortress stopped payments on the loan in September because, the city said, cost overruns and a crashing real estate market meant Millennium might not be able to pay them back.
The city stepped in with $84.3 million interim financing to keep construction going. However, that funding runs out next month.
“There is an urgent need to restore the flow of cash to the project,” Vancouver Mayor Gregor Robertson said in a letter to provincial Premier Gordon Campbell.
City councilors could not comment on reports the city was looking for $642 million to take over the financing of the village.
“If it ends up that we take it over, that’s not such a bad thing,” city councilor Ellen Woodsworth said. “We have to negotiate the best agreement we can get.”
However, a city document in October indicated that purchasing the loan would place the city at “considerable and other financial risk” since the cost of breaking the current contracts could not be estimated.
The report was co-authored by Jody Andrews, the top city manager in charge of the troubled Olympic Village project, who resigned this week. He was the third senior city staffer to quit in connection with the problem.
Fortress has been on shaky financial ground with the ongoing global credit crunch. In December, it elected not to pay a quarter dividend, electing instead to retain capital for potential future investment and working capital purposes.
And, it was not the first time the 2010 Games have been at the mercy of Fortress. In late October, Fortess-owned Intrawest ULC, the company that will run the ski hills for the games, completed a $1.7 billion refinancing deal, ending weeks of speculation about the company’s financial well-being.
Fortress bought Intrawest two years ago in a multibillion-dollar deal financed by a group of lenders that included Lehman Brothers, which filed for bankruptcy protection.
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