Rejecting a marketing plan that would have dramatically reduced condominium prices, the City of Vancouver has forced the developer of the 737-unit Olympic Village into receivership just as new condo sales have plunged 90 per cent.
Developer Millennium Developments owes the City, the lender of the controversial project, an estimated $700 million, including $170 million for the prime waterfront on False Creek. Only 280 of the condominiums, many priced at more than $1 million, have sold.
On Nov. 10, the City negotiated an agreement with accounting firm Ernst and Young to assume control of the Millennium Southeast False Creek Properties and the Millennium Water development, as the Olympic Village condominium project is now called.
It is a bad time to be pushing high-end new condominiums onto the Vancouver market. During the first two weeks in November, only 29 new condos sold across the Metro region, according to the Greater Vancouver Real Estate Board, compared to 188 in the same time last year.
Former Millennium sales agent Bob Rennie told a real estate conference in Vancouver a week earlier that he had a new marketing plan that called for price reductions and other incentives to sell the remaining 400 units, a job he estimated would take up to three years. The discount would have left an estimated $200 million gap between what is owed to the City and what could be made through sales. The City rejected the proposal.
The receivership will also expose any other liens against the property.
Meanwhile, the first low-income residents will begin moving into the social housing units at the Olympic Village this month. There are 258 units of rental housing at the Village, about half of which are set aside as the most expensive social housing in Canada.
