Olympic Village aerial view February 2010.Anna Zalewski for The Globe and Mail
Speaking in a room with sweeping views of the waterfront and green spaces that characterize Vancouver's Olympic village, Shahram Malek insisted that city taxpayers would not be on the hook for the troubled project.
"We believe that our interests and the interests of the taxpayer are totally aligned," said Mr. Malek, who, with his brother Peter Malek, runs Millennium Development Corp., the project's developer.
"The taxpayer has an investment in the success of this project. We also have an investment in terms of time, resources and money. We have every motivation in ensuring that the taxpayers get their money back, because we don't get any money back before the taxpayer is paid."
Without providing specifics, Mr. Malek said Thursday that Millennium is working with Vancouver to develop a plan for the company to meet its financial commitments to the city and selling remaining unsold units over the next 2 1/2 years.
The Maleks spoke to a string of reporters in a series of brief sessions after weeks of reports about slow sales and financial problems at the False Creek complex.
The project, the site of athletes housing for the 2010 Olympic Games, was built by Millennium on land purchased from the city. The city took over financing for the project in February, 2009, after Millennium's original lender backed out when costs went over budget.
Millennium owes the city about $560-million in construction costs and $170-million for the land the project was built on. More than 400 units remain unsold.
Sluggish sales aside, the project is completed and in a prime location with amenities such as shops and a community centre, Mr. Malek said.
"The fact is that we have something that is very valuable, a prime piece of waterfront and an asset that can not be duplicated," he said. "And the way the taxpayer gets paid back from this project is the successful sale of this project and everybody being patient and calm and working together."
The Vision Vancouver council has been under pressure to extricate itself from the financial mess by selling the 250 social-housing units the city owns at the project. But Mayor Gregor Robertson has said that would hurt, not help, the city's financial position.
After Millennium came up short on its August loan payment, the city demanded to see a payment plan and registered a security on the property.
Geoff Meggs, a city councillor, said Thursday he's still waiting to see Millennium's plan.
"It's not just a marketing plan, but it includes security so that we're confident they remain on track on their loan payments," he said.
"If the incentives involve price reductions, then the city will need to see how they propose to achieve payments in a situation where revenue from the asset may be lower on their end."
The city recently moved to start registering charges against at least two other properties owned by Millennium. That kind of move could backfire, Mr. Malek suggested.
"It is important for us to continue our operations. That, I think, is to the benefit of the taxpayer," Mr. Malek said.
"We have loans in place for our other projects, from other lenders, right now. They are ready to go. Those projects will create employment, will create work, will ensure our sustainability. And will also increase the value of the city's security."
Bob Rennie, whose Rennie Marketing Systems is selling units in the development, said details on incentives would be released within a few weeks, once the city and developer agree on how to proceed.
With a report from The Canadian Press