It’s been less than 36 hours since the confirmation of Millennium Watergate. Up until Mats Sundin scored his first goal, the Big Owe was the only talk of the town. The weekend’s most lively conversation has been at the State of Vancouver blog. Michael Geller and VHB were among the all-star contributors, along with someone named LP who pins the village-pillage on an elaborate Gregor Robertson conspiracy. (In my Westender interview, I blamed Quatchi, the Olympic mascot.)
Politics or not, the city remains legally obligated to build a development that nobody wants, based on a design spec too expensive to sell, for a price of $875-million. To play down the doom and gloom, some are reminding us not to forget that, eventually, the condos will be built and the units will be sold. The end-of-the-day taxpayer loss, pending no more unforeseen disasters, will be less than $875-million. The Globe and Mail estimates a $300-million write-off. VHB, the blogger who proved Rennie wrong, predicts $500-million.
I’m not one for predictions but I’ll say that Millennium Water, if completed, will sell for more than $0 a square foot. So as long as one unit is sold we won’t lose all the money. Still, we will lose and it will hurt. The city is obligated to build and the money it will take is money we don’t have. The cash will be borrowed with interest accruing from day one.
The city’s exposure may be moderated over the long term as it pursues the developer’s assets, and I have no doubt the city will do everything to take Millennium to the cleaners. But this is all very far down the road. It’s not like Penny Ballem and Ritchie Bros. are en route to Peter Malek’s house to “kick some assets.” Even if they did, let’s not pretend they’d find $875-million hidden in an eco-friendly panic room.
The painful truth is that we need the money now and the money will have to be borrowed. Unless higher levels of government intervene, or Warren Buffett swoops in to be greedy where others are fearful, the debt falls on the shoulders of the people of Vancouver.