VANCOUVER OLYMPIC VILLAGE GOES INTO RECEIVERSHIP

We talked about the Vancouver, BC Olympic Village troubles on the old Bank of Kev platform. Now the condo development has gone into receivership and it appears it will cost the taxpayers a bundle.
                             

UBC real estate professor Tsur Somerville said Thursday the value of the land tends to be forgotten in relation to the city’s outstanding $740-million loan to developer Millenium.

“People forget about the land piece, but that was where the city was going to get its money,” said Somerville.

“If you don’t get $160 million for the land, that’s losing money.
“It’s the most likely outcome.”

The $160 million is what’s left over from Millenium’s $193-million purchase price, less the company’s down payment.
Millenium Water, a cluster of 1,108 environmentally friendly condos on False Creek, was placed into receivership Wednesday.
It means Vancouver must recoup as much as it can from sale of the luxury units, some 450 of which are still for sale.

Somerville said Vancouver and receiver Ernst and Young have some tough choices to make, likely involving three scenarios:

1. Cut prices and try to sell as quickly as possible. The condos are being offered for $600,000 and up.

“A receiver usually wants to get the money out because the market is uncertain for a ‘new’ condo which is three years old . . . In this case, Vancouver ends up with zero.”

2. Hold out with high prices for as long at it takes.

“It’s hard to find people willing to pay any price for sustainability.”

3. Try something in between.

“There are political and financial costs to each choice.”

Whatever happens, Somerville sees a tough road ahead for city bean counters.

Garth Turner talks about a housing bubble in Canada and this one more example of what he is talking about.

UPDATE: I did some editing to clarify the post.