Vancouver Nears Financing Deal To Finish Athletes Village
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Vancouver Will Borrow C$800M From Banks
To Help Fund Construction Of Athletes Village |
The city of Vancouver is "close to concluding new financing arrangements for the Olympic athletes village" for the '10 Games that could help save Millennium Development Corp. (MDC), which is working on the project, "millions in interest payments," according to Gary Mason of the GLOBE & MAIL. The city has "reached an understanding with a consortium of Canadian banks" to borrow more than of $800M (all figures Canadian) at an interest rate of less than 3%. The arrangement will allow the city to "complete the project and pay off" N.Y.-based Fortress Investment Group (FIG), which had been financing the project until it stopped advancing money to MDC last September "allegedly over concerns it had about cost overruns." FIG had advanced $317M of its $750M loan with MDC before stopping payments. Sources said that as part of the agreement, the city of Vancouver will pay FIG a $4M penalty to "take over financing of the project." Mason notes the figure is much less than the $25-50M "speculated to be the fee the city would have to pay to break the terms of the loan." The fact Fortress would "settle for so little is interesting, and certainly supports the premise it was anxious to get its $317[M] loan back and say goodbye to Vancouver." Mason notes with new financing in place, the city's "attention next turns" to MDC. Vancouver will "have to decide what interest rate it will charge Millennium for the money it is lending to complete the project, as well as the amortization period." MDC needs about $458M (GLOBE & MAIL, 2/12).
WILL IT BE READY? In Vancouver, Derrick Penner noted MDC believes the athletes village, which is set for completion in November, is "on schedule, about where any project would be two years into the development-permit phase." VANOC is "not responsible for building the remaining non-competition venues," which also include the "convention centre expansion that is to serve as the Games' main broadcast centre and various other practice and celebration sites." VANOC Exec VP/Construction Dan Doyle said that there have been "'1,000 problems' in the process of building the venues, but solutions have been found for every one of them" (VANCOUVER SUN, 2/11). IOC President Jacques Rogge said the organization is "very confident the village will be ready in time." Rogge indicated that the village "must be viewed as an investment." He also noted that the venues are "nearly complete and test events are winning plaudits." Rogge: "I've been extremely pleased by the progress of the organization" (AROUNDTHERINGS.com, 2/11).
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